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Digital transformation people and technology focused

A Two-Sided Coin

Imagine the mint is issuing a brand-new coin for 2021 in celebration of the recent national achievements of corporate America. Holding the sparkling gold coin in the palm of your hand, you see an image of an elaborate, interconnected digital ecosystem with the words Incrementum Technology Agitet (which Google tells me means “technology drives growth” – please don’t hate my lack of Latin prowess).

You toss the coin high in the air and it catches the light and flickers as it rotates before landing back safely in the palm of your hand. You peer down, this time at the other side of the coin. This side isn’t quite as sparkling and is a little harder to make out. You bring it closer to your eyes, curse the fact that you haven’t had an eye test in a long time, rub the grime with your thumb, and eventually bring the image in front of you into focus. This time you see two heads – one male, bespectacled and wearing a tie. The other female – hair tied back, wearing a neat button-down blouse, and holding a steaming cup of coffee. Neither look particularly happy. Underneath you read the words Huc Homines Operarari: “Humans work here.”

2020 Achievements Have Surfaced Significant Gaps

Most leaders intellectually understand that digital transformation needs to take both people and technology into consideration. But many are really seduced by the promises of the shiny side of the coin – the technology that they hope will make the organization leaner, meaner, smarter, faster, more productive, most customer-centric…

And 2020 was the year we made impossible things happen. According to a recent McKinsey global survey of executives, “digitization of customer, supply chain and internal operations accelerated by three to four years.” In an April 2020 earnings call, Microsoft’s CEO Satya Nadella said, “We’ve seen two years’ worth of digital transformation in two months.” Things that were previously thought of as impossible to implement were achieved in a matter of weeks. So organizations got really good at implementing digital change really fast.

The problem is that many organizations are struggling to bring their people along with them on that journey, and that’s becoming a real challenge for many organizations in 2021.

Accelerating digital change requires rigor and new skills, but more importantly it requires a specific mindset and buy-in from employees at all levels – and that’s not so easy.

When we boil it all down, digital transformation is as much about people, culture, and behaviors as it is about technology.

A Workforce Unable to Absorb More Change

In a recent Conference Board webinar called The Future of Work: It’s all About Mindsets, I polled more than 600 senior-level participants on how many major change initiatives were underway at their own organizations. 54% said, “Honestly I’ve lost count! More than 10.” A whopping 83% suggested they are experiencing at least five significant organizational change initiatives concurrently. Employees are drowning in the sheer volume and pace of new change initiatives, and that’s a real issue.

Consider this: According to Gartner, the amount of change that an average employee can absorb without becoming fatigued is half of what it was last year. That means employees’ ability to absorb the vast amount of digital change has plummeted precisely at the time when organizations are trying to drive more change.

And this was eye-opening: According to a separate study by Gartner, the six main barriers to digital transformation are all people-related. Not a circuit board in sight! This quote particularly jumped out to me: “Digital transformation is only possible if it arises from the basis that all members who undertake the process adopt its practices consciously and voluntarily.”

“Voluntarily” is the important word there. Telling people to change won’t navigate change resistance. People need to be able to come to their own conclusions and decide they want to be part of the journey, and that represents a significant challenge for many organizations.

A Human-Centered Approach for 2021

2021 is the year that the human side of the digital transformation coin is coming sharply into focus as leaders try to maximize and accelerate their return on investment. Here are four things business leaders should consider as they apply a human-centered approach to digital transformation:

  1. Engage employees in the possibilities but ground them in the realities.

Leaders need to stop selling new technology as the best thing since sliced bread. Many set unrealistic expectations about how wonderful things will be and often leave out the parts which might not be so appealing to constituents.

It is still important to paint a picture of a compelling future state, but it needs to be grounded in reality. If you manage expectations, you’re far more likely to have employees who are willing to accept the bumps on the digital change journey because they always knew they would happen.

  1. Immerse employees in the ecosystem first.

Digital, organizational, and process changes can often feel like a tangled web of priorities to colleagues on the front line. Employees are bombarded with “important” messages and requests from different project teams and functions working on different priorities with conflicting timelines. Without the contextual systems view of how things connect and drive toward a greater shared goal, it’s extremely hard to buy in to what might feel like another flavor of the month.

Give employees the systems view of your digital transformation initiatives and how they connect to your overarching transformation vision. Visualize it – make the connections tangible. With a clear and consistent understanding of the systems view, you’re far more likely to generate buy-in at scale for individual initiatives.

  1. Mindset needs to be addressed before skill set.

The digital skills shortage is widely reported, and many organizations have an increasing need for digital skills but lack a qualified talent pool to fill those roles. A joint report by Accenture and Amazon found that a lack of upskilling will cost the US $975 billion between 2018 and 2028. So it makes sense that many organizations are focusing heavily on reskilling their current employee base to close the gap.

That’s valid and important, but with tenured employees – if you don’t shape mindsets first – it is extremely difficult, and perhaps impossible, for people to absorb and apply new skills effectively and at the necessary pace of change.

  1. Manage the ripples of change.

I think most people would assume that the impact of large-scale change or “big bang” strategies can negatively affect mindsets. For example, many would expect large-scale organizational transformation to be the primary cause of change fatigue.

But organizations give less acknowledgement to the ripples of change that a big-bang rollout might cause – things like process changes, merging into a new team, or having to adopt a new process. Day-to-day changes can be just as damaging as the big bang of a large transformation.

We need to rethink our approach and shift the weight of change engagement activities until after digital initiatives launch. That means putting structures in place to support employees when they need it most – when they are being asked to implement that change.

If you’re curious to learn more tips on how to accelerate digital transformation, let’s chat.

May 5, 2021


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