Start Small: Two common barriers to digital transformation and what to do about them
Published 11 April, 2019
We’ve read plenty of 2019 prediction articles saying digital transformation should be phased out as a term – that it’s no longer relevant to the conversation. That may feel true for the fast-movers and early adopters, but here at GXG we’re not ready to banish “digital” from our vocabulary just yet.
Among our clients and experts, “digital” oftentimes stands in for the concept of any major strategic initiative. It’s broad, ambiguous, and surrounded by uncertainty and risk, especially for large, legacy businesses. That uncertainty is why executives frequently feel stuck when it comes to changes in technology, business model, organizational structure, and culture.
The advice we most often hear repeated by board members and connections regarding digital transformation is to start with small, specific pilot projects to get quick wins – these quick wins are uncertainty killers. They can then be replicated throughout the organization to generate buy-in and scale up transformation quickly. It’s definitely not advice unique to our work, but we find companies still don’t do this instinctively. Below is our perspective on two of the most common barriers to change and actions to take to enable any new initiative.
Barrier 1: "Culture eats strategy for breakfast" — Peter Drucker
The biggest barrier to starting pilot projects is culture. Company culture can manifest in surprising ways when it comes to trying something completely new and different in an organization. For example, many companies in highly regulated or manufacturing-based industries have cultures that emphasize safety. And for good reason, safety-focused cultures have allowed them to grow and enjoy a high level of trust from their customers and employees. But safety culture can seep into senior management decisions so that the safest way to do business becomes doing it the way it has always been done. All of the risks are known and mitigated.
Similarly, traditional organizational structures can create a handoff of decision-making to only the senior-most leaders. When career longevity depends on years of service with no mistakes, very few people are left who can or are willing to take risks or make bets, even small ones. Lower level employees, who have the most relevant experience and knowledge to make incremental changes to processes, are frozen out of decision-making. That lack of continuous, iterative change can build up into a huge wall by the time a transformation strategy is announced.
Action: Lower the Guardrails
The quickest way to allow little innovation “speedboats” to break off from the slow pace of the mothership is to create clear, but substantially lower guardrails around acceptable risk. Acknowledge where the existing culture is helpful, even vital, to the core business but define domains where it doesn’t have to be controlling. In the example of the safety-conscious manufacturer above, a culture of safety and protectiveness around their products and consumers had extended to their organizational data. Cloud was off limits because no one person could make any decision about company data. This company had to lower the guardrails – creating a red, yellow, green system with one small bucket of data that required no approval to be placed in the cloud. Armed with a clear definition, any employee was empowered to find ways to leverage cloud technology within an acceptable range of risk; a small, meaningful step toward piloting data unification and analytics projects.
Key takeaway: Empower employees at all levels to make decisions within the guardrails that are informed, but not defined, by company culture.
Barrier 2: Paralysis by Analysis
The second common barrier to kick-starting pilot projects is the overextension of the ideating stage. Talking about the big picture is fun. It’s a break from the typical day-to-day, usually represents a substantial investment by the company, and makes people feel creative and important. Sometimes, however, these brainstorming sessions wind up at a place where the next big initiative is “everyone’s responsibility.” While that may seem motivating, “everyone’s responsibility” often translates to “no one’s responsibility” since it’s unclear who is in charge of executing the next steps. Alternatively, a consulting engagement wraps with a list of 100 potential opportunities for new technology implementation. Which leads to 100+ new questions: Where should we start? Which team? What return should we expect? And how do we begin?
Action: Prioritize and create accountability
Inertia is a powerful force! As Isaac Newton said, “an object at rest stays at rest and an object in motion stays in motion…”
The key in this scenario is to incentivize action by agreeing on a priority (maybe letting go of knowing it’s the “right” one) and creating accountability for the execution of that priority. It’s extremely difficult to commandeer executives’ time, not to mention other resources, if no one is accountable for an outcome. It’s also important to remember failure is an outcome! At least it represents action, and, when undertaken deliberately, can inform the subsequent projects.
Key takeaway: When failure is acceptable, prioritization and assigning accountability is easy.
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