Managing change to ensure digital transformation success

Managing change to ensure digital transformation success

Philip White

15 February 2022 - 7 min read

Digital Transformation
Managing change to ensure digital transformation success

Change is intrinsic to digital transformation. The whole purpose of these projects are to innovate and adapt business processes as a means to maintaining competitive advantage. 

Research shows that organisations’ are anticipating this change; recent findings from the Harvey Nash Digital Leadership Report reveals that half of digital decision makers anticipate some form of major or radical change to their main operations over the next three years. With a 16% increase from the previous years’ report, this finding highlights the ongoing expectation for transformative change across the tech industry. 

However, committing to change is only the first step. Your organisation needs to see change as more than a necessity. Think of it, instead, as a tool for achieving long-term success in digital transformation. How can you future-proof your digital initiatives? Lead teams in an agile, adaptive way? Maintain collaboration both internally and externally? 

This article explores some of the key strategies for managing change during your digital transformation, so that your organisation can achieve company-wide buy-in and a seamless transition to a digital future. 

“Transformation and change must be approached holistically; you’ve got to approach the challenge of the problem, but also the culture, the people, leadership and coaching. Everyone in the organisation should be onboard with how to solve the problem, instead of the problem being delegated to one team” - Chris Paton, Director of Afghanistan Strategy and Plans, 1994-2012

Prepare for the worst (and the best) 

Companies should dedicate time to anticipating the outcomes of their projects — what could go very wrong and what could go very right. This process has been formalised by psychologist Gary Klein's Project Premortem, a “hypothetical opposite of the postmortem” that imagines future events have already occurred. 

In this activity, an organisation will visualise the worst, most disastrous future scenario before addressing:

  1. How the organisation might have reached this position
  2. What can be done to address these potential pitfalls. 

Think of this as a process of ‘working back’ so that you can prevent issues before they happen. 

Klein also recommends that you also repeat this exercise from the viewpoint of “catastrophic success”. In this scenario the organisation is asking “what if things go so well that we can’t keep up?”. If a company can’t keep up with demand and fails to deliver for their customers, then they will begin to lose customers. 

Compiling a list of hypothetical events that would cause either catastrophic success or failure is a good starting point for planning your company’s future. Consolidating these lists will then give you the scope looking at other factors like the likelihood (how likely is it that this will happen?) and proximity (how close is this issue to our current situation?) of these events happening.  

Ultimately, the more realistic that you can make this ‘pre-mortem’ exercise, the better results you will get. It's all about getting people used to the idea of change within the organisation before that change actually takes place. 

Devolve decision-making

In the same way that agile principles advocate self-organised, reflective teams, devolved decision-making is about assigning team’s a greater degree of authority.

There is a tendency to keep major decision-making to senior, c-level executives during times of change. However, doing so could mean missing out on many other great ideas in other areas of the company. Delegating authority to smaller teams opens more areas for feedback and innovation. 

A degree of control over management can be retained by including parameters — the boundaries which people can operate within. The size of these parameters will determine how much control the company retains. 

Parameters could include budget limitations, policies and other factors. As well as giving greater freedoms, larger parameters allow employees to try new ideas and methods of working.

Organisations may opt for smaller parameters when they are starting out with this technique to allow themselves the confidence and comfort to know that this can work. Teams will benefit from this, too, since they won't feel overwhelmed by the possibility of too much freedom that might come with larger parameters.

Buurtzorg —  a Dutch homecare organisation — is a stellar example of devolved decision making in practice. Operating with a 14,000 strong workforce, the organisation is structured into 12-person teams. The teams are responsible for their own P&L, recruitment, training, financials, and business development, like mini-enterprises within the organisation. 

Most impressive are the statistics surrounding Buurtzorg; 30% better customer satisfaction than than the national average and a 65% lower overhead cost than its competitors. 

Organisations can tap into this people power by balancing strong company values with appropriate incentives and responsibility. Establishing such values will guide decisions and rewarding individuals will then inspire further creativity and collaboration. 

Practise agility 

Agility is a crucial part of any digital transformation journey. Just over half of C-suite executives ranked increasing agility as a very important enabler of growth in their company, according to a recent PwC survey. 

Yet with change, comes challenge. The annual state of agile survey shows that one third of all challenges in adopting agile are caused by inconsistencies in practises and reluctance to change.

When making any major strategic decision, it’s Important to build in the what and the why around your goals. By applying Agile methodologies, you begin with the 'why' of the project and ensure that the entire process is aligned with business needs. Devolved decision-making allows teams to take control of how they reach solutions. 

Continuous communication, collaboration and feedback sessions enable organisations to adjust to change quickly and deliver business value consistently - A competitive advantage in today’s industry. 

All of the hard work proposed relies on alignment between employees, teams and leaders. It is important to explain intent, so that people understand the direction that the organisation is headed. 

People should be encouraged to think critically and put forward ideas that will contribute to better solutions. At the same time, organisations want to avoid telling people what to do, as this will limit the creative potential of its employees. Further still, it will limit how agile a company can truly be.

Nurturing the individual 

As individuals, each person’s personal resilience to change is unique, which can make managing this area quite challenging. When personal resilience is under attack it ultimately affects our ability to deal with personal and professional responsibilities. That’s why it's important for organisations to create environments where people feel supported and cared for.

Encouraging internal feedback is one way of nurturing individual needs. Leaders who mandate new tech might face resistance from employees and are unlikely to motivate them to use these solutions. When leaders, instead, spend time listening to people and produce a new system based on their requests, that’s when they are more likely to succeed. 

Getting insight into the needs of the organisation from different levels of the business by involving the right internal people is essential, as it will enable you to analyse and dig into organisational needs. Combining this feedback with your organisation's strategic vision will increase the likelihood of developing intuitive and effective solutions.

Above all, it’s the right thing to do to ensure that employees are content with their role and their professional lives. Doing so retains the bond between leaders and employees, whilst also preserving all the knowledge and expertise that exists in the company. 

A change of pace

Digital transformation is a significant undertaking that requires commitment, collaboration and change. But this should be an exciting time for your company too. Taking ownership of your commitment to a digital future means owning the change that comes with it. 

Here we have shown how, through the right planning and strategizing, companies can embrace change as another innovative step on your transformation journey. 

Like digital transformation, change management is a continuous and company-wide responsibility. It involves preparing for the worst (and best!) case scenarios, re-evaluating how your teams work and being responsive to employee feedback. 

Crucial to this setup is an agile mindset, which ensures that feedback is continuous, risk is anticipated and that change is shared. 

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Philip is the Managing Director of Audacia and is responsible for the company's overall strategy and culture.