Why having a people focus is critical for effective digital transformation

The term digital transformation has been widely used in business circles for years. Senior management teams have embraced it as a strategy for improving operations, lowering costs, and boosting the bottom line.

While the term is widely understood, it can still mean different things within different organisations. For some, it involves the streamlining and automation of existing workflows and processes. For others, it covers a complete overhaul of operations and the digitisation of large areas of activity.

Deciding on a definition

In an increasing number of cases, digital transformation is being seen for what it really is: change management for the digital age. Change management, by its nature, is people-centric. It’s about leading and taking people on a journey and preparing them to both accept and embrace the change that is before them. However, unfortunately, this is often missing from too many digital transformation strategies.

In reality, far too many digital transformation projects are myopically organised around technology. The approach tends to be: purchase tools, deploy platforms, and repeat until the organisation is “transformed”.

In reality, however, things are different, as organisations are not built around technology but actually around people. So perhaps it makes sense to start any transformation efforts with them.

Having a people focus is vital

This lack of focus on people was highlighted in research from legal firm Baker McKenzie. It found a lack of people focus in many digital transformation efforts. Of respondents to the survey, 45 per cent were focused on building personnel infrastructure, 40 per cent on promoting new and agile ways of working, and 28 per cent on creating the culture needed to deliver transformational projects.

Perhaps unsurprisingly, respondents then said the biggest barriers to accelerating and scaling up transformation efforts – aside from budget – included expertise/skills (43 per cent), lack of clarity and lack of buy-in (both 31 per cent). That is, three of the top five barriers to moving transformation out of small-scale efforts are related to people.

It’s also common knowledge that a significant proportion of digital transformation programs don’t go to plan. According to consulting firm EY, it can be as high as 50 per cent.

EY’s research shows the four main reasons projects fail aren’t because of technology. Rather, they don’t go to plan because there’s no clear end goal or people-first approach used, or due to a misunderstanding of what was being transformed.

Again, two of those four reasons could be considered people-based. But the distinction to be made here is between people and leadership.

The role of leadership

People, process and technology (PPT) aren’t the only factors at play in transformations. Effective leadership is also a factor that is distinct from “people” in this context. Unfortunately, many organisations don’t consider the impact of leadership – or a lack of it – in its own right.

However, leaders have a critical role to play in transformation programs. They are responsible for articulating a clear vision, driving alignment, removing blockers and creating incentives for people to invest their time and themselves in the programs.

Treating leadership and people as distinct variables in transformation programs will likely bring organisations closer to resolving the misgivings or inefficient aspects of their current initiatives.

Many organisations find the Lippitt-Knoster model for complex change management can be a useful way to visualise and simulate where transformation programs are going wrong from a leadership versus people perspective.

The model considers vision, skills, incentives, resources, and an action plan to be the five key ingredients to effective change. It should be clear what happens if one of these is ineffective.

For example, if people are confused, it’s probably due to a lack of vision or north star. If people are anxious, they may feel they don’t have the skills to carry out the work. If they are frustrated, it may be that the incentives for them to come on the digital journey and commit to the process aren’t there.

The model shows a lot of potential things that can go wrong with change – and therefore digital transformation – programs, where the common denominator is either people or leadership. In almost all cases, leaders are best placed to do something about it.

Clear vision is key

To establish a clear vision and a defined path forward, business leaders need to retrain their focus on being people-centric – indeed, even people-myopic. By understanding how teams of people work, what their processes are, and how they collaborate, organisations are more likely to be in the right mindset to see how technology can be used to improve those human-centric processes.

Selecting the right technologies and tools is clearly vital for a successful digital transformation project, but organisations need to go much further. By maintaining a constant focus on people, the end results will be much more effective and add far more value in the longer term.

By Chris Ellis, director of pre-sales, Nintex