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With any Transformational change it requires a strong change vision, a vision that builds of the strengths of the past but also shows a promising and inspiring future.
With Digital transformation the same basic concepts apply in terms of vision, however for incumbents within an Industry it is important to build the “burning platform” for the need for change.
Figure : Change Management Framework
Digital Change Management
The role of change management in digital transformation era.
1. Leading Change
Requires a Leaders who can tell a compelling story that can motivate employees to change, this story should both show the need and provide a future vision that is clear and inspiring.
They also demonstrate their commitment and energy to the change and ensure key colleagues are committed and actively supportive, in fact they are the role models for the commitment required and the future management style.
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So how do we build the compelling story … it begins with the creating a shared need.
2. Creating a Shared Need
In companies that are established as industries leaders there is a tendency for employees to feel “comfortable” or even complacent, with the knowledge that small incremental improvements will be good enough to sustain their market leadership position. This is no longer true as new entrants penetrate markets with completely different business models and ever increasing levels of customer experience, they completely change the industry norms, and the results can be massive in terms of market leadership positioning, and rapid in terms of the time to impact the market.
Therefore, it is imperative that a clear and compelling need is established for all employees …. For example “let’s be proactive and in control ….. disrupt ourselves before someone new disruptions our market or industry”. It is imperative that the change should be seen as a real threat and in a short-term time horizon, as this is the most effective way of building consensus around a compelling need.
So, what makes a good problem statement and why is it important?
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A good problem statement should state the Users needs and problems, it will guide your team, and provides focus on specific needs that have been identified, it’s a clear definition of the problem to be solved.
For one client we worked closely with their management team to build a future vision starting with examples of disruption that were occurring other industries and then combining this with future scenario “scary story” that envisaged the future in the next 2-3 years and how emerging technologies may impact their industry. When done correctly this can be a very motivating story on how we can drive the change and the need to be ready to embrace the opportunities created by these new technologies, framing it as an opportunity to maintain even grow success in the future.
3. Shaping a Vision
Having established the compelling need it is important that a clear change vision exists so that all employees can be inspired and see that the company has a plan to proactively respond to the future challenges created by “disruptive” digital technologies.
It is surprising how many organizations are embracing digital transformation as the latest buzzword or business trend, however senior management have delegated digital to a small corner of the organization and in worst cases seen as a new IT department initiative, we believe these companies are in real danger of failing to capture the real benefits that digital transformation can deliver, and may in fact be putting the future of their business as risk.
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We believe that for a company to successful transform requires clear direction and guidance from the organization leadership, providing guidance on how we will exploit the opportunities created and what changes will we consider in terms of our business model.
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Digital new entrants are focused on they identifying unmet needs and using the technology they seek to address these needs, without the shackles of legacy processes
and thinking to achieve new levels in terms of Customer Experience
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Often this requires a scanning of the external environment in terms of what are the emerging technologies and how might these impact our business, then identifying what are the current pain points for our customers that if addressed could radically change the industry in terms of Customer Experience, this is what Digital new entrants are focused on they identify unmet needs and using technology they seek to address these needs, without the shackles of legacy processes and thinking, in addition we should also look internally, what are the pain points within our current organization that limit our people from delivering exceptional customer experiences. Combining these technology opportunities to address identified pain points enables clients to develop a roadmap for their digital transformation.
In building this vision it is important to consider some of the key concerns that will typically arise .. will my job be replaced by a robot? … what about connectivity in remote locations …. Are our customers ready for a digital world … will I have the skills required for the new digital future?
While it is impossible to answer all questions in great detail at the start of the digital journey … it is important to establish some strong guiding principles related to the potential changes, such as how will we deal with the people aspects if someone’s job is replaced with technology … are we targeting headcount reductions or are we looking to free up people so they can be reassigned to more value-adding work.
4. Mobilizing Commitment
Building the Transformation core team, with any transformation initiative there is a need to establish a core team with the sole focus of driving the transformation, this means releasing some of the companies best talents to the transformation initiative, but in the case of Digital transformation this will also require new skills sets that most likely don’t exist within the current organization, these include data scientists, data engineers, UI/UX developers etc. While some of these functions can be outsourced to consultants during initial pilot projects, companies should have a plan to develop the required competencies internally.
Establishing momentum for change, with any transformation the need for “quick wins” is a critical factor but in the case of digital transformations this becomes even more crucial, not just for the capture of the business benefits but also as an example of truly agile ways of working. Pilot projects should demonstrate the speed of change that will be commonplace in a digital work environment.
A key component of establishing momentum is the active participant of users in the Design Thinking process, when done correctly this enables the new digital initiatives to capture and address the pain points of the key user persona’s, and then again involving these people in the prototyping feedback sessions so as to ensure the resulting prototype delivers an enhanced user experience.
Done well this helps reduce many of the traditional change management challenges associated with user acceptance of the new technologies and increases the chances of success in the later user adoption stages. It is important for the change management team to ensure that the technology product truly delivers an enhanced user experience.
It is also important to ensure that Stakeholders are also engaged in the Design Thinking process, with frequent feedback sessions to enable them to guide the process, their input is critical at the Define stage, to ensure that the Design Thinking team are working on the “right” problems and also in the Testing Phase to be able to provide feedback as Prototypes are developed and to support the Design Thinking team as part of evaluating the practicality of the proposed prototypes.
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It does not only require an active team
but also ensuring the stakeholder engagement in the design thinking process to provide feedback and critical input
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5. Making Change Last
In the deployment phase, the change management focus changes to a more transactional level, ensuring the desired behavioral changes occur. Often implementation teams are focused on the successful deployment of the technology, ie the apps functions, data transmission, network bandwidth performance etc, however from our experience the real focus has to be on ensuring the behavioral changes occur for example, in the case of the implementation of handheld data acquisition, automated data processing for monitoring asset health releases reliability engineers from many hours of manual data manipulation to enable them to spend more time in conducting analyses of the equipment health and recommending optimized proactive maintenance actions, as this is where the real business benefits are achieved.
For this to occur often requires significant training to ensure the engineers have skills required to conduct these analyses, it could also result in changes to KPI’s, roles and responsibilities and reward mechanisms. Another example was in the case of Robotic Process Automation (RPA), which freed administrative staff from monotonous data processing work, so that they have time to undertake more value adding work such as quickly resolving root causes for repetitive issues, providing higher service levels to clients and customers.
Even the training processes can be enhanced as a digital experience from registration process, through to pre-post training assessments with the use of online testing quizzes and apps.
6. Monitoring Progress & Benefits
As companies embark on a digital transformation initiative there is often a lot of excitement and energy to re-inventing the business, with thoughts of defining new business models, using advanced analytics to gain new insights, etc, however once initial excitement dies down there is a real need to put in place metrics and responsibilities for ensuring expected benefits are realized. This ensures difficult issues are addressed and not allowed to slide as these can have a significant impact on the overall business impact.
An example might be the transition from personal Sales Consultants to an online market place, where more and more customers are ordering online and using online automated technical support rather than calling for a visit from a Sales Consultant, careful attention must be given to this transition as the changes in workload and patterns for the Sales Consultants needs to be managed.
If not addressed the Sales Consultants can in fact hinder the process by continuing to visit clients and “compete” with the online offering, rather than being redeployed into greater value adding roles.
While this may not be different to other transformation efforts, one of the key differences is the speed at which the changes happen, since the whole organization will be transforming into a more agile management style, the change management team must lead by example by ensuring that an agile approach to solving change related issues is also utilized.
Finally a key role of the change management team is in developing mechanisms to constantly seek feedback on the digital solutions as well as ensuring the changes in behavior are sustained.
7. Change System & Structures
For transformation to be truly sustainable it requires fundamental changes to the systems and structures. In a digital transformation we are seeing that companies are fully embracing a new agile management system across all aspects of the business, not just in the delivery of the digital products but also in the way they manage their day-to-day operations.
As new business models emerge companies are also realizing the impact on reward and recognition systems, the emergence of the “gig economy” has impacted many aspects of business in terms of the relationships organizations have with employees and other stakeholders.
This also has implications for the ways in which companies retain and develop talent within the organization, the digital transformation has seen the emergence of new roles related to data scientists, data engineers, and generally a greater awareness of agile management, technology and analytical skills.
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All these changes are also resulting in companies to re-think how they are organized and structured, moving from rigid formal hierarchical functional structures into team-based matrix or product aligned type structures.
So, while digital technologies may be the new driver, the challenges and the need for Change Management have become even more critical to the successful achieve true Digital Transformation
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If you would like to know more about our Change Management services, please contact our expert,
Alec Hutcheon
Digitalization & Change Management Expert