In this article we will discuss what we often see happening in today's digital transformation initiatives. Additionally, we will delve a bit deeper into some of the harder issues to resolve. Lastly, we will review some of the mitigation strategies that can help improve your organization's chances of success.
There is a myriad of reasons why individual organizations struggle to be effective in their digital transformation efforts — and all of those reasons have a common factor: People. For example, how we think, learn, process information, and treat each other all play an important role in the success of any initiative requiring the cooperation of others.
Digital Transformation efforts are huge initiatives that require the cooperation of the entire organization. We have tools and techniques, like the use of business analytics for decision making, that help us to mitigate our cognitive flaws. We also have processes and methodologies that help define how we interact with each other. These also serve to lessen the negative impact of our cognitive challenges.
Cognitive challenges refer to the mental barriers that individuals and organizations face when trying to change their behavior and adopt new technologies and new ways of working. Some of the most common ways these issues manifest themselves is by individuals exhibiting basic negative behavior, such as resistance to change, fear of the unknown, and a lack of understanding of the new technology.
Resistance to change is a common cognitive challenge that arises during digital transformation initiatives. Employees may feel comfortable with the current way of doing things and resist any changes that disrupt their routine. Organizations can also enact so much change, so often that team members develop change fatigue and are simply tired of the constant shift and churn in the ways they get their work done. This can lead to a lack of buy-in from employees and a failure to fully adopt the new technology.
Fear of the unknown is another cognitive challenge that can hinder digital transformation initiatives. Employees may be hesitant to adopt new technologies as part of a whole-scale transformation because they are unfamiliar with them and fear they may not be able to use them effectively. This can lead to a lack of confidence in the new technology and a reluctance to fully embrace it.
A lack of understanding of the new technology is also a cognitive challenge that can lead to the failure of digital transformation initiatives. Employees may not fully understand how the new technology works or how it can benefit them. This can lead to a lack of motivation to use the new technology and a failure to fully integrate it into the organization, creating a state of inertia.
If we delve deeper into these initial failure modes, we find that there are more insidious cognitive flaws, that we all have, that negatively impact digital transformation initiatives. Here we will talk about three that I have seen the most in 25 years of delivering IT solutions:
Escalation Commitment Theory
Delusional Optimism
Linear Thinking
Leader A says: "We hope to achieve 2x growth over the next two quarters."
Leader B says: "We are planning to achieve 2x growth of the next two quarters. Here is the plan we are going to execute to make this goal achievable."
Which one would you bet on?
To successfully overcome the cognitive challenges that arise during digital transformation initiatives, organizations must take a proactive approach to change management. This includes providing employees with the necessary training and resources to fully understand and embrace the new technology, processes, and way of working. It also involves creating a culture of innovation and continuous learning, where employees are encouraged to experiment with new technologies and share their experiences with others.
However, mitigation efforts can't stop there. We recommend the following actions to help ensure initiative success.
Lead from the front - Executive leadership must be fully engaged to maximize the overall impact of the transformation. Without executive leadership engagement, the initiative will not succeed. That means owning the outcome. It means demonstrating that you are personally invested by regularly monitoring progress, removing roadblocks, and providing strategic oversight to ensure organizational alignment. People do not respect what you expect… People respect what you inspect.
Focus on business agility - Teams need to be disciplined and adhere to proven "lean-agile at scale" methodologies while driving the business towards end-to-end alignment. The methodology you choose is less important than the organization's commitment to it and willingness to see it become a part of the team's DNA. Additionally, the entire organization must be focused on creating products and services that customers want and can pivot without remorse or guilt when appropriate.
Empower your people - Decisions must be made as close to the problem as possible. Countless examples exist of employees being able to create amazing customer experiences due to being empowered. Zappos, Ritz-Carltonand a few other companies come to mind. Executive leadership that dictates the solution the team should create is an anti-pattern for employee empowerment. Instead, executive leadership should focus on articulating the business outcome they need to achieve and empowering their team to innovate in creative ways to achieve those outcomes.
Train your team - Teach your team to Beware of Cognitive Blind Spots. If everyone in your organization understands how easy it is to fall into these and other cognitive traps while trying to deliver on large initiatives, they will be more likely to address problems proactively. Waiting to educate people until the problem presents itself wastes time and emotional energy, and is a drain on organizational velocity.
Every large-scale initiative is fraught with people problems. However, understanding what they are and dealing with those challenges proactively will work to improve your team's ability to work together and will greatly increase your overall chances of Digital Transformation success. In our next installment, we will be talking about the evolution of the PMO and how they are migrating away from strictly focusing on governance to being a key catalyst for value delivery in the organization. If you find this content helpful, please sign up for our mailing list to get weekly nuggets in your email inbox to help you improve your team's operational velocity.