30 June 2020

Why is the human element so crucial in digital transformations?

A recent conversation with one of my customers made me consider an aspect of digital transformation that is rarely talked about: the human element. As with so many other transformational discussions I’ve had, this one revolved around the use of specific technologies and solutions, and the hesitations that accompany it. But really, what is the human element? To me, it refers not only to the people whose jobs and functions are affected by digital transformation, but also to the impact it will have on consumer experiences.

This is not the first time I’ve highlighted the people aspect. In the blog “Digitalization trends: What to expect in 2020,” I mentioned that the new year would bring an increased emphasis on how a more human-centric approach can have a positive effect on transformational journeys. Mid-way through 2020, I believe this to be even more true.   

First things first: Start with a holistic view

So, why is there hesitation when considering the human element? In this particular case, the answer was surprisingly simple. The immediate focus of my customer’s management team was establishing a digitalization roadmap. Their philosophy was to wait until a later stage before considering how people fit into the picture. They felt that the primary function of the roadmap was to look at where and how technology could be applied within the company.

As you may know, I am a strong believer in taking a holistic approach to digital transformation, so the roadmap argument makes perfect sense to me. The best transformational outcomes I have witnessed or heard about have started with the creation of a digital roadmap tied to a company’s specific business drivers and vision of the future. Now, I may be biased since I host roadmap workshops myself, but organizational change can easily be integrated into a digital roadmap. How? By asking simple questions like, “How will these technologies be used, and by whom?” Of course, you need to make sure you involve the right people in those discussions, but let’s touch on that later.

The challenge with creating a roadmap and overcoming cultural resistance is not unique to any one company. In fact, according to a recent ARC study, more than 60% of companies that have begun a successful transformation reference the roadmap creation as one of the biggest hurdles towards their success.

The same survey also notes that more than 50% of companies found it challenging to address the cultural resistance to embracing new technologies, even when there is a clear benefit in doing so. I believe that this resistance is primarily rooted in the fact that employees are kept in the dark about the digital transformation and how it is going to impact them. And since most people tend to fear or feel very uncomfortable about the unknown, their instinct is to resist it. By addressing how people respond and adapt to change, however, resistance can be minimized.

Early involvement in the transformational process

One key aspect of achieving this is to involve employees in the transformation process. Sometimes having only the executive-level management team involved isn’t enough. While it is critically important for them to be driving the effort, one pitfall of not involving others is that the strategy may not be very impactful. From my experience, I know that I take much stronger ownership in any plan I am directly involved in creating. Once my customer and I started discussing this topic in more depth, we quickly agreed on two additional key benefits: 

  • Since employees are the ones responsible for how a department is run daily, their perspectives are invaluable in making sure that what they do, how they do it, and why they do it is accurately captured. A positive side effect is that if you solicit feedback, they’re going to expect to see changes showing their input was considered, which can lead to stronger buy-in.
  • By reaching out to employees, you may also be able to identify a few key team members who are more open and willing to accept change. By getting them more involved in the process, they can act as internal champions as well as being the voice of that department.

Show an understanding of the impact it has on work processes, tools, and functions

Once the roadmap is ready to be implemented, new tools, work processes, and functions will change daily tasks drastically. During this phase, it is key to be extra understanding and empathetic of your employees. As my customer noted, although some of them have been involved in shaping the roadmap, others may need more support. Change tends to happen very quickly at this point. Tasks may come up that fall well outside of what is considered typical for an individual or a function, and perhaps it may be necessary to find resources outside the company to fill a core knowledge gap. Be mindful of the fact that people are being asked to do things differently, which not everyone is comfortable with. This is another area where early involvement can help team members visualize the future and prepare for the coming changes. This gives them time to adapt to the new normal. They may even see opportunities to work in new areas that will expand their knowledge. Support them in this endeavor by offering them tools for upskilling, retraining, certification, etc. Making investments upfront to help prepare employees for significant impacts to their jobs can save a lot of resources and time down the road.

Look at your customers, too

While considering the human element inside the company is essential, you also need to look outside the company. For instance, what about the people who buy your products, services and solutions? Any efforts made internally should be made for one reason, and one reason only: to create improved customer outcomes.

Think about what the ideal customer experience should look like without limiting yourselves to current capabilities and work backwards from there. Two examples I typically bring up in conversations like these are that of Nike and Dulux. Do you think that Nike has made significant investments in their manufacturing facilities just for the sake of making those investments? I doubt it. Rather, a more likely driver of these investments is providing customers with the ability to design their own shoe that supports their desire to express themselves as unique individuals. What about the Australian paint manufacturer Dulux? When they built a completely new plant, they were surely looking at making their paint manufacturing process more efficient – no doubt about it. But what about the fact that they are now able to create batch sizes of a single pallet, which enables them to better serve those customers that have a specialized need for a small amount of paint? That is keeping the end user in mind. So, don’t forget to look at digital transformation as an opportunity to redefine your customer experience. As my customer diligently emphasized, while this may not be the easiest route to a transformation journey, it may very well be the one that proves most valuable.

We ended our talk with my customer saying that the conversation helped expose aspects of digitalization to which he had not previously given much thought. The next step for him was to engage the management team in a dialog about how they could take a more human-centric approach to their transformation journey.

When looking at the digital roadmap, remember to pause and reflect on new information, consider what adjustments need to be made, and then formulate your updated plan.  

How will COVID-19 impact the human element?

I’ve been reflecting about how the current COVID-19 situation could potentially impact digital transformations moving forward. I truly think that this is an opportunity to make bigger changes rather than the smaller, incremental changes typically recommended by change management experts. Our relationship with technology has changed significantly within the last few months. People who may have been hesitant about using technology are now relying on phones and computers to do the simplest tasks to stay safe and healthy: online grocery shopping and delivery, video calls with friends and family, and even virtual offices.

Digital transformation is no longer a discussion of the future. It is here to stay and ever evolving, and with it, the importance of the human element is also increasing.

There is much more to digital transformation than the human element, so look out for my next blog about five key ways to achieve a successful digital transformation.

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