Digital Transformation Success—The Human Factor

Amid a colossal digital transformation, this is usually the last thing companies think about—it should be the first.

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Digital Transformation involves using technology to drive a range of improvements. As a term, it can quickly become a buzzword overused by organizations hoping to increase efficiency and their attractiveness to the next generation of customers. But over 70 percent of these transformations fail to deliver results, often due to missing one critical factor: the importance of people. When thousands of employees need to be brought into the vision, transformations are a confusing time, and the bottom line is that they only deliver if you focus on the people adoption. Transformation can obviate countless tedious processes and make the customer experience a joy, but nothing can happen without bringing your people along with you in this process.

Therefore, amid the myriad tech implementations it takes to arrive at digitizing processes, companies should be extremely wary of simply overlaying legacy systems without being attentive to the critical human elements. Technology is not a fix-all—it must be supplemental to people within the organization understanding the changes that are happening therein, and the purpose behind them. It’s up to leadership to instill this into the culture. Digitizing a company cannot be done on autopilot, it requires savvy communication as well as decision making, an understanding of people, and a huge measure of guiding them. In fact, when it comes to it, we’ve found over and again that the people element is the make-or-break factor in terms of whether a digital transformation works.

While companies see creating an interconnected, holistic enterprise as today’s imperative, the lesser touted imperative is the need to make the vision understood by those who’ll actually be leveraging the technology. The vision must get implemented top down and across the organization. No matter how advanced a company’s tech platforms are, they don’t come to life or get properly used without leadership making sure that both the higher purpose and the day-to-day hands-on usage of that technology are understood.

Platform that Digitally Maps to the Business

New technology can only benefit a company when it’s tailored to an organization’s specific needs—it’s not a one-size-fits-all solution. Developing a meaningful platform that digitally maps to, and transforms the way a company conducts its business, interacts with its clients, sells its products, etc., involves effort from both IT and a leadership team with an intimate knowledge of both processes and people. Senior members need to observe the way workers operate and ask whether the technology actually expedites these processes or makes them more complicated. Are the new implementations and their purpose understandable to every branch of the organization? Misuse stemming from confusion surrounding an implemented technology can completely defeat the promise of added value.

So, besides having a clear vision for the new digital infrastructure, leadership must put the full range of communications and interpersonal skills at their service. While technology might be useful for automating various interactions between links in an organization’s chain, it’s not going to help if it’s not understood. Collaboration within different areas is needed to make the new system successful – it can’t be siloed as one function – the organization in its entirety needs to be aware of the change. People need to adopt that change. Fundamentally if you’re shifting someone’s day job they need to understand why and what you are trying to accomplish and to whom they can go with their questions.

Without taking this approach, people lose interest, may resist passively, and definitely will ensure that management loses out on the desired productivity gains. If you’re innovating the way people have done their job for a decade or more, they need to agree that the new way is a good thing, and be prepared for the change. Training is vital. People who are operating the new interfaces or systems need to learn how to use them. They need to be walked through, trained, and reassured. A lot of time and money are spent on process design and system development, but not enough is spent on people. When you incorporate this element, the transformation will succeed.

Providing Incentives

Humans are creatures that follow incentives. If people don’t understand what the organization is trying to achieve, it will be harder for them to have the motivation to collaborate. Every rung of the corporate ladder must be reminded that their performance has a direct correlation to both their personal success and the success of the company. This is where leaders become motivators, and inspiration cannot be automated. When senior leaders provide the sort of guidance and reassurance employees need when facing new systems with positive and vocal reinforcement, employees feel less alienated by the incorporation of that new technology and less at risk of their job disappearing due to the change. A reminder to employees that the core values of an organization remain, even as the tools they use can rapidly change, goes a long way.

The actual users should also have a role in designing and testing systems intended for them, versus tech simply saying to them, “Here it is, use it.” When designing a digital transformation, people need to participate in what the vision is and focus on how they would use it, and what matters most to customers – what are the real moments that matter, as well as what’s going to add the most value – what will make those customers want to use you, buy your products and services, and not another company’s? That often involves speaking with your customers and understanding what’s most important to them, what do they least like about working with your organization.

An effective leader also functions as a tech on-boarder. Occupational habits are formed quickly, making employees resistant to change. Organizations that successfully incorporate tech have leaders that act as an intermediary between the digitization program and the employee—they both translate technical jargon and convince workers of its benefit. Companies without leadership committed to taking a one-on-one approach to digital transformation will experience passive resistance.

Focus on Adoption

Unsuccessful organizations take a lopsided approach to tech implementation—they focus too much on the system itself and not enough on adoption.

Organizations looking to boost revenue shouldn’t just focus on the needs of the employee—but also the needs of the customer. Technology can increase consumer loyalty by increasing personalization and by making their life much easier. For example, a company appears human when it remembers a previous customer’s ordering habits and therefore recommends products in line with their tastes. More important than complex algorithms are the simple concepts of transparency and ease of use. Customers want products that inform them of each step of the transaction process — “your order has been shipped,” or “your application has been submitted.” They also frequent institutions that eliminate unnecessary labor on the user’s end, such as a bank app that automatically fills in a user’s information. While these advancements are crucial, companies should be sure not to fully eliminate the option of talking to someone as there are still customer segments who value that line of communication.

A successful digital transformation connects three points of a triangle—the vision of leadership, the practices of the employee, and the wants of the customer. When these three facets work together to incorporate cutting-edge tech into key processes, organizations can save time, money, and position themselves for sustainable growth. For proof of this, one can look to a recent University of Michigan study that measured the positive correlation between organizations that have leadership with strong interpersonal skills and an increase in revenue. Leadership that is compassionate, positive, and transparent can drive not just morale—but profitability as well, when the transformation actually produces return.

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John Rodgers and Rajeev Aggarwal // John Rogers guides day-to-day operations, sets and steers SSA & Company’s business strategy, and oversees the Financial Services, Insurance, EMEA, and Healthcare practices. John also serves as an Executive Coach for C-Suite leaders of multiple financial services firms. Previously, John held roles as Director of Lean Six Sigma for Ford Motor Company–Marketing, Sales, and Service Group and Master Black Belt at GE Capital. He has significant financial services operating and management experience with Aetna Life & Casualty and Cigna and has multiple insurance related designations, including CPCU, RPLU, ARM, and AIS. Rajeev Aggarwal leads SSA & Company’s U.K. Financial Services practice and serves clients based in Europe, as well as global institutions with operations in Europe. Over the last 20 years, he has helped his clients grow revenue, improve efficiency, and enhance customer outcomes through operating model transformation. His deep expertise spans strategy, design, and execution. Recent examples of his work include carve-outs, restructuring distressed players, mergers, and driving large-scale performance improvement programs. Prior to joining SSA & Company, Rajeev spent 18 years in strategy and operations consulting with Booz & Co. and PwC/Strategy&. He also spent two years building a profitable Insurance customer data analytics advisory startup in the UK. He has advised executives of Banks, Insurers, and Governments across Europe, Africa, the Middle East, and North America.    

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