What is a people-centric approach to digital transformation?
Across industries, digital transformation efforts are struggling to keep up with the innovation and speed necessary for digital success. Technology innovation is outpacing the ability of the business to address digital value creation, delivery & capture. Business is starting to understand the significance of keeping customer at the center of everything. For companies of all types, responding to the changing demands of the digital era means operating with purpose and fostering a culture where communications are transparent and collaborative and where people feel heard. Like for customers, digital transformation must accompany a people-first approach to change, too. Organizations can’t change unless the people in them change their behaviors.
A lot of companies are putting the cart before the horse, by letting the digital technologies drive their digital transformations. Very soon, the executives realize that the technology addresses only the feasibility aspect of the digital solution being pursued. They have to incorporate the desirability from the customer’s perspective and the business viability of the digital solution, as well. Beyond this, for the digital transformation to succeed it is essential to actually rollout the digital solution, that will require leadership, execution, governance, and people engagement issues to be addressed. If at all one reason stands out over all the other others, for transformation failure, it is along the people dimension that results in failure of the initiatives. And sustained transformation success requires a high-performing organization that can adapt to the changes. Key to such an organization is having people-centric approach to the change management in a digital transformation as well.
What are the attributes of a people-centric approach?
Practices that set people-centric approach apart include: consistent communication around the changes being made, especially to those on the front line; clear definitions of roles and responsibilities; people engagement on a personal level; and a strategic approach to talent management. Without employees at all levels having a stake in the outcome, chances are high that the transformation will fail. To deal with constant change, people want to feel that what they do matters and that they are part of a community. They want their jobs to have meaning and purpose. Giving employees a sense of purpose can help counteract the effects of asking them to work in a perpetual state of change, which can be confusing, exhausting, and demoralizing. Providing purpose also has become important in establishing a sense of workplace community at a time when digital technologies reduce face-to-face interactions with coworkers and customers.
Companies have to react faster to demands and expectations of employees and customers in a digital age. Rate at which companies have to get things done has changed significantly. They need to make decisions sooner. Projects have shorter timelines. Customers want products delivered overnight. Competitors pop up more often and introduce new offerings more frequently. The accelerating pace of business puts pressure on companies to act quickly, focusing on short-term results—instead of long-range plans—and addressing issues as they arise. Amidst such a pace, employees want to feel engaged and empowered on the job. Today’s workers prefer interactions that are transparent, genuine, and personalized, and they want to feel that their voices are being heard. To keep pace with digital-era change, organizations may need to adopt entirely new ways of doing things. It goes beyond attending a workshop or developing a new skill, to potentially revising a company’s organization design, team structure, workforce, or mix of products and services. Achieving such change requires altering fundamental behaviors and creating new norms for everyone involved, from top-level leaders to customer-facing and shop floor workers.
Transformational change leadership & roles
Successful companies have leaders that are deeply involved in and committed to their transformational change. Such inspirational leaders in these companies, create energy, build consensus, and instill meaning in the company’s mission. Typically the CEO’s of such companies are visible advocates of the transformation and their commitment is palpable across their organization. Such CEO’s communicate a consistent and compelling story for their transformational change. They also communicate the overarching link between the strategic objectives of the transformational change and overall performance goals. The odds that the transformational change will succeed are closely dependent to how the key roles contribute to the cause.
In any major transformation, the most important role for the CEO to play is that of a visionary who shows the organization the way, by communicating a compelling change story and being a visible advocate for the changes taking place. Senior leaders of such companies, most benefit a transformation when they act as mobilizers of both the message and the people in their organizations. For senior leaders to be successful, they must share aligned messages and provide transparent communication across the organization—on both the changes that will take place and the desired outcomes. They replace people on their teams who aren’t committed to the changes. Human-resources leaders are also critical players—apart from other senior leaders—in the transformations’ outcomes. But in companies with the most successful transformations, HR leaders are best at connecting the high-level transformation objectives with employees’ day-to-day work and communicating about this link to employees.
Program Management Office (PMO) leaders are most effective in a transformation when they act as problem solvers and facilitators. They identify barriers to change in the organization and bring them to the attention of the organization’s leadership, while also serving as thought-partners to senior managers. They are also critical in disseminating transformation-related knowledge and best practices across the organization. The leaders of individual transformation initiatives need to be action owners. In the most successful transformations, these employees have clear ownership of their initiatives, work well with their peers leading other initiatives, and understand the significance of their specific work within the broader scope of the transformation effort. Because line managers work so closely with the front line—whose involvement and buy-in is so important to a transformation’s outcome—their most important role is that of motivator. They must make the transformation efforts tangible and digestible to the frontline employees whose work they manage. They also are critical in motivating their teams to adopt the changes at hand.
Finally, Change agents—they are employees who dedicate significant time to working as facilitators or agents of the transformation—are most valuable to a transformation as role models for others throughout the organization. They contribute the most to success when they demonstrate the shifts in mind-sets and behaviors that the transformation requires and when they support employees in developing new capabilities and mind-sets essential for success. Change agents typically form the spine of the transformational change from top to the bottom levels of the organization.
Transformations are about the people in the organization as much as they’re about the initiatives. The long-term sustainability of a transformation requires companies to engage enthusiastic high-potential employees, equip them with skills, and hold them accountable for—as well as celebrate—their contributions to the effort. Systemically changing an organization requires ruthless prioritization. Executives need to understand the specific outcomes at which they must excel to attain business success.
Effective communication with engagement
Most companies underestimate the importance of communicating the “why” of a transformation; too often, they assume that a letter from the CEO and a corporate slide pack will secure organizational engagement. But it’s not enough to say “we aren’t making our budget plan” or “we must be more competitive.” Engagement with employees and managers needs to have a context, a vision, and a call to action that will resonate with each person individually. It must be a compelling and cohesive story that must engage on a personal level. This kind of personalization is what motivates a workforce for the transformational journey.
When embarking on a transformation, executives should not underestimate the power of communication and role modeling. Continually telling an engaging, tailored story about the changes that are under way—and being transparent about the transformation’s implications—has substantially more impact on an effort’s outcome than more programmatic elements, such as performance management or capability building. But the communication doesn’t end once the change story has been told. Leaders must continually highlight progress and success to make sure the transformation is top of mind across the organization—and to reduce the gap between what employees believe is happening and what they see.
Let us be clear - radical transformational change, such as an enterprise-wide digital transformation, isn’t easy. It goes beyond attending a workshop or developing a new skill, to potentially revising a company’s organization design, team structure, workforce, or mix of products and services. Achieving such change requires altering fundamental behaviors and creating new norms for everyone involved, from top-level leaders to customer-facing and shop floor workers. In such organizations, for change management to be effective, employees need to feel that they are heard, that they are part of the conversation, and that communications are personal. It is crucial that people at every level understand, be prepared, and be able to manage the change. To achieve that level of engagement, organizations must build personalization, speed, authenticity, collaboration, and transparency into methods they use to share and receive information from their workforce.
People expect to be engaged in a more personal manner than before. They want communication to be customized, and if it is, they’re more likely to respond. With a majority of the world’s population using smartphones, employees expect to communicate more quickly and in bite-sized pieces. To encourage engagement, leaders must be authentic—revealing personal stories and emotions, flaws and all—and transparent about sharing what’s happening within the organization. They must also make communications collaborative so that employees feel that their voices are heard. Engaged employees invest more of their discretionary energy in the company’s success than merely satisfied employees. This can be vitally important in service-intensive sectors. Not surprisingly, then, organizations demonstrating high levels of engagement outperform those that don’t.
Adopt agile ways of working
Many companies have adopted the agile ways of working for speed in execution. Agile ways of working make that happen by shaving time from processes, simplifying decision making, and engaging as well as empowering employees and teams. Agile emphasizes speed through minimum viable products (MVPs), shorter product timelines, and in-process check-ins that allow employees to spot potential problems and address them earlier in the process. In addition, agile encourages the collection of feedback early and often, with the goal of creating a better final product.
Agile gives people and teams the leeway to work autonomously within specified structures or processes—what is often called freedom within a frame. Giving people a measure of controlled freedom increases innovation and creativity and boosts engagement. Moreover, agile organizations adopt management structures that make it easy for teams to assemble as needed and work at a sprint, or faster pace. Making teams interdisciplinary, with members from various departments or functions, speeds up communications because people can talk to one another in real time.
Cultural changes within companies will always be slower and more complex than the technological changes that necessitate them. That makes it even more critical for executives to take a proactive stance on culture. Leaders won’t achieve the speed and agility they need unless they build organizational cultures that perform well across functions and business units, embrace risk, and focus obsessively on customers.
Engage employees through new channels.
Companies of all sizes can benefit from creative, more digital approaches to engaging employees during a transformation. The use of social media, change-management apps or games, and live-feedback tools should support and complement the movement of information from the top to the rest of the organization, rather than replace traditional methods. Digital dashboards and personalized messages, for example, can build faster, more effective support for new behaviors or processes in environments where management capacity to engage deeply and frequently with every employee is constrained by time and geography. Such digital approaches can move information by making communication more tailored and personal to individual employees (for example, sending personalized push notifications if a milestone has been reached) and by providing more regular updates on the state of the transformation. Employees can also use these tools to explore and engage with the changes being made, on their own terms and with the ability to provide feedback. More advanced communication tools will be especially helpful in large companies that struggle to engage the front line and in companies with many different sites or locations.
To encourage the lasting behavior changes required, organizations are using behavioral-economics-based prompts, commonly referred to as nudges. When simple and timely nudges are properly deployed, they can steer people to new choices. Digital nudges such as emails, text messages, or push notifications can boost a prompt’s speed and scale, helping behavior changes quickly spread throughout an organization. Digital nudges also produce data that can be used to gauge how successful the prompts are and to recalibrate them as needed. An example of a simple digital nudge is a personalized email reminding someone to complete a task or form. Nudges can be used to hold people accountable by incorporating a social element, such as checking in with a goal buddy or posting accomplishments on a company intranet or internal newsfeed. For example, a team member may send a group text sharing work goals that the sender met that week and spurring the recipients to meet their own goals. Digital tools and platforms, if correctly applied, offer a powerful new way to accelerate and amplify the ability of an organization to change.
Companies that implement organizational change effectively with people-first approach, give themselves a significant competitive edge by focusing on the factors that are essential to success. Change done right is never a one-off project. It is a set of reliable, practical capabilities that harness the energies of the entire organization time after time. The good news is that there is growing recognition of the need for organizational change done right. Organizations absolutely must do a better job of managing change because—clichéd though it might seem—change really is a constant now.