Why Digital Transformation Pivots on People, Not Just Tech

Watch now: CPO Lara Pyko talks about the most critical aspect of success in an organization

The challenge organizations face when figuring out how to transform is not always a technology challenge; it’s a people challenge. If you bring in fancy, new technology but do nothing to give your people the skills to use it or modify your culture to be more adaptable, the sought-after change will likely fail.

Because digital transformation is transformation at its core, no matter what technology you may be using, it’s important to consider the following:

• Decide which part of your organization most needs to change and when.
• Think through the organizational structures that need to evolve to support that change.
• Create a cultural environment that enables and allows you to scale that transformation.

Clarifying the scope of organizational transformation

Facilitating transformation starts with going back to the reason why your organization needs to transform in the first place.

• What problems are you looking to solve?
• Why are you committing to changing things?
• Where should you begin?

These questions and more need to be clearly communicated and referenced during the planning process.

Many times, people assume that it is the entire organization that needs to transform. It is entirely possible, however, to designate semi-insulated environments where it’s easier to test out new ideas. Use that to scale up and out as needed. This can work particularly well in more traditional organizations where there’s a certain part of the business that might be stable for the foreseeable future, but still needs to rethink digital services, or experiment with add-ons or new business models. There is no one-size-fits-all approach for each organization.

Transforming organizational structures

Digital transformation may be the goal, but you’ll likely need to reconfigure or reinvent the kind of organizational structures you have and the ways that your teams work. Take a step back and think about what needs to change in the processes you have, irrespective of whether it will be digitalized or not. Ask:

• How are you doing things today?
• How will you do them tomorrow?

Once you’ve got that figured out, then you can decide how your organization will change how things are done – whether by new tech, improved communication, etc.

Mercury Systems is a good example of this. Their executive team approached digital transformation as a business vision – something that should be supported with technology rather than technology being the end goal in and of itself. That vision included adopting the organizational structures that would help make it a success – in this case, the Mendix digital execution framework for low-code development. This allowed them to think through how to attain both short-term and long-term goals in a sustainable and scalable way.

Creating an environment of change

Effective digital transformation results from more than just investing in the latest, most brilliant technology. If your workforce isn’t skilled enough to use it or make the most of it, then you really haven’t solved anything or driven any real business value. This is where equipping your people with the right skills becomes a priority.

What are the right skills, though? Certainly, being skilled in the technology you’ve invested in to bring about digital transformation is important. Such hard skills are more easily quantifiable and an obvious investment choice. However, as technology becomes smarter, soft skills such as critical thinking, communication, and problem-solving become more critical. In fact, according to McKinsey & Company, the more automated your business, the more likely you are to see an imbalance between hard and soft skills.

Addressing such skills gaps means creating an environment that enables your teams to:

• Change
• Rethink
• Learn
• And most importantly, unlearn

That can mean everything from building time and space into workloads for learning to nurturing psychologically safe work environments.

The idea is that the core of any digital transformation is actually the transformation itself, which your people are central to. This requires you to create an environment where the culture allows enough space for examining organizational structures alongside experimentation and failure.

Whether you decide to fail fast or succeed slowly, the point is for you to move along a long-term game plan that works best for your organization and gets you to your end goal. After all, failure is only a strategy for gaining success in the long run.