Digital transformation is no longer an option. Every organization knows it must become a digital leader to survive and thrive. This is why businesses and governments are throwing trillions of dollars at new technologies.
Organizations must build and deliver exciting new software applications. They must continuously innovate, move quickly, adapt, and stay ahead of the never-ending onslaught of digital data, experiences, and channels.
Users are demanding this. Everyone expects an easy, digital-native experience, whether ordering pizza or automating entire network infrastructure. Accordingly, we’ve seen the massive rise of cloud computing, open source technologies, data analytics, artificial intelligence, and many other innovations.
However, well over half of all new software or IT projects still fail. For example, a 2017 study found British businesses wasted £37 billion a year on failed agile IT projects. The root cause could be many things, but I believe one reason for so much failure and lost budgets is leaders are thinking about technology in a vacuum.
Technology alone does not solve digital transformation. It doesn’t address the fundamental issues that block or drive transformational success, and the most critical dependency.
That is people.
In fact, there are three key elements that technology cannot resolve: Trust, Instinct and Cultural Adaptation. These are human capabilities that even the best AI cannot replicate. As we transform, focusing only on the technological aspects and not the human connection, we ultimately lead to failure.
Human connection is the killer application for digital transformation.
However, it’s so much easier to assume a new mobile app, cloud platform, or software product can quickly solve our competitive woes. Which is why I constantly see leaders fall into the technology sinkhole, or as I like to call it, the squirrel effect.
Organizations declare a “public cloud first” initiative without ever establishing a clear, comprehensive cloud strategy. Moving an application to the public cloud may sound simple. However, no application lives alone. It has many inter-dependencies from other applications, infrastructure, business processes, and data stores, as just some examples.
Applications also have human dependencies. For example: How many users does that application touch, and how do users access it? What is the user experience? How do they authenticate? What are the data security or privacy requirements? Can you maintain required access control policies?
These are just some questions I pose. Public cloud, or any infrastructure, may still be the right answer. However, organizations need to establish a standard set of criteria, capabilities, and analysis for anything moving to cloud.
And yet, CIOs and leaders everywhere flipped to cloud first “strategies” faster than you can hit a one-click order of a new Kindle book on Amazon.com.
The same is happening today with containers. If only we can put all of our applications on a container platform, and give developers containers to spin up and build new apps, all of our digital transformation woes will be solved!
Research is consistently showing the impact of people skills, or lack thereof, on digital transformation success. There is a growing digital skills gap around the world. What’s more, the people cultural aspect is increasingly proving to be the biggest blocker to digital transformation.
Boston Consulting Group states culture clash issues are becoming a huge obstacle: “It’s not a digital transformation without a digital culture.”
In fact, a strong culture valuing trust and openness is key to any transformation, digital or otherwise.
I love how Daniel Newman, principal analyst of Futurum Research phrases it: “Culture is the operating system of the entire organization. It is time you let culture drive digital transformation from start to finish.”
One of the most common cultural blockers I see is around command and control leadership, typical in hierarchical organizations. Digital Transformation cannot be a dictate from on high. The CEO needs to set a vision, but everyone must believe in the change and why the change is happening. People need to connect to the change and feel they can have an impact. Or that their job is safe amid the change.
Another cultural barrier is siloed behavior. Often, teams refuse or just don’t know how to break out of their siloes or swim lanes. Digital transformation requires collaboration and breaking down boundaries, as data, insights, applications, and processes need to flow seamlessly throughout an organization.
Transformation also takes trust. Trust in your leadership, in each other, and in the process. And trust in your brand.
Kai Grunwitz, Senior Vice President, EMEA at NTT Security, created what he calls the three main pillars of successful digital leadership. The first pillar is: Trust!
You must also trust your “gut”. Digital transformation success requires using and trusting your human instinct.
Think back to a time when you made a decision purely based on data. For example, in a hiring process, where a candidate looked perfect on LinkedIn and in his resume. However, when you met this person face to face and looked them in the eye, your gut and instinct told you something did not feel right. But you ignored it. And what happened? Chances are it was an expensive hiring mistake.
In my experience, every time I have relied ONLY on data and not also taken into account my human instincts, I have failed or misjudged. In the example above, I’ve hired people who turned out to be bad cultural fits. Competency is rarely the issue. It’s a human thing.
The same is true for startups trying to get funding. A startup can look perfect on paper, or its product can seem revolutionary. However, entrepreneurs must still make the trek to Sand Hill Road to do a personal pitch. I once flew to Boulder for a 30-minute meeting, because a leading VC was willing to meet with me. It made a difference.
If this is true, then why are people-related areas the last place we invest, change, or even anticipate?
Because It’s hard.
Anyone who has ever led teams or organizations knows the people factor in leading is much harder than the operational or financial factors. Dealing with the myriad of human idiosyncrasies feels like a superpower few of us possess.
Therefore, the needed cultural changes, employee training, diversity and inclusion initiatives, and organizational development strategies are ignored or put on the back burner. It’s so much easier to believe that technology can solve all of our woes. If only Alexa could manage our people!
It’s important to note that most leaders, especially in technology, are not equipped, incentivized, or measured on these areas.
True digital leaders understand this human factor.
They are systematic in how they incorporate cultural change and dynamics. They invest in retaining their top talent, not only developers but all critical roles.
I have created what I call the eight human factors to successful digital transformation. I outline them here, and then dig into each one in additional posts.
Our reality is now digital, and it is interwoven into every part of our lives. For example, we use online dating to meet our future soul mate. Organizations leverage web conferencing to hold virtual meetings across distributed teams. Families Skype or Facetime to narrow the miles between loved ones. We use Facebook and other social media to stay in touch with friends from our many lives, past and present. Once a completely manual process, we now sign electronic documents to buy our dream house. However, each of these has a physical or human element attached.
We do respond to digital signals, but it can’t replace human emotional response. We still need physical, human connection. A digital handshake does not provide the same confidence as a physical handshake.
The two must coexist, so we are able to leverage the latest technologies and, at the same time, address our fundamental human need of connection.
The lesson is that neither digital or physical should be used alone. Leverage technology to drive speed, agility, and digital leadership. And use that innovation to enable you to spend more time focusing on people relationships.
Because that is truly transformative.
Originally published here.