Side-stepping the three reasons most companies fail to transform digitally
J. Stewart Black
Dr. Black is Professor of Management Practice in Global Leadership and Strategy at INSEAD and the programme director of the Leading Change in an Age of Digital Transformation programme. He specializes in leadership, strategy, change, globalization, and stakeholder engagement. He is the author or co-author of over 100 articles and cases.
"The possibilities are exciting. At the same time, the pace is such that those who lag are likely to find themselves not only falling behind and finishing last, but cut out of the race all together. "
As the programme director for Leading Change in an Age of Digital Transformation, could you share what business problem this programme seeks to address?
We will be looking at the specific change management challenges that come with digital transformation and what business leaders can do to overcome them.
We know that digital transformation is hard for organisations. For a start there’s getting people to see and understand the need. Most employees grasp the need to do something to stay ahead and leverage digital change. The issue is that many don’t see why this should impact them directly in terms of their job or work.
Secondly, even when employees do understand the need, they can still be afraid of making the change. They might not think they have the skills or the capabilities or resources to step up and transform. And where this is the case, they will usually pay digital transformation lip service, but they won’t support it or help make it happen in a truly meaningful sense.
And then thirdly, even when people see the need and believe that change is possible, they will not instantly be good at the new behaviors or activities. This low initial proficiency usually leads to poor results, and poor results can cause them to revert to their old behaviors that they have mastered and that traditionally brought about great results. As a consequence, it is critical to monitor early efforts and reinforce the correct attempts, even if the initial low proficiency doesn’t yet yield the desired results. Otherwise, the digital transformation might get off the launchpad but it won’t reach the required “escape velocity” and come crashing back to earth.
These are the three main challenges that organisations face when they are looking to drive digital transformation. And they are the main reasons so many organisations fail.
How does the new programme help leaders overcome these hurdles and what are the key learning objectives?
The programme is aimed at key decision-makers and those charged with leading digital change in their organisations.
While we use outside case studies of both failure and success, we primarily have each participant use their own digital transformation (or a particular piece of it) as a live case to which they apply our analytic framework and tools during the programme. It’s a very hands-on learning experience in this sense, with tailored, actionable takeaways for the participants and their companies.
So your participants get to apply the learning to their own organisations directly?
Yes. We examine the experience of other companies to highlight the common errors and key to successful digital transformation, and to understand the principles and forces behind both success and failure. These external cases become mirrors for participants to use to look at themselves and their companies. Within the overarching framework, participant apply two sets of tools: diagnostic and planning. In small groups we leverage the “eyes” of peers to help participants be more objective and rigorous in their assessments of their own firm. We leverage this peer coaching during the action planning phase as well. The goal is for participants to leave with both a solid analysis and action plan.
INSEAD has a tradition of integrating thought leadership with action-oriented learning to drive outcomes. Do you believe this new programme is uniquely posed to address these new business challenges?
I do. INSEAD has always had a direct connection to the world of practice and has long focused on relevant research. I have been studying organisational transformations for 30 years and have written a book on it that is now in its third edition. Digital transformation is the latest in a series of organisational transformations. This long experience provides a vantage point for seeing what is core to any organisational transformation and what is unique to digital transformations.
How has COVID-19 impacted digital transformation?
Coming into the Coronavirus Crisis, most firms knew that they needed to transform their business and dramatically upgrade their digital capabilities. The crisis has shined a bright spotlight on this need.
Looking beyond COVID-19, the digital transformation space has the potential to massively increase the efficiency and effectiveness of business operations in general. AI and computing power give you the possibility of discovering in real time the changes or adjustments you need to make to drive efficiencies. The additions to your margins and yield can be monumental.
Digital transformations also have the ability to deliver insights into customers’ experience in a way that simply was not cost-effective or even possible in the past. These new insights can drive huge leaps forward in quality – not to mention innovation. We’re looking at businesses being able to offer experiences to their customers that they might not have known they wanted before having them.
The possibilities are exciting. At the same time, the pace is such that those who lag are likely to find themselves not only falling behind and finishing last, but cut out of the race all together.
Quite simply, it’s never been more important or exciting to stay ahead of the game.