Digital Transformation and the integration of emerging technologies into the business is usually at the top of many a CEO’s and CIO’s agenda. You can’t swing a dead cat without finding a survey that supports this belief. Not that it’s at all surprising. The digitization of the business enables us to be more efficient, respond more rapidly to customer requests or market changes, and have better visibility into company operations. All great stuff.
And while moving from paper-based—or even Excel-based—processes to real-time, cloud-connected systems moves us forward, new capabilities like mobile, IoT, machine learning and AR/MR/VR only serve to extend, enhance and accelerate these advantages.
Yet every year we hear more stories about large DT initiatives that go way over-budget or fail outright. Now, I’m not saying these failures can’t be caused by bad technology choices or bad implementation partners, but these are not usually the primary contributing factor. So, what is the more likely culprit?
Inertia. Culture. Muscle Memory. Pick your favorite term for: “because we’ve always done it that way.”
McKinsey’s Karel Dorner and David Edelman assert that, “Being digital requires being open to reexamining your entire way of doing business…” I’ve often said mobile (and by extension DT project and other emerging technologies) is the greatest opportunity for business process re-engineering that can drive efficiency. For me, the opportunity to help redefine how things work, how to do things better, how to make life easier for people is a lot of fun and very energizing. However, it turns out that not everyone feels the same way. A whole bunch of folks in your company don’t want to change how things are done—for many reasons.
Some are incented to maintain status quo because it keeps customers happy, even though it may be bad for the company’s overall health.
- Example: Large franchise organization that had historically taken a laissez-faire attitude towards how their franchisees operate their own businesses. Taken to an extreme, they have evolved their systems to support dozens of different and unique business processes, even through each franchise had essentially the same operational goals and tools. Some franchises found a new way of doing things. Consequently, someone at corporate had to write code to add a new “feature” to support each new business process. Now, they’re not supporting the systems, so no skin off their nose. And the IT team gets to say “Yay, more technical debt!”
Others don’t want to change because they feel they’re experts in the current way and that if things change, not only will they have to learn something new, but they lose any perceived advantages they think they have over newer employees. Similarly, older employees (who are already concerned about being tossed for younger, cheaper employees) are now convinced this is happening, the new system is accelerating this shift, and they are doomed. These are not happy people.
- Example: Travel Agents in the early 2000s. It may be hard to remember, but there was a time before the Internet. No Expedia, no Priceline, no Kayak. You wanted to fly somewhere, you booked through a travel agent. The systems they’ve been using for 30+ years run on monochromatic screens and the agents know every keyboard shortcut in the book, every hack to get the best fares. And they get a reasonable commission.Enter the Internet. Enter the shift to ancillary fees. Enter personalization and offer management. The large travel technology platform players (e.g. Sabre, Travelport, Amadeus, and the like) start to rewrite legacy agency platforms and adopt newer UI and behavior patterns as part of a large modernization strategy. Understandably, a lot of the legacy travel agents weren’t so bullish on the move.
There’s another group that thinks everything is working fine today and there’s no reason to change. Common refrains: “We became a $20B company doing it this way!” “If it ain’t broke, don’t fix it.”
- Example: Phil Jackson as the Knicks GM, versus Daryl Morey of the Rockets (if you don’t get the reference go to next years’ MIT Sloan Sports Analytics conference or read/watch Michael Lewis’ Moneyball).
At one time or another in your career you’ve met these people, worked with these people, been on project teams with them. They’re really nice people, smart people, great-to-have-a-beer-with people. But in ways large and small they undermine the progress the organization is trying to make.
So, what can we do, not just to get these groups on board with coming changes, but also so we may benefit from their insight?
Here are 5 steps I’ve found useful:
Communicate the Vision
Explain the reasons why you’re undertaking the new initiative. Highlight the real business problems you’re trying to address. What are the goals you want to achieve? Where you can, be specific in terms of the benefits—financial, customer acquisition, and other metrics—that are meaningful to your company. Where you can, provide anecdotes of how this will make roles/activities easier. Sometimes showing how benefits accrue to digital leaders over digital laggards also provides some clarity. Nobody wants to be the next Sears and get crushed by the next Amazon.
If in the process, we’re removing some employee flexibility to do things their own way or to do things the way they’ve grown accustomed to, explain why and how the improvements will be better for them in the long run. Listen. A lot of ERP implementations go wrong or go over-budget, not because of problems with the platform or that you chose NetSuite over SAP or Dynamics, but because customizations end up costing a whole lot more than you thought and lack of enforcement of a repeatable process fails to extend the benefits across the enterprise.
If there are new skills required or reductions in force as a result of the coming changes, don’t run from them. Be honest and, where possible, talk about what the company is going to do to retrain/reskill those employees to keep them in the fold.
But for the love of God, don’t communicate this as being an IT project. The execution, of course, is led by IT, but we’re not moving forward with this because the IT team is bored or because they found a shiny new object they want to play with. This is about transforming and enhancing the business first and foremost (and if it’s not, you’ve made a huge mistake and should stop right now).
Listen to your Employees
I don’t care how good the presentation I suggested moments ago was, there are going to be people who walk out of the room, nervous and afraid. Make sure there are feedback/listening mechanisms in place and that you address any concerns raised via persistent communication. For every one person you hear from, there are likely many more of a silent majority who feel the same.
At Anexinet, we’ve been involved in countless digital transformation projects. One of the most effective things we do is to involve key stakeholders in the design process. Don’t just engage people at “Corporate,” and Managers in the process. Involve those in the trenches who are doing the work: route drivers, service tech, distribution partners, salespeople. Give them a voice in the way forward.
One special technique we use is our Day-in-the-Life (DiTL) process, where we shadow the technician or salesperson as they service their customers on a route, the engineer at the oil pipeline, the guy at the warehouse receiving and shipping orders. Ask them what problems they have. See what they do. Notice where it deviates from SOP. Wherever logical, and possible, look for life-hacks they perform to make their jobs more efficient, and integrate them into the go-forward design.
Build a Prototype and Elicit Feedback
There’s huge benefit to creating prototypes or proof of concepts before committing to a 7-figure project. Ensuring technical feasibility and correctly designing the user journey are critical to success. Even simple UI prototypes can be incredibly instructive by providing a great feedback mechanism to not only make sure we got it right, but also to show people their voices were heard during the DiTL process and early design discussions. This round of feedback lets us refine our design. Also, (but don’t tell them) the folks you include will become evangelists for the new initiative with their peers, which will also support smooth adoption.
Publicize the Results
This is where the rubber meets the road. The communication never ends. Show them how key metrics have improved. On the eve of the larger rollout, use the results gleaned from Pilot users to build confidence and excitement (versus fear and dread). Here’s a few examples from projects I’ve been a part of at Anexinet:
- Reduction of the time required to perform a physical inventory of a single distributor warehouse from 1 hour 45 minutes to just 35.
- Enabling a route service driver to add two more stops to their daily route, increasing the ability to increase service quality and capacity to serve more new customers, without expanding the workforce.
- Reduce monthly inventory shrinkage by more than $100,000 per month through better tracking and visibility throughout the supply chain.
- Shortening the customer deal cycle from weeks to hours by giving the salespeople mobile tools to accurately quote and negotiate sales.
Multiply these individual gains by dozens of warehouses or thousands of field service personnel and customers, and all of sudden you’re talking about real money.
OK, stop reading now, and start building the business case for your Digital Transformation strategies—and then adapt my suggestions about heading-off organizational culture before they stall your DT project. Remember, the phrase “Culture eats Strategy for breakfast” isn’t a tired old trope. And if your organization is struggling with digital transformation, or hasn’t begun the process because you’re unsure how to begin, please reach out to us. Anexinet’s proven Kickstart process has helped countless organizations across all industry verticals define and execute successful digital strategies. We’d love to help you get started.