When it comes to delivering effective digital transformations, human behaviour is often overlooked in favour of a focus on technology. Based on our experience and research, we outline how organizations can truly engage their people by understanding their behaviors, and consequently, ensure that they undergo successful digital change.
Back in the early 1990s, William Gibson, the science fiction writer, author of Neuromancer and originator of the term “cyberspace”, stated that “the future is already here – it’s just not evenly distributed”. This predates the widespread consumer adoption of the internet, the cloud, much of machine learning and the rise of the FANG companies (Facebook, Amazon, Netflix and Google). Gibson neatly summarizes the reality of innovation, which, like evolution itself, can operate at different speeds within different environments and in response to different stimuli. The “unevenness” of the future creates the possibility for all but the trailblazers and inventors to observe what has already been tried and tested in an alternative domain, and to learn lessons from the leading edge.
Unfortunately, this learning opportunity is all too often ignored. Time and again we see examples of organizations applying approaches and technologies that have already been superseded or discredited by true digital leaders, with all-too-predictable consequences. In the post-mortems carried out on these failed, or at best sub-optimal initiatives, the focus tends to be on failures within the technology domain. However, we believe that this is often a lazy hypothesis.
A significant proportion of failures to realize the anticipated value from digital transformations can be directly traced to failure to appreciate and address human behavior associated with the transformation. Arthur D. Little believes that when driving digital transformation, human behavior should be paid at least as much attention as the technology itself.
Why does digital transformation fail?
Digital is now proving to be genuinely transformative – even within companies that were originally skeptical. For example, roughly two-thirds of industrial companies are now discovering the untapped potential of digital innovation, with approximately the same number stating that they believe it will have a bigger impact than traditional innovation (Source: Arthur D. Little Global Innovation survey).
However, genuinely transformational change is hard. Recent studies show that 84 percent of digital transformation initiatives fail , often despite the rigorous application of “best practice”. Assuming the right digital technology has been identified, which can successfully create the potential for transformation (see “The, human-to-technology,3 language challenge”), there are still significant hurdles to overcome, including:
1. Inadequate attention to human behavior
The last 20 years have seen the identification and explanation of a wide range of insight into human behaviour, and especially our “predictably irrational” reactions to external factors. Unfortunately, much of this insight has not yet become common practice when businesses undertake transformation, with people often still perceived as ultrarational, calculating “machines”. Some common oversights include:
- Inadequate attention being given to the people directly affected by the change and their psychological journeys.
- Underlying organizational challenges that lead to the proposed change not being sufficiently communicated or understood, so people fail to understand the damaging consequences of protecting the status quo.
- Resistance to change for individual and often deeply personal reasons – for example, the change may impact processes and ways of working that have delivered them successful careers (i.e., it impacts their professional “defensible turf”).
- People not being adequately or effectively supported during the transition as they give up the old ways and adopt new ways of working. In fact, the need to “stop doing something old to start doing something new” is still often overlooked, despite Voltaire’s perceptive observations over 250 years ago.