Is digital transformation less about technology & more about mindset?

A recent study reveals that 73% of the companies failed to derive any business value from their digital-transformation efforts

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It was in 2011 that GE endeavoured to initiate a digital transformation effort. The Company started a new venture called GE Digital, in 2015, and poured in billions of dollars into the business. The goal was to become a digital power house leveraging technology and data. However, despite investing so much time and money on bringing in the best of technology and thousands of people, the stock price of the Company kept falling. The stakeholders were worried and eventually the then CEO had to step down. What was the real reason for the failure of GE’s digital transformation journey? It was concluded that by trying to bring about a huge change all at once, with such a big workforce, it was focussing on quantity and not quality.

A similar example is that of Ford Motors. In 2014, the Company tried a digital transformation journey by introducing Ford Smart Mobility. The aim was to build digitally-enabled cars and enhance mobility. Huge investments were made to establish the new venture, but quality issues started to emerge. The stock prices went down and in a couple of years the CEO had to resign. In this case, Ford Smart Mobility was a new venture, separate from Ford’s other businesses. The unit was created far from the headquarters and there was no integration or cohesion with the other businesses at all. There are many examples of such failures.

“In a digital transformation, the efficiency of technology comes first and then the mindset and acceptance part”

Jayant Kumar, joint president – HR, Adani Ports & SEZ

In both the above cases, significant amounts of money were poured into the digital transformation projects, and the best of technology was introduced, but still the whole exercise failed. Why?

A recent study has revealed that 73 per cent of the companies failed to show any business value from their digital-transformation efforts. Was it the technology itself that failed to deliver or did the companies ignore the mindset of the people?

Since digital transformation is a big change, even to the culture of the organisation, people need to be at the centre of it. There can be multiple reasons, but one of the main reasons was not making efforts to change the mindset of the people and failing to keep people at the centre of the whole drive.

Ford, for instance, failed to produce tangible results because there was no cohesion, despite so much money being invested in technology. The transformation was happening in an isolated manner. If the Company had attempted to integrate the culture of the new venture with the existing business and made people accept technology, keeping them at the heart of the transformation, the results would have been more positive.

“From smartphones to advanced applications, technology exists everywhere. We know that it is here to stay. One day people will have to accept it to sustain themselves”

Rani Desai, partner, Catalyst Executive Education Institute and HR leader

What does ‘keeping people at the heart’ mean? Anish Philip, CHRO, Marlabs, feels it is very important for technology to bring efficiency and increase the productivity of the people. However, he also points out that it is not just about bringing in technology, but also about making people see value in it. “If people fail to see what they gain from the introduction of digital applications in the business, the transformation may not be efficient. Technology should be instrumental in the growth of the people,” shares Philip.

Skilling people in the new technology is also very important. They should know how to leverage the technology in an efficient manner, otherwise the whole exercise will be futile. “Learning, skilling and reskilling makes people adopt the technology faster and start seeing value in it. The mindset starts to change and acceptance begins,” asserts Rani Desai, partner, Catalyst Executive Education Institute and HR leader.

Jayant Kumar, joint president – HR, Adani Ports & SEZ, points out how significant it is to lead the digital transformation from the top. The existing leaders should be the first to accept the technology and that acceptance then cascades down to their teams. “Leaders should act as cultural change agents, which makes the transformation as well as the integration into the culture faster,” says Kumar.

“A digital transformation which keeps people at its heart, has to be simple, easy to use, intuitive to enhance the UX, and more importantly, should increase the delivery speed. This helps in easier and quicker adoption of digital transformation”

Lalit Kar, SVP-HR, Reliance Digital

Does change in mindset and culture come first or does the technology need to prove its mettle first? Digital transformation is also about technology, which gives results and improves customer and employee experiences. Therefore, according to Kumar, technology should come first before one can attempt to change the mindset. After all, technology has to give tangible results to the business.

Lalit Kar, SVP-HR, Reliance Digital, agrees that in the digital transformation journey, technology plays a greater part in keeping people at the centre of the entire exercise. “For instance, a simple app for life cycle management — such as attendance, pay and benefits, leaves and holidays, and containing all employee policies and so on — empowers employees with self-service, clarity and convenience. Similarly, a digital transformation which keeps people at its heart, has to be simple, easy to use, intuitive to enhance the UX, and more importantly, should increase the delivery speed. This helps in easier and quicker adoption of digital transformation,” explains Kar.

“Technology should be instrumental in the growth of the people”

Anish Philip, CHRO, Marlabs

For Desai, on the other hand, skilling people and changing their mindset is more important, because technology is anyway evolving. It has already become a part of our day-to-day life and we are left with no option but to leverage it. “From smartphones to advanced applications, technology exists everywhere. We know that it is here to stay. One day people will have to accept it to sustain themselves,” believes Desai.

Clearly, keeping people at the centre of digital transformation and changing their mindset is important. At the same time, technology should also prove its value — not just to the business, but also to the people.

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