8 Pitfalls of Digital Transformation

Avoid these mistakes to prevent digital transformation failure

There's no doubt that Digital Transformation initiatives have been a major trend in 2016 which look set to continue into 2017. This chart from 2016 research by Smart Insights shows the popularity of digital transformation initiatives.

You can see that over one-quarter (30%) of businesses already have a transformation programme in place, with many businesses looking to launch their digital transformation programme imminently.

Yet shockingly, according to Forbes, 84% of digital transformations fail.  For each one of you reading this from an organization about to embark on the process, only one in eight of you will succeed. But perhaps the high failure rate is unavoidable. 86% of leaders think digital transformation is necessary within their organization yet only half feel that they fully understand it.

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In my experience through the work we do helping organizations with digital transformation, there are plenty of things you can do to make sure your organization excels in this area, rather than falling flat on its face. Below are the 8 things which I’ve seen go wrong and how you can prevent them.

1. Not facing your fears

Chances are that when something inevitably goes wrong during the project, it will have crossed someone’s mind as a red flag some time ago. Yet they probably felt too worried about looking stupid to share their concerns. My top tip: run a stand alone session on risk with key internal stakeholders before you start digital transformation. Have a frank exchange about all the things that could go wrong (also known as a ‘premortem). Get everyone to visualize themselves a year down the line, in a situation where the project has failed. This will get all the issues people are nervous about out in the open. Then you need to agree how you will anticipate and manage these risks. If you’re struggling to get this conversation started, you could use the points below as a checklist. I guarantee that everyone will leave the room feeling more confident and excited about digital transformation.

2. Not knowing what it is

 There are millions of article about digital transformation but not many definitions. Half of all business leaders are confused by it. And how can they lead it if they don’t know what it is? Here’s my definition: “Integrating digital across our organization to deliver our vision, create value, give our audience great experience and services and develop our competitive advantage.” Your organization could use this as a basis for creating a bespoke definition of digital transformation. Ultimately you need to develop this into a vision of where digital can take you, which demonstrates the benefits to your staff and, of course, your audience.

3. Not having a strategy

 If I had a pound for every time I’ve spoken to an organization who say that they have already started on digital transformation ‘because we’re getting a new website’ I would have a yacht. I have seen huge amounts of money- often hundreds of thousands- wasted where organizations embarked on the development of a fancy new site/CRM/other expensive tool, with no thought given to where they want to go and how they will get there. The result? Inevitably, the website/CRM goes massively over budget as, without a strategy, there is no way to hold the process to account. The whole project is pulled and the organisation is back to square one. So, get your strategy in place from the get go.

See these 10 simple reasons why you need a digital marketing strategy by consultant Dave Chaffey of Smart Insights.

4. Not putting your audience first

 Every good digital transformation starts with understanding what your audience wants. How are they using digital channels? Where are the gaps? Are their opportunities to reach new audience segments using digital? Creating personas and mapping out detailed user journeys will help you understand your organization from the perspective of the people who matter most.

5. Not having the right leadership

Someone needs to head up your digital transformation who has the right mandate for change and the influencing skills to make it happen. Things I’ve seen go wrong here include: the board and executive team outsourcing the transformation entirely to the digital team, when digital should be a significant part in any organizational strategy; a CDO or Head of Digital leading the transformation who is technically brilliant but lacks the soft skills to take people with them. And finally, leadership teams are not always sufficiently bold about where digital could take them. Which is because there is relatively little support out there to help leaders develop digital skills. So, get help and advice e.g. by talking to a peer who has been where you are, or hiring in some expertise.

6. Having the wrong people

See above. Who should be using digital in their jobs, outside of the digital team? Answer: probably a lot of people. Do you have the right people in the right roles to deliver digital transformation? Have you assessed their digital skills via an audit? Are managers able to support staff in making the transition? This conversation needs to happen at executive and board level.

7. Not investing in culture change

Imagine that your organization has flown through digital transformation and, a year from now, you’re a fly on the wall in your office. How are people behaving differently? How are they working together? What is their attitude like? That’s where you need to get to. As the saying goes, culture eats strategy for breakfast. Focus on this as much as developing a great digital strategy and set out practical steps for change and milestones. You’ll want to work closely with influential staff (who does everyone gravitate towards in the work kitchen?) and encourage them to champion digital.

8. Ineffective internal comms

Digital transformation will inevitably involve hardcore change management and taking people with you is essential. Your internal comms team need to work hard on campaigns to motivate people, celebrating success and cheering them on when going digital feels uncomfortable or difficult.

If you follow these tips, you’ll be on the path to digital transformation success. What other risks have you noticed in this area and how would you manage them?

Editor's note: To avoid some of these pitfalls of digital transformation Business-level Expert members can follow the advice in our Managing Change for Digital Transformation guide by consultant Mark Chapman.