Unlocking success in
digital
transformations
PART II
Having the right, digital-savvy leaders in place
Change takes place at
all levels during a digital transformation, especially when it comes to talent
and capabilities. Nearly 70 percent of all respondents say their organizations’
top teams changed during the transformation—most commonly when new leaders
familiar with digital technologies joined the management team.
Indeed, adding such a
leader is one of the keys to transformation success. So is the engagement of
transformation-specific roles—namely, leaders of individual initiatives and
leaders of the program-management or transformation office who are dedicated
full time to the change effort. Another key to success is leadership commitment.
When people in key roles (both the senior leaders of the organization and those
in transformation-specific roles) are more involved in a digital transformation
than they were in past change efforts, a transformation’s success is more
likely.
Other results indicate
that when companies achieve transformation success, they are more likely to
have certain digital-savvy leaders in place. Less than one-third of all
respondents say their organizations have engaged a chief digital officer (CDO)
to support their transformations. But those that do are 1.6 times more likely
than others to report a successful digital transformation.
Building capabilities for the workforce of the future
The survey results
confirm that developing talent and skills throughout the organization—a fundamental action for traditional transformations—is one of the most important
factors for success in a digital change effort. Of our 21 keys to success,
three relate to the workforce’s digital capabilities. First is redefining
individuals’ roles and responsibilities so they align with a transformation’s
goals, which can help clarify the roles and capabilities the organization
needs. Respondents are 1.5 times more likely to report a successful digital
transformation when this practice is in place.
Two other keys relate
to engaging the specific roles of integrators and technology-innovation
managers, who bridge potential gaps between the traditional and digital parts
of the business. People in these roles help foster stronger internal
capabilities among colleagues. Integrators are employees who translate and
integrate new digital methods and processes into existing ways of working.
Because they typically have experience on the business side and also understand
the technical aspects and business potential of digital technologies,
integrators are well equipped to connect the traditional and digital parts of
the business. For their part, technology-innovation managers possess
specialized technical skills and lead work on a company’s digital innovations.
Beyond these three keys
for success, we found that companies with winning transformations have a better-funded and more robust approach to
talent than others do. Transformation success is more than three times likelier
when respondents say their organizations have invested the right amount
in digital talent.
Success is also more
likely when organizations scale up their workforce planning and talent
development. For example, 27 percent of respondents report successful
transformations when their companies set cross-functional or enterprise-wide
hiring goals based on specific skill needs—nearly twice the share of
respondents whose organizations do not.
During recruitment,
using a wider range of approaches also supports success. Traditional recruiting
tactics, such as public job postings and referrals from current employees, do
not have a clear effect on success, but newer or more uncommon methods do.
Success is at least twice as likely at organizations that run innovative recruiting campaigns (such as having recruits play games or find hidden
messages in source code as part of the recruiting process) or host technology
conferences or “hackathons.”
Empowering people to work in new ways
Digital transformations
require cultural and behavioral changes such as calculated risk taking,
increased collaboration, and customer centricity, as our previous research has shown. In this survey, the results suggest two primary ways
in which companies with successful transformations are empowering employees to
embrace these changes.
The first is
reinforcing new behaviors and ways of working through formal mechanisms, long
proved as an action that supports organizational change. One related key to
transformation success is establishing practices related to working in new
ways. Respondents who say their organizations established at least one new way
of working, such as continuous learning or open work environments, as part of
their change efforts are more likely than others to report successful
transformations. Another key is giving employees a say on where digitization
could and should be adopted. When employees generate their own ideas about where
digitization might support the business, respondents are 1.4 times more likely
to report success.
A second approach to
empowering workers is ensuring that people in key roles play parts in
reinforcing change. Success depends on both senior leaders and those engaged
during the transformation. One related factor is encouraging employees to
challenge old ways of working. Respondents who say their senior leaders and the
people engaged in transformation-specific roles do this are more likely than
their peers to report success (1.5 times more for senior leaders and 1.7 times
more for those in key transformation roles). Another factor for success relates
to risk taking. Success is more likely when senior leaders and leaders who are
engaged in the transformation all encourage employees to experiment with new
ideas—for example, through rapid prototyping and allowing employees to learn
from their failures. A third key to success is people in key roles ensuring
that their own units are collaborating with others when working on
transformations. When respondents say their senior leaders and those in
transformation-related roles have done so, they are 1.6 and 1.8 times,
respectively, more likely than others to report success.
Giving day-to-day tools a digital upgrade
For organizations to
empower employees to work in new ways, the survey findings show how, and by how
much, digitizing tools and processes can support success. We asked respondents
about seven structural changes their organizations had made since the
transformations began. Three of these changes—each of which involves making the
use of digital tools a new organizational norm—emerged as keys to success.
The first key is
adopting digital tools to make information more accessible across the
organization, which more than doubles the likelihood of a successful
transformation. The second is implementing digital self-serve technologies for
employees, business partners, or both groups to use; transformation success is
twice as likely when organizations do so. A third key, focused on technology in
company operations, is organizations modifying their standard operating
procedures to include new technologies. Beyond these factors, an increase in
data-based decision making and in the visible use of interactive tools can also
more than double the likelihood of a transformation’s success.
Communicating frequently via traditional and digital
methods
As we have seen in
traditional change efforts, clear communication is critical during a digital
transformation. More specifically, one key to success is communicating a change story, which helps employees understand where the
organization is headed, why it is changing, and why the changes are important.
At organizations that follow this practice, a successful transformation is more
than three times more likely. A second key is senior leaders fostering a sense
of urgency for making the transformation’s changes within their units, a
practice where good communication is central. Other results suggest that when
communicating change stories, successful organizations tend to relay a richer
story than others do. The elements with the greatest influence on success are clear
targets for organizations’ key performance indicators and clear communication of
the transformation’s timeline.
We also found that
using remote and digital communications to convey the transformation’s vision
does a much better job of supporting success than in-person or traditional
channels. When senior managers and initiative leaders use new digital channels
to reach employees remotely, the rate of success is three times greater.
Looking ahead
While respondents say
that many digital transformations fall short in improving performance and
equipping companies to sustain changes, lessons can be learned from those who
report success. The survey results suggest steps companies can take to increase
their chances of success during a transformation:
·
Reimagine
your workplace. The results show
that success requires both digital-savvy leaders and a workforce with the
capabilities to make a digital transformation’s changes happen, which other
McKinsey research also confirms. The workforce implications of digitization,
automation, and other technological trends are significant, and companies will
need to invest in and hire for radically different skills and capabilities.
Whether or not an organization has already begun a digital transformation, it
is important for all companies to think critically about the ways in which
digitization could affect their businesses, in the near and longer term, and
the skills they will need to keep up. One critical step is for organizations to
develop clear workforce strategies to help determine the digital skills and
capabilities that they currently have—and will need—to meet their future goals.
·
Upgrade
the organization’s “hard wiring.” As digital requires new ways of working as well as
changes to the organization’s overall culture, employees must be empowered to
work differently and keep up with the faster pace of business. The
implementation of digital tools and upgrading of processes, along with the
development of a nimbler operating model—that is, the hard wiring of the
organization—will support these changes. Of course, leaders have important
roles to play, too, by letting go of old practices (command-and-control
supervision, for example). Since not all leaders will have the experience to
support or enact such changes, dedicated leadership-development programs could
help leaders and employees alike to make the necessary shifts in mind-sets and
behaviors.
·
Change
the ways you communicate. Good communication has
always been a key success factor in traditional change efforts, and it is just
as important in a digital transformation. In a digital context, companies must
get more creative in the channels they are using to enable the new, quicker
ways of working and the speedier mind-set and behavior changes that a digital
transformation requires. One change is to move away from traditional channels
that support only one-way communication (company-wide emails, for example) and
toward more interactive platforms (such as internal social media) that enable
open dialogues across the organization. Another key to better communication is
developing more concise—and even tailored—messages for people in the
organization, rather than lengthier communications.
https://www.mckinsey.com/business-functions/organization/our-insights/unlocking-success-in-digital-transformations?cid=other-eml-alt-mip-mck-1811&hlkid=9a51c71cfe274507bcd9b95a215e3d2b&hctky=1627601&hdpid=6657bb5b-54ff-4819-bc7f-cb2029b2c8af
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