When it comes to embarking on a digital strategy, many organizations focus on external factors, such as the customer experience and new revenue streams. Internal change, however, is just as crucial for digital success, including re-skilling the workforce, changing employee behavior, updating the corporate culture and restructuring how work gets done.
In fact, traditional organizational mindsets and hierarchies tend to gum up the digital works, particularly as faster-moving and quicker-learning digital upstarts gain mind and market share. As Klaus Schwab at the World Economic Forum explains, “In the future, it will not be the big fish that eats the small fish, it will be the fast fish that eats the slow fish.”
We define digital as “innovation to connect technology, data science, devices, design and strategy to change a business process or customer experience.” But while this may come naturally to digital-native businesses, it is more difficult for long-established organizations to transform. For these companies, the need for change, the capability to change and the vision of a better future must outweigh the emotional, personal and financial cost of the change. This is where digital change management comes in.
Elements of Successful Change Management
Leveraging our primary research and our own experience across industries, here’s what we’ve learned about what it takes to successfully shift toward digital.
Five Ways Forward
If organizations have not yet started to understand and embrace digital in a way that meets their needs and strategies, they may already be on the path to irrelevancy. Depending on your company’s level of digital maturity, we recommend the following actions:
Form a digital council, led by one or more collaborative senior leaders, to define, sponsor and implement the digital opportunity and build an innovation practice. The initial operating budget for innovation and digital transformation initiatives should be set at no less than 1% to 2% of revenue.
Develop a clear digital change vision. Assess both digital capabilities and change maturity, and define a roadmap to achieving the vision. Leverage the latest organizational change management methodologies that recognize the need for business agility, such as Kotter International’s Accelerate or our own OCM framework, supplemented with the latest digital tools to implement and sustain lasting change.
Use Agile methods, which will speed benefits and compound support for digital efforts.
Foster digital talent both from within and outside the organization. Incentivize the growth of digital skills, set clear digital goals, and appraise, recognize and reward stakeholders who demonstrate their commitment.
Build a digital culture, including open and transparent communications from top leadership levels. Leaders should leverage company-wide collaboration platforms and e-learning techniques to encourage wider engagement.
While change may be difficult to achieve, building a digital sense of urgency is increasingly easy to accomplish. As former GE chairman Jack Welch has said, “When the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight.”
To learn more, please read “Organizational Change Management: A Make or Break Capability for Digital Success," or visit our Cognizant Business Consulting Change Management Practice.