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Digital Transformation is not about technology

70 percent of all digital transformation projects do not reach their goals.

Recent research by McKinsey and Company, shows that 70 percent of all digital transformation projects do not reach their goals. Highly concerning of course. The good news is that the researchers know why.

The fundamental difference between successful projects and projects that fail, is the mindset and the health of the organization. A digitalization project will never solve organizational challenges. Instead, flaws and challenges are magnified. When goals are unclear or when the motivation is missing (often due to fear) no organization can execute a strategic plan.

Back to the fundamentals

Successful companies have a culture that just keeps moving all the time. In “Digital Transformation Is Not About Technology” by Behnam Tabrizi, Ed Lam, Kirk Girard, and Vernon Irvin, the authors list five key lessons that help organization through digital transformation.

They say that digital transformation works when leaders go back to the fundamentals. Let me share a quote from the article that in my mind summaries their insights in what successful leaders do. They “… focus on changing the mindset of its members as well as the organizational culture and processes before they decide what digital tools to use and how to use them.”

"Digital transformation works when leaders go back to the fundamentals"

Five lessons that will lead your organization through digital transformation

Lesson 1: The digital transformation is guided by the broader business strategy. Do not start the journey with a specific technology or tool in mind.
Lesson 2: Rely on insiders and their intimate knowledge about what works and what doesn’t in their daily operations.
Lesson 3: Design customer experience from the outside in, i.e. be based on in-depth input from real customers. Customer experience design cannot be based on hypotheses.
Lesson 4: Recognize employees’ fear of being replaced as they may consciously or unconsciously resist the changes
Lesson 5: Change how decisions are made. Decisions must be made quickly in a flat organization. Prototyping is essential. No one can know anything for sure, and we need to test our ideas.

Strategy before technology

The Nordic Market Intelligence company Radar Ecosystem Specialists has recently published insights that basically say the same thing as the McKinsey research. Nordic customers understand that digital transformation is important. They got it. What is more challenging is the execution; companies lack competence, budget, culture, and organization.

For all of us working in the IT industry helping customers reach their objectives through digitalization, this is important research. Our only desire is that what we supply in terms of technology and tools, are translated into true value that supports the overall business strategy for our customers.

We need to demand from ourselves that what we do is aligned with the strategic plans, that product or solutions benefits are translated into value propositions, and that strategy comes before technology.