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Lack of Digital Awareness: The Reason Why Organizations Fail

Lack of Digital Awareness: The Reason Why Organizations Fail

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Summary: Despite understanding the importance of technology for their organizations, leaders fail to adapt to the digital world. What does being digital in the modern era mean? What should organizations avoid when preparing for digital transformation? Is digital transformation just about technology, or is it driven by the people or organizational culture? Let us dive in to explore more!


“90% of CEOs believe the digital economy will impact their industry, but less than 15% are executing on a digital strategy.” — MIT Sloan and Capgemini

 70 % of digital transformations fall short of expectations, says Mckinsey. 

 The reason for the above statistics is that most organizations think they can sign up for updated tech, put it into effect, and benefit from it instantly. But that’s unrealistic. Numerous statistics regarding digital transformation adoption state that the actual transformation occurs when leaders stir things up, reconsider their processes, and think beyond the tools.

 According to a survey by Wipro Digital, “over one-third of executives believe lack of a clear transformation strategy is a major obstruction to achieving its full digital potential.”

 Digital Transformation has become one of the fuzziest words and has lost its meaning. Organizations, these days, are in a rat race to embrace digital without having a solid understanding of what it looks like.

While there are innumerable reasons why digital transformation efforts become futile, the absence of a cultural transformation takes the lead. An organization’s culture is all about having the right people who are ready to embrace change, upskill and lean on the digital wave. If businesses have no clue on how to build a winning and open-minded culture, their digital transformation initiatives have fewer chances of success. 

Why Should Organizations Care About Digital Culture?

“The biggest part of our digital transformation is changing the way we think.”

– Simeon Preston, Bupa

According to a survey by Capgemini (2017),  6 out of 10 respondents in a survey cited culture as the main obstacle to digital transformation. 

A lot of organizations miss the point when establishing the right digital culture either because of inherent differences or the lack of opportunities for employees to push themselves and be rewarded for their efforts. 

To address the same, leaders should create measures that facilitate the adoption of digital practices while influencing their employees to become digitally savvy. 

Leaders, via their ethics and conduct, must set the right tone for the success of digital transformation. They should formulate a strategic vision for digital transformation which can further be cascaded into specific actions for other employees.

To ensure the success of digital transformation, leaders need to get all stakeholders on the same page (speak the common language), communicate the strategic value, persuade the importance of digital and convince them about its positive effect on business growth. For that to happen, leaders will have to place culture at the center of digital transformation and lead the initiative. 

Digital Transformation: How Failure to Change Impacts Organizations?

1. Inability to Exceed Customer’s Expectations

Investing in digital means investing in customers. Nearly every digital transformation initiative revolves around customer experience. Customers look for quick, responsive, and interactive solutions from brands they buy from / do business with. To succeed, organizations must exceed those expectations. 

Instead of counting on media, devices, and apps to drive digital transformation, insights should be taken from the customer. When the consumer’s expectations are met, customer loyalty inevitably drives digital innovation and adoption. 

If an organization strives to be fully consumer-focused at all levels, making the shift to a digital world happens naturally- impacting every touchpoint positively.

 

 2. Inappropriate Business Models

As technology continues to disrupt businesses, organizations need to be more agile. They must think like a technology company to transform their business digitally – a strategy that worked for DBS – the world’s leading digital bank!

DBS bank which ‘operates as a technology company’ has been transforming since as early as 2014, when it decided to upgrade its core banking system. But things didn’t turn out the way they were expected to. After a crushing failure, DBS sought inspiration from tech firms to transform digital assets into its advantage. 

They learned from giants in the industry like Amazon, Google, Apple, Netflix, LinkedIn, and Facebook. They revamped the organization to have a change-driven mindset. They created experiential learning platforms, redefined working, designed new offices, and motivated their employees to embrace innovation and experimentation.

The transformation they have undertaken is not just in terms of infrastructure but mindset, processes, analytics, quick decision making, and agility among other things. 

A key factor in the success of DBS was their motto – “technology is business and business is technology.” This led to creating platforms that brought people and technology together via shared strategy, objectives, and measures. This approach also contributed to the bank’s successful cultural transformation. 

To stay ahead and succeed, businesses must embrace emerging technologies, remain agile to adopt evolving business models, and above all, put customers at the center of every strategy.

3. Fixed Mindsets and Employees’ Aversion to Change 

Are employees eager to change their mindsets for successful digital transformation? Are they motivated to transform? 

70% of digital transformations fall short, mostly due to resistance from employees, reports Mckinsey!

While people are naturally resistant to change, it’s the responsibility of leaders to step up and spearhead bringing about a mindset change. Changes to an organization’s culture often start from the top. If leaders wish to empower their teams, they will have to first lead the charge in these digital initiatives. Leaders have no choice but set the tone and model those behaviors they would like to see their employees exhibit. 

It is good to have infra, tech, and IT but the bulk of effort goes around bringing awareness towards change. Leaders shall define what digital transformation is and what it isn’t. Secondly, they must ensure that every employee understands the outcomes of these digital transformation initiatives, both from the organization and individual standpoint. This will enable teams to further implement the change.

Digitization has as much to do with people as with technology. If leaders make big investments in tech without considering how it will scale the culture and processes, their digital transformation efforts are sure to go down. Rather, the focus should be given to cultural transformation because that’s what makes a world of difference. 

4. Rigid Leadership

To meet the ever-changing demands of unpredictably skeptical scenarios, senior management will have to brush aside the command-and-control style and move to collaborative, agile, and empowering leadership.

The new-age talent now expects leaders to be flexible, supportive, and rewarding. 

Leadership involvement at an emotional, existential and intellectual level is the holy grail to run a massive initiative. Instead of leveraging a top-down approach, leaders must allow their teams to try, attempt mistakes, and innovate. Successful digital transformation leaders focus on the customers and people as the objective. They know how to use technology to better serve customers and make crucial decisions. While emerging technologies are crucial, it’s equally important for leaders to ensure the trends translate to the culture and people of the organization. 

Leaders should be willing to listen, understand, and focus on solutions rather than problems. They must look beyond the traditional rules and continuously keep up to bring in the latest innovation. With a clear vision, successful leaders can inspire their teams and drive the entire organization towards collaboration. 

5. Inadequate Skills

“76% of Gen Z learners believe that learning is the key to progressing”- LinkedIn Learning Report 2021

The way we work is constantly changing. To survive in the digital-first era, organizations should ensure that their employees have the required skills to forge on. 

When it comes to upskilling, just theoretical knowledge isn’t sufficient. Organizations must look for experiential learning programs that are applicable in the real world. At KNOLSKAPE, we help organizations and their people become future-ready via experiential learning. 

In unsettled times like these, technology alone won’t help organizations bridge the gap. To realize the true potential of digitization, leaders must upskill the workforce across functions, and make their jobs easier. 

By helping organizations and their people hone soft skills like Design Thinking, Decision Making, Leading Teams, Emotional Intelligence, Unconscious Bias, and Business Acumen, we equip learners with the skills they need to do the jobs they have now. 

In a collaborative work setting, it has become more important than ever to automate processes, open the lines of communication and break down silos. Thus, CEOs must double down on these efforts and understand that reskilling not only makes careers durable but also helps them retain top talent while future-proofing their organizations. 

6. Failure to Invest in Digitized Workflows

By adding digitized workflows to their processes, businesses probably blot out uncertainties or surprises. In a virtual setup, the need for in-person interaction has gone down. That is where digitized workflows take a seat and allow businesses to streamline customer-facing processes, address any possible setbacks, be more efficient, and get rid of silos. 

With digital workflow management, businesses save processing time, and extra costs and cast out human errors. Additionally, digital workflows also inculcate a culture of accountability, collaboration, and autonomy among employees .

Aside from speed and quality, a digitized workflow also brings clarity because every phase is being documented. Unlike cumbersome, paper-driven processes, digital workflows allow leaders to sustain and quickly scale digital transformation of daily operations.

 
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Digital Isn’t a Thing to Achieve but an Era to Live!

“Change is the law of life and those who look only to the past or present are certain to miss the future.” — John F. Kennedy

The COVID-19 pandemic gave businesses a wake-up call to speed up their digital transformation exercise. It urged them to move along an agile path. Many, if not all organizations, have digitized at least a part of their operations to serve customers and safeguard employees. And this will continue to evolve even when the crisis ends. 

Hence, it is time for organizations to review and reinvent their change management – contributing to the culture, people, competencies, improved customer experience, and mindsets. 

The way different organizations define digital transformation may vary, but ultimately what matters is how it is integrated with their team culture, strategic needs, and business value. Similarly, how a business approaches its skill acquisition is important too. Organizations that understand that digital transformation is a journey with a strategic vision and long-term commitment will be the ones that come out on top.

 

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About KNOLSKAPE

KNOLSKAPE is a global leader in experiential learning with a mission to help organizations and employees become future ready. Using a large award-winning portfolio of simulations aligned with 100+ competencies and cutting-edge talent intelligence, KNOLSKAPE produces stellar outcomes for more than 375+ organizations across 75 countries. Driven by research and thought leadership, KNOLSKAPE offers its products and solutions in a flexible subscription model powered by omni-channel delivery.

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