With a failure rate as high as 95% digital transformation is not for the faint hearted. Maybe it's time to turn to the Run teams.

Digital Doldrums

If your organisation is struggling through a digital transformation, you’re not alone. Bain and McKinsey research puts the failure rate of digital transformation at between 95% and 84% respectively. The diagnosis and solutions proffered by many commentators focus on a lack of common understanding among executives, prioritisation, alignment, war for digital talent and expectation setting. All valid points no doubt.

For a large, mature organisation encumbered by legacy technology and a proliferation of processes, the issue seems obvious to me. Unless your digital strategy is one of cannibalisation i.e. build ‘greenfield’ and then assume customers will self-select and self-migrate, the transformation team must understand the current landscape. But with all the hype and the jargon floating around, organisations are filling the transformation team with external hires including:

  • Scrum masters
  • Agile coaches
  • Data scientists
  • Human centred design specialists and
  • Robotics and AI developers.

I don’t doubt that these are critical skills for a digital transformation and are skills that have been well leveraged by the digital giants. The issue is that the new hires know nothing about the organisation they have just joined and its tangled web of processes and special cases.

Demand for people with these skills is running hot. So they don’t come cheap. Yet when they arrive, they need to be supported by subject matter experts from the business to explain all the workarounds, the troublesome variation, the systems that don’t talk to each other etc. An expensive program just got more expensive.

To pay for this, day-to-day operations are having their budgets squeezed. They’re losing their best team members to support the transformation, they suspect the new hires are getting paid a lot more and will get the lion’s share of the bonus pool and they have a knot in their stomach knowing that, if the transformation succeeds, they’ll be the ones to lose their job.

This doesn’t exactly set the program up for success. One aspect that I think is potentially missing is formal recognition of the role that the business-as-usual (BAU) team plays in a digital transformation.

The stakes are high. Recent research from Harvard Business School identified a 7-21% valuation premium for organisations who got their digital agenda right. But it’s probably more the fact that digital is seen as an existential threat that’s creating the impetus. The organisations must do this, but the complexity means it will take time and be very expensive. I believe the chances of success are greatly increased by bringing the BAU team into the transformation tent and giving them an operational excellence mission of:

  • finding capacity
  • continuing to innovate and improve with negligible investment
  • keeping customers happy, and
  • supplying subject matter experts with the know-how of the current state.

In essence doing far, far more with far, far less. The BAU team are now “on the bus”, “in the tent” or whichever term your organisation uses and bound to the success of the venture. The transformation can’t succeed without both BAU and transformation teams delivering on their individual missions. They’re just different missions that together will deliver for the greater good of the organisation.

And one more thing. While the BAU team is busy freeing up capacity to support the transformation, why not use the capacity to re-skill and re-train their people. The language may be new, but an Agile Coach or Scrum Master is not a whole lot different to a Lean Coach. Anyone who has written Excel or VBA macros is an ideal candidate for re-training as a robotics analyst. I imagine the design team at IKEA see human centred design as an enhancement of existing skills into a different domain. The core data science skills already exist in most organisations. They may not be wrapped up in a single role, but most organisations have statisticians, data warehouse and management experts, reporting specialists and business modelers. Bring them together in a team and get them to cross-skill. You won’t need as many expensive new hires and you’ll have a far more aligned, engaged workforce. A workforce committed to making the transformation work.

I have a book coming out in the next couple of months—Match Fit for Transformation—which will cover precisely how the BAU teams should go about executing this mission.

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