Architecting Your Digital Transformation Office

A Case for Putting People First

This post is part of our continuing series, Your Guide to a Successful Digital Transformation.

Digital transformation happens across the organization and at all levels. It affects not just procedures but also the organization’s governance and operational framework. This is not just an IT project; IT offers helpful frameworks and tools to advance the goals, but these are a means to an end.

Assessing your organization’s capacity for digital transformation starts with leadership capacity to identify the right person for the job. It proceeds to change capacity to discern the impacts of transformation on individual team members. Finally, consider structural capacity: the impact on the holistic organization. These three aspects may be distinct, but more likely they overlap—particularly capacity for change and of structural capacity. Finding the right leader and putting people first are the primary steps for ensuring success.

Understanding Your People and Organizational Maturity

Leaders need to meet people where they are and convey project goals in easily understood terms.

Engaging your organization to initiate a digital transformation effort (automation/BI/data dashboards/other) takes an understanding of both your people and your organizational maturity. Executive leadership needs to assess the knowledge and skill level of project leaders as well as the adaptability and readiness of impacted groups. This assessment helps management determine the pace of change that can be executed within an organization, as well as the amount of on-boarding and supportive “human” change management effort that will be required to achieve the benefits of a digital transformation project.

This planning and assessment can set your organization up for a successful digital transformation effort that achieves the benefits of a digital organization, including:

1. Increased efficiency
2. Improved data and transaction transparency
3. Increased resiliency
4. Agility:  both internally and market-facing
5. Increased revenue and profitability

People Are the Foundation

When an organization assesses an IT function across the people, process and technology components, it’s surprising how often considerations about people come third!

Digital transformation should start with the end in mind: how will we better serve our people with the successful implementation of this project and ultimately make it easier for them to do their jobs?

A September, 2021 report by Valoir noted that organizations with a high level of digital transformation experience a revenue growth rate roughly twice that of organizations with a low or non-existent transformation program.

Despite the potential benefits of a successful digital transformation program, however, a similar survey issued recently by Statista shows that 62% of digital transformations had lost momentum during the process or had fully stalled. The difference between highly successful transformations that reap the benefits of digitization and those that stall often comes down to having the right people in place.

The applications to support a digital transformation likely do not become less effective; they still operate at the same speed and have the same functionality but another component in the transformation process is driving this inability to scale, the people that are supporting the implementation and adoption of the new technologies. Successful adoption and execution depend on having the right people driving the transformation.

Aligning your project objectives with both the broad and specific needs of the organization requires discernment. What are your relative strengths and weaknesses when considering leadership, change management, and organizational structure?

Leadership Capacity

The people you choose to lead your digital transformation initiative need not only technical proficiency but also a holistic understanding of how your organizational components fit together. The leader of the effort must be able to speak IT and translate it into plain English. A Project Management Professional (PMP) Certification helps but, beyond any certification, that person needs to understand project planning, needs assessment, user acceptance (not just by “power users” — by everyone) and an ability to tease out pain points among staff and address unintended consequences of implementation.

As with any initiative, finding the right leader can be difficult. Here are some key talents of successful digital transformation leaders:

1. Negotiation. Much of the transformation leader’s time will be taken up with negotiation. Working with the IT organization for application access and security, working with data security team members to get them comfortable with the data movement, and working with the business to convince it to identify and implement changes.
2. People engagement. The leader will need to be able to teach his or her team to engage with the business to continue to expand the program across the organization.
3. Process-oriented. Frequent changes require a highly adaptive business process in which changes can occur without drawn-out evaluation periods. Having a leader that focuses on creating repeatable, clear processes for the design, development, and implementation of transformations facilitates the ability to rapidly implement changes and communicate where progress is being made, even if the results may not be visible to the everyday user.

Before each stakeholder meeting, the leader should ask themselves two questions: “What’s in it for them?” (tangible ways you are making tasks easier) and “What are they giving up?” (sacrifices – and effort – required to accomplish the project). With this knowledge, you can begin to identify your organization’s capacity for change.

Change Capacity

On a scale of 1 (easy-as-pie) to 10 (wailing and gnashing of teeth), how drastically will the project change the daily work experience for each person or team within the scope? If you can’t at least make an educated guess, you probably should not start a major initiative. You need to understand the current technological acumen of your staff, your organization’s IT culture and, perhaps most importantly, your overall bandwidth. Chart out the last major technology initiative in the organization and review the post-mortem. Don’t make the same mistake twice. Did the staff adapt well to the change? Did it meet the organizational objectives? What has changed since then?

As you plan your digital transformation, consider your value proposition. How are you going to communicate the benefits of this transformation to those who will be affected? An organization that has not had significant changes in both applications and processes can have a lower change capacity. This circumstance requires a stronger focus on the business side of the design and stakeholder engagement by the Transformation Office. By contrast, an organization that has a higher change capacity likely needs more support on the enterprise alignment of new processes and activities to provide the consistency needed for a digital transformation program.

Regardless of the underlying environment, how is your project leader teasing out capacity for change? You need to consider the right methodology for the specific audience. Facilitation skills prove important. Does the organization respond well to a town hall setting? Smaller focus groups? A SWOT (Strength Weakness, Opportunity, Threat) analysis? Even a written survey to level-set expectations can be a good first step. Over communication will not harm your effort!

Structural Capacity

Digital transformation can sometimes lead to reorganization. Over time, automation and access to enhanced data can reveal that some people are not in the right place performing functions that make the most sense. At its most effective, digital transformation can map and optimize the flow of information in an organization. If you map your organizational chart against the ideal flow of information, reporting structures may not be aligned perfectly to data flow. More likely, there will be current functions with processes that overlap organizational lines and create inefficiencies that will be resolved with the implementation of transformative activities. Alternatively, you may identify siloed functions that would benefit from increased collaboration. But before you upset anyone’s apple cart, consider the “why?”

Here are some lessons learned about the alignment (or misalignment) of organizational structure versus the needs of automation and enhanced data capabilities:

Consider how “hierarchal” the identification, design, development and review process is for digital transformation. Do minor process bots with minimal control risk require more than five approvals to develop and deploy? Each approval slows the pace of transformation activities and can cause disengagement with the business that is sold on digital transformation creating “quick” wins. A flattened structure operating within a framework can often accelerate your program while maintaining the security and access posture of the organization.

Monitoring organizational throughput can be key to maintaining momentum and success of the program. As many of the digital transformation products are so new, people may be put in a position of leading a team to perform an activity that they don’t fully understand, even if the interest and capability are there. Sometimes it may seem like a wasted investment, much like the lost time a college student feels after switching majors. The result can be wasted investment, delays in achieving the objective, and executives wondering when or if they will ever see the successful conclusion.

In each of these cases, lessons learned during a transformation effort might lead to organizational changes. But reorganization shouldn’t be a foregone conclusion. In the people/process/technology equation, there is a reason we put people first. Organizations working through a new digital transformation journey should expect a learning curve as their processes grow and mature.

Focus first on executing the marginal changes around individual responsibilities for processes. Then progress through team and departmental responsibilities to create a structure that facilitates the continuing growth and development of the transformation program. This process may highlight that the person you had in the driver seat was correct all along and just needed the supporting organization to scale at the desired rate.

If it makes sense to alter the reporting structure for individuals, or even for entire teams, then proceed carefully. Remember, pick the low-hanging fruit before you upset the apple cart.

For information about how we can assist in your organization’s digital transformation, contact us. We are here to help.

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