In today's ever-evolving digital landscape, embracing change is no longer optional. To stay ahead, organizations need to navigate the complex terrain of digital transformation, which goes beyond just adopting new technology. It's about aligning systems, processes, and people in a way that unlocks new value and efficiencies.
But navigating this shift can be challenging. Resistance to change is natural, and traditional ways of working can be hard to let go of. This blog post demystifies change management strategies that can help your organization navigate this journey smoothly and reap the rewards of digital transformation.
Digital transformation isn't just about shiny gadgets. It's about fundamentally rethinking how your organization operates. This involves aligning technology with new processes and mindsets, which can be met with apprehension. By actively managing change, you can minimize disruptions and ensure everyone is on board with the new direction.
This article equips you with proven strategies to navigate the change. Whether you're a leader guiding your organization into the digital age, a project manager spearheading a specific initiative, or an IT professional implementing new systems, this guide equips you with the knowledge and tools to navigate the changing landscape.
Changes are hard, but even harder at an enterprise scale
People fear change due to a fundamental tendency to seek safety and control. They are hesitant to leave their comfort zones—familiar, risk-free spaces where routines are established and outcomes are predictable. Stepping outside these zones into the unknown brings uncertainty and the potential for failure, discomfort, or anxiety.
Many people, including employees, fear change because it forces them to confront habits, long-held beliefs, and patterns of behavior. Change itself can be interpreted as a threat to current stability, and the human brain is programmed to react to possible threats.
Consequently, many prefer the safety of the known, even if it means missing out on potential opportunities for improvement. This theory finds confirmation in the Loss Aversion concept developed by Daniel Kahneman and Amos Tversky in 1984, which is, by the way, a common method for checkout optimization in ecommerce. It can be summarized by stating that the fear of loss always outweighs the love of gain.
Why this psychological introduction? The same rules and patterns can be applied to businesses (business leaders), but on a much larger scale. The threat of losing something – profit, position, or employees – may outweigh the perspective of potential digital transformation success.
Implementing digital transformation on an enterprise scale is a formidable challenge. Organizational change management for digital transformation requires a lot of effort since companies often have to cope with long ingrained processes, complex hierarchies, and unconscious resistance to new developments among staff. Company-wide changes require thorough planning and clear communication.
The risks are high, but when done correctly, changes can redefine the organization’s future and set new standards for innovation and competitiveness. In the dynamic world of business, change, including digital transformation, is not just inevitable. It is necessary for survival and growth.
What is digital transformation?
Digital transformation is a process in which companies refine their business strategies, operational models and technological infrastructure to fully leverage the opportunities offered by new digital technologies.
The goal of a successful digital transformation is to automate existing processes and create new, more efficient ways of doing business that are designed to meet the evolving demands of the market and consumers. Businesses that successfully adopt digital transformation gain a competitive advantage by becoming more agile and innovative.
It is also important to keep in mind that this is an ongoing process. Digital transformation success depends on adjustment to quickly evolving market trends and technological advancements.
What is change management?
According to the McKinsey Global Survey on digital transformations, over 80% of participants stated that their organizations had carried out digital transformation initiatives during the previous five years. Despite these efforts, the success rate is relatively low. Less than 30% of entrepreneurs claim to have successfully improved performance.
Some of them probably failed due to a lack of proper change management, a term that describes a methodical approach to dealing with company transformation. In the 1970s, business consultants Thomas J. Peters and Robert H. Waterman created the McKinsey 7-S framework for change that included: shared values, strategy, structure, systems, style, staff and skills. Some 30 years have passed and their model can still be applied to change management strategies in digital transformation.
The goal of change management is to use digital transformation best practices and strategies (processes and procedures) that will bring about change, assist individuals in becoming accustomed to change, and ultimately ensure that changes are implemented successfully to achieve lasting benefits.
In order to achieve desired outcomes, change management strategies must duly consider the impact of digital transformation on processes, systems, and the workforce. It requires thorough planning, communicating, scheduling, implementing, and evaluating the effects.
Why is change management important when adopting new technologies?
A structured approach to digital transformation provides an organization with numerous benefits:
Change management facilitates the adoption of new ideas, processes, and technologies by systematically managing the transition from old to new ways of working. Providing a methodical approach for implementing change ensures that innovative initiatives are well-communicated and understood by all stakeholders.
There is always a risk of disrupting existing workflows when new technology is introduced. Change management assists in organizing and carrying out the transition with the least amount of disturbance to business operations.
By effectively managing digital transformation, the company lowers the likelihood of costly downtime or errors. A successful change management plan can spot possible problems before they occur, allowing for cost-effective solutions rather than post-implementation fixes.
When executed properly, change management decreases the probability of delays resulting from confusion and miscommunication. It streamlines the process, enabling organizations to achieve their goals more rapidly.
Digital transformation steps
There are 7 major digital transformation steps you should consider when managing change. This is a road map for implementing digital transformation.
Step 1: Evaluate the current digital condition of your organization.
This step facilitates a thorough analysis of the state of technology today, pointing out advantages and disadvantages that provide a starting point for strategic planning.
Step 2: Determine and assess the gap
Identifying and evaluating any gaps is of utmost importance, highlighting the discrepancies between the existing and envisioned condition of a company’s digital capabilities. Determine the technology needed.
Step 3: Specify the primary goals of the digital transformation
Your strategy must include a clearly defined set of objectives. The most common goals include digital transformation of customer experience/service, internal cooperation, performance, cost efficiency, security, etc. Your objectives can be a combination of the aforementioned.
Step 4: Develop a strategy for digital transformation
Align short- and long-term goals with the current technological level of your organization and prepare a realistic road map. Successful digital transformation can be achieved at variable cost, so set a budget at the planning level.
Step 5: Make the transition resonate with the team
Clearly communicate the necessity of a change and the benefits of the outcomes. Designate tech-savvy people to inspire employees and conduct digital transformation.
Step 6: Implement change
Having all this in mind, begin digital transformation in your organization. Don’t be discouraged by initial challenges—the inventors of the steam engine didn’t have it easy either.
Step 7: Monitor the effects
Digital transformation is a process. Some goals may turn out to be unrealistic; others might need adjustments. Try to monitor progress and listen to ongoing stakeholder feedback.
5 key change management strategies
Navigating digital transformation in an organization is surely a challenging but rewarding endeavor. Here are five change management strategies that will help you navigate the digital transformation in your organization painlessly.
Key #1: Understand the “why” and make a convincing case for your employees
This strategy is based on the understanding that successful digital transformation is not just about new processes or technologies but mostly about people—about their perception and acceptance of, and engagement with the change.
For a digital transformation to succeed, it is crucial to recognize why it is justified and craft a narrative around the change. The story should emphasize positive outcomes, and be clear and honest.
While technical aspects are significant, impact on the company’s vision and objectives is even more critical. Employees should understand how the organization in general, and they as individuals, will benefit from change. They will be more motivated once they grasp how digital transformation success will positively affect their professional growth, working conditions, etc.
The company should also provide staff with workshops, training sessions, access to learning materials, and other resources that are helpful to understanding the “why.” Obviously, two-way communication plays a vital role in managing digital transformation. The story should be consistent and repeated over the right channels, e.g., via meetings or intranet. Employees should be given the opportunity to ask questions, express concerns, and provide feedback, which can be an interesting and valuable source of insights about change perception.
Key #2: Start from the top and assign digital-savvy leaders
In the context of change management strategies, it is vital to start with leaders and then implement change at the lower levels of the company hierarchy.
Leadership is vital for a number of reasons:
- Setting the strategic direction: Leaders clearly articulate a vision of what digital transformation means for the organization and how it aligns with the overall business strategy. This vision provides a road map and creates a sense of purpose around the transformation efforts for all employees.
- Resource allocation: Executives have the authority to allocate resources, such as time, money, and personnel, towards digital transformation purposes.
- Setting the example: Leaders should set an example for the change they want to see, demonstrating engagement and enthusiasm. Employees may embrace and adopt digital technologies more widely within the company if they witness upper management using them effectively.
- Ensuring integration: It is necessary to integrate digital transformation throughout various departments, systems, and processes. Senior leaders have a helicopter view and can ensure change is well coordinated in all areas and aspects.
Is a true digital transformation possible with existing leadership? Well, according to the McKinsey report, nearly 70% of respondents claim their management staff changed during the transition. In most cases, businesses brought on board new, digital-savvy leaders.
Integrators and technology managers explain the “what” and “why” to their coworkers and incorporate digital procedures and methods into established operational frameworks.
An interesting fact is that those companies who engaged a chief digital officer (CDO) turned out to be 1.6 times more likely to succeed in digital transformation.
Key #3: Start small – don’t do everything at once
Generally speaking, starting small aids in establishing a base of digital capabilities and culture that can be gradually scaled. Employees at all levels find it simpler to get accustomed to new technologies and processes when the transition is executed in small, more manageable steps.
Focusing on incremental changes allows an organization to test new technologies and processes while learning from each step, lowering the risk associated with large-scale transformations. This strategy enables the organization to make adjustments, which is safer and more affordable than error correction after a significant rollout.
Moreover, this strategy facilitates rapid success. Employees and other stakeholders get quicker evidence that change is beneficial both for the company and for themselves, encouraging further efforts.
This strategy also allows for more flexible allocation of resources. As opposed to devoting a significant portion of budget and personnel to a single, massive transformation initiative, a business can allocate its resources more cleverly over time, streamlining digital transformation without jeopardizing everyday operations.
Key #4: Empower your people to work in new ways and provide them with proper tools and training
This is a fundamental element of a successful digital transformation. When it comes to moving an organization forward, having staff members who are self-assured in their capacity to adapt to technological shifts quickly becomes a valuable asset.
As businesses become more digitally advanced, the nature of work often changes, requiring new skills. If you provide your employees with the appropriate tools and training, you can rest assured that they will not only be able to make effective use of emerging technologies, but that they will also feel supported and competent in their roles. This will increase their productivity, innovation, and overall job satisfaction.
Additionally, when employees have a strong command of digital tools, they are in a better position to make a significant contribution to the transformation with their insights and feedback.
Key #5: Employ a trusted technology partner to assist you during your transformation process
In the current dynamic business world, digital transformation has become an unavoidable necessity. Technological advancements, combined with changing consumer preferences, have progressively challenged conventional business models.
Organizations must embrace digital technologies to increase efficiency, improve agility and customer experiences, and innovate their products. In order to maintain competitiveness and relevance, this transformation requires not only the adoption of new technologies but also the reevaluation and restructuring of entire business models and processes.
Change may seem challenging, but with the right technology expert, the transition should be smooth and the outcome a success. Choosing RST as your partner in digital transformation offers a unique blend of innovative technology solutions and deep industry expertise. A proven track record of successful partnerships in digital transformation reflects our proficiency in the subject matter.
We are skilled at automating and customizing processes to meet the specific needs of your organization, scaling and integrating systems, architectural changes, cloud and security solutions, and many other digital tools that can elevate your business to the digital era.
RST’s team of specialists is committed to remaining at the forefront of technological progress, delivering state-of-the-art solutions that will provide you with a competitive edge. We also offer extensive assistance and instruction to guarantee that your team is well-prepared to efficiently utilize emerging technologies.
Are you ready to embrace the future? Reach out to us.