In a business environment characterized by volatility, uncertainty, complexity, and ambiguity (VUCA), many organizations are not only grappling with what changes to make but how to undertake change management.
With digital technologies redefining, destroying and creating new industries, organizations find themselves in a pressing situation where they must change quickly without disenfranchising their current employees and customers.
How do you manage this change and still protect market share and existing competitive advantages? In this article, we look at digital transformation, not as an enabler of change, as it rightly is, but as a tool to manage change management in an increasingly VUCA world.
1. Redefine Cultural Practices
In a PwC report titled “Culture’s Role in Enabling Organizational Change,” a survey of senior executives found that two of the biggest obstacles to effective change management are “change fatigue” and an inability to sustain change (through cultural changes) within an organization.
One of the ways digital transformation can help an organization overcome these obstacles is by emotionalizing change. Consider a situation where a bank is introducing an AI tool to answer customer queries. Naturally, there would be resistance as this would be perceived as a threat to current jobs.
However, by presenting digital transformation as a means of helping employees do more meaningful work, it can act as a culture-defining stepping stone. As employees buy into the enabling and empowering characteristics of digital transformation, change management may become easier.
Change Management Goal
Focus on presenting digital transformation as a culture enhancing tool, rather than a complete departure from entrenched cultures, to emotionalize and entrench meaningful change.
2. Destroy Information Silos
In the traditional enterprise, information silos abound. When change is initiated, these silos act as barriers to the effective diffusion of change across the organization. In the PwC report, the third impediment to successful change identified was how change initiatives are selected, planned and implemented.
While this is also a culture issue, it also identifies information silos as a culprit in successful change management. Digital transformation can reverse these negative effects by integrating an open information system that allows for the diffusion of information, and change, not only vertically but horizontally through the entire organization.
For instance, by implementing an ERP, an organization can create a shared information platform where everyone in the organization has visibility of data from other departments. In this way, an ERP, a digital transformation tool, can be seen as destroying information silos within an organization. By seeing digital transformation as enabling the flow of information across an organization, leaders can better manage change by putting everyone in the organization on the same page.
Change Management Goal
Evaluate how digital transformation can help destroy information silos in your organization to not only diffuse information but change as well.
3. Retool Employees
Prosci’s Best Practices in Change Management research report identifies inadequate buy-in and resourcing as a significant impediment to change. When employees feel they lack the resources or managerial buy-in to implement change effectively, the rate of change tends to slow down. To avoid this slowdown, leaders can look to a key characteristic of digital transformation in empowering employees – replacing activities with value.
From an employee perspective, anything that helps them deliver more value is welcome, so by positioning digital transformation as a tool that helps employees deliver more value, leaders can avoid fallouts brought on by resistance to change. Further, digital transformation also introduces technological tools that can help employees implement change faster and more effectively.
Consider an enterprise that hands its floor managers mobile devices to help them complete tasks faster on the move. By doing this, such employees feel they have the tools and resources to achieve change-related objectives better, significantly increasing compliance and accelerating change.
Change Management Goal
Use digital transformation to introduce tools and processes that empower employees to embrace change and sustain change momentum across the organization.
4. Redefine Change Management Decision-Making
The PwC report found that when asked to select the top reasons for change resistance, 44% of employees say they don’t understand the change while 38% say they don’t agree with it. This points to a decision-making breakdown, especially at a managerial level. When decisions are made behind closed doors and then cascaded to the rest of the organization, the response is often a combination of confusion and resistance.
Within the context of digital transformation, however, leaders can create better decision-making structures that involve the entire organization. For instance, by implementing an enterprise-wide digital feedback system, management can listen in on what employees have to say about any proposed changes.
Additionally, using data analysis and analytics that monitor employee behavior and sentiment, leaders can better understand the “mood” of the organization and respond through better-informed decisions. In this way, digital transformation opens the door to more transparent and inclusive decisions.
Change Management Goal
Harness digital transformation to drive data-driven, inclusive, and objective decision-making to reduce confusion and resistance to change.
5. Introduce Lean/Agile
Change fatigue occurs when employees see big-push change efforts fizzle out repeatedly. This happens as a result of how traditional change is implemented –in a “Big Bang” fashion. The problem with this approach is that employees develop skepticism and apathy towards change, a major challenge in change management.
Digital transformation introduces lean and agile principles, which can help avert this. By employing iterative small-footprint experimentation, leaders can thoroughly test any change efforts before rolling them out to the wider organization.
Consider Western Union’s transformation into a digital money transfer organization. By constituting a small change team and allowing this team to transform the organization function by function gradually, Western Union sidestepped the challenges that come with a big bang approach. Today, Western Union has undergone significant change by using a lean and agile change management process.
Change Management Goal
Use digital transformation lean and agile principles to create small-footprint change experiments before rolling out to the rest of the organization.
Enabling, not Enforcing Change
For any organization to survive and thrive, change is inevitable. However, the traditional way of announcing big bang changes and then enforcing them is fast becoming outdated. With better-informed and more-demanding employees, enterprises must now shift to iterative change and employee empowerment.
Digital transformation introduces the tools and techniques necessary to implement and manage change within an organization effectively. The transition from a traditional enterprise to a modern one is doubtlessly difficult. It will require leaders to embrace new ways of thinking and doing. Doing this will harness the inherent potential of digital transformation.
