Digital transformation isn’t a one-size-fits-all process, but it generally involves integrating technology into your operations and how you work and deliver products and services to your customers.
However, investment in technology alone isn’t enough if your teams don’t have the skills they need to get the most value from your new digital tools.
Successful digital transformation involves:
- Crafting an overall strategy that challenges the status quo and determines the digital transformation skills needed in your organization
- Ramping up adoption of new digital tools and function-specific training across your organization
- Getting ROI on your upskilling dollars
3. Upskilling and reskilling were the top priorities for
59% of learning and development professionals in
2021.
Future of Jobs Report,
World Economic Forum
4. Three stages of digital
transformation
Simplifying and digitizing existing processes and functions
1. Modernization
5. Three stages of digital
transformation
Improving existing operations; a complex cross-value-chain change
effort
2. Enterprise-Wide Transformation
Simplifying and digitizing existing processes and functions
1. Modernization
6. Three stages of digital
transformation
Improving existing operations; a complex cross-value-chain change
effort
2. Enterprise-Wide Transformation
Simplifying and digitizing existing processes and functions
1. Modernization
Challenging the existing process, structures, and capabilities
3. New Business Creation
7. 1. Invest in organizational skills gap and digital capabilities analysis
2. Prioritize the skills you should develop and which technology
investments to make
3. Design a roadmap to build a continuous learning plan
Key Takeaways
Digital transformation isn’t a one-size-fits-all process, but it generally involves integrating technology into your operations and how you work and deliver products and services to your customers.
However, investment in technology alone isn’t enough if your teams don’t have the skills they need to get the most value from your new digital tools.
Successful digital transformation involves:
- Crafting an overall strategy that challenges the status quo and determines the digital transformation skills needed in your organization
- Ramping up adoption of new digital tools and function-specific training across your organization
- Getting ROI on your upskilling dollars
Most digital transformations fail. Various studies from academics, consultants, and analysts indicate that the rate of digital transformations failing to meet their original objectives ranges from 70% to 95%, with an average at 87.5%. Yet, digital transformation has been at the top of corporate agendas for at least a decade and shows no sign of slowing down. On the contrary, many commentators have highlighted the accelerating impact of the Covid-19 period on digital transformation.
The most under-appreciated reason that digital transformations fail is by going too big, too fast. There’s a learning curve to digital transformation, and most companies need to walk before they can run. The key is to start with modernization efforts that don’t transform the business—much less create a new one—but which create the capacity to succeed in more ambitious efforts later on.
It should be 100%
You need executive buy-in to give their support to build out learning and development programs. Another interesting data point is the Workplace Learning Report in 2020 said only 27% of learning and development professionals felt their CEOs were active champions of learning. But then in 2021, Sixty-two percent are now champions of learning.
new jobs, new skills, new competencies!
The main difference between reskilling and upskilling is that reskilling refers to an employee learning a new set of skills in order to perform a different job, while upskilling refers to an employee learning additional skills to be better equipped to do his/her job.
Modernization (step one) is about simplifying and digitizing existing processes and functions. For customer experience it can be about designing customer apps or implementing new self-service touch points. For operations, it can be about connecting products and digitally re-engineering core processes. For employee experience it can be about automating HR processes or providing a self-service portal for employees.
Do these digital programs transform the organization? Most likely not. This phase is often undervalued or even derided, but it shouldn’t be. Just like the foundations of a house, it makes the organization digitally stronger and smarter. It also provides reasonably quick returns that can fuel more complex digital investments. And it is a great chance for the organization to improve its digital capabilities.
Enterprise-wide transformation (step two) is a complex cross-value-chain change effort — for example, a retailer wanting to have a fully integrated customer experience across all its physical and digital channels. For operations it can be an internet-of-things application for condition maintenance or automating order-to-cash processes. For employee experience it can be institutionalizing agile methods of working or establishing a continuous learning and re-skilling culture.
Are these transformational efforts? Absolutely. Aligning traditional organizational silos, establishing proper governance models, adding new talents and the like — these are all critical muscles to develop for transformation success.
Enterprise-wide transformations usually focus on improving existing operations. But, when successful, they very often open up new value creation opportunities, for example by reaching new customers or finding new efficient ways of running operations. Enterprise-wide transformations are cross-functional and complex, but are mandatory learning phases on the journey to digital-transformation maturity.
New business creation (step three) is about increasing the size of the existing pie or creating new revenue lines. For customer experience, it can be moving from selling products and services to new subscription-based business models. For operations it can be using data and analytics to accurately predict operational performance of products or systems.
These are true transformations because they challenge the existing processes, structures, and capabilities of the organization and require new ways of working. Leadership is key, as this is about transitioning from the existing model of operations to new ones. Often, this phase also demands rethinking the boundaries of the organization as it moves from traditional linear supply chains to ecosystems. It requires a high level of digital transformation maturity.
Are these three digital transformation horizons completely linear? Probably not, in the sense that most organizations will manage a portfolio of initiatives that may cover all three areas. For instance, they may undertake a certain amount of modernization to deliver quick wins, while at the same time having enterprise-wide global programs and/or innovating business models through experiments and controlled pilots.
But from an organizational learning perspective it’s rare to find examples of digital leaders in large corporations that have leapfrogged the early phases. The key to more successful digital transformation is to not skip ahead: Start with step one and invest the focus and resources to get it right. Growing your organization’s digital maturity through the digital transformation corporate learning curve will increase your chances of success.
Investing in digital transformation and skills training pays off.