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Digital Transformation: People, Organization & Change

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According to Forbes, 70% of all Digital Transformations fail most often due to organizational resistance to change. This presentation provides an overview of Digital Transformation with a strong focus on the soft aspects: changing employee mindsets and behaviors as well as the organizational culture and developing capabilities.

This document provides practical guidelines on developing a solid cultural foundation and the various frameworks/models for change management. It also serves as complementary materials to a digital transformation strategy and deployment guide.

Finally, this presentation helps to clarify the fuzziness around Digital Transformation and prepares key stakeholders in the organization for the Digital Transformation journey.

LEARNING OBJECTIVES

1. Acquire knowledge on the principles and key concepts of digital transformation
2. Understand the soft aspects of Digital Transformation - people, organization and change management
3. Identify the pitfalls to avoid and define the critical success factors of digital transformation

CONTENTS

1. Introduction & Key Concepts of Digital Transformation
2. Organizational Impact of Digital Transformation
3. Guidelines for Change Management
4. Pitfalls to Avoid & Critical Success Factors

Additional concepts covered include Design Thinking Principles, Martec's Law on Technology & Organizational Change, Customer Journeys, The Enrolment Curve, The Change Curve (Elisabeth Kubler-Ross), The Change Management Process, Business Model Canvas, McKinsey's 7S Framework for Organizational Alignment, Lencioni's Five Dysfunctions of a Team, Tuckman's Model of Team Development, Szpekman's Communication Framework, Ulrich's HR Competency Model, Conscious Competence Learning Model, Training Needs Analysis and the Emotional Competence Framework.

To download this complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations

Published in: Business
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Digital Transformation: People, Organization & Change

  1. 1. DIGITAL TRANSFORMATION People, Organization & Change
  2. 2. LEARNING OBJECTIVES 2 Acquire knowledge on the principles and key concepts of digital transformation Identify the pitfalls to avoid and define the critical success factors of digital transformation Understand the soft aspects of Digital Transformation – people, organization and change management NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg
  3. 3. CONTENTS 3 INTRODUCTION & KEY CONCEPTS ORGANIZATIONAL IMPACT CHANGE MANAGEMENT GUIDELINES PITFALLS & CRITICAL SUCCESS FACTORS 01 040302
  4. 4. WHAT BROUGHT US HERE TODAY 4 THE ORGANIZATION § Different understanding of digital transformation among stakeholders § Employees fear of being replaced as a result of digital transformation § Legacy IT infrastructure lacks efficiency § Organizational resistance to change THE EXTERNAL ENVIRONMENT § Digital transformation is being adopted by companies across most industries § Digitalization is no longer a choice but a necessity § Omni-channel is a prerequisite for great customer experience § Customers expect value and seamless experience
  5. 5. SOME STATISTICS ON DIGITAL TRANSFORMATION 5 Companies have already adopted a digital-first strategy or plan to do so Consumers will pay more for great experience Shoppers use more than one channel during their shopping journey Digital transformations fail, most often due to resistance from employees Companies are actually experience-led Employees said their company’s leadership doesn’t know what to do with digital transformation 89% 67% 73% 70% 31% 20% Source: Forbes
  6. 6. 6 DIGITAL TRANSFORMATION IS NOT ABOUT TECHNOLOGY Most digital technologies provide possibilities for efficiency gains and customer intimacy. But if people lack the right mindset to change and the current organizational practices are flawed, Digital Transformation will fail.
  7. 7. MYTHS OF DIGITAL TRANSFORMATION 7 Digital Transformation applies only to B2C companies 1 Digital Transformation is just for online businesses 2 Only Millennials are more willing to use Digital services 3 Digital Transformation is relevant only in developed markets 4 Digital Transformation is only about Digital, not IT 5 Digital Transformation and Digitization are the same things 6
  8. 8. MARTEC’S LAW: TECHNOLOGY CHANGES EXPONENTIALLY, ORGANIZATIONS CHANGE LOGARITHMICALLY 8 Technology changes exponentially Organizations change logarithmically Technology management is deciding which changes are adopted ? ? Source: Scott Brinker
  9. 9. SOFT SKILLS ARE ESSENTIAL TO ENSURE DIGITAL TRANSFORMATION MANAGEMENT 9 Employees must change how they approach their work, leverage data, and use new digital tools BEHAVIORAL CHANGE Employees need to embrace the idea that digital tools will help them to be more productive MINDSET SHIFT Leaders set expectations and lead by example LEADERSHIP SUPPORT
  10. 10. DIGITAL TRANSFORMATION DEFINED 10 “Digital transformation marks a radical rethinking of how an organization uses technology, people and processes to fundamentally change business performance.” George Westerman MIT principal research scientist and author of Leading Digital: Turning Technology Into Business Transformation
  11. 11. FIVE KEY DIGITAL TECHNOLOGIES TRANSFORMAING INDUSTRY & COMMERCE 11 BLOCKCHAIN CLOUD ARTIFICIAL INTELLIGENCE INTERNET OF THINGS CYBERSECURITY Blockchain allows the secure sharing of business processes between companies and partners in an encrypted manner The state of being protected against the criminal or unauthorized use of electronic data, or the measures taken to achieve this The interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data Artificial intelligence is the simulation of human intelligence processes by machines, especially computer systems Cloud computing means storing and accessing data and programs over the Internet instead of the local server or user’s computer hard drive AI
  12. 12. 12 Customers don’t think in isolated experiences. They think in terms of the end-to-end experience journey. DIGITAL TRANSFORMATION IS A JOURNEY, NOT A GOAL
  13. 13. “You’ve got to start with the customer experience and work back toward the technology – not the other way around.” STEVE JOBS 13
  14. 14. BENEFITS OF DIGITAL TRANSFORMATION 14 Thriving culture of innovation Improved customer journey Greater competitive advantage Increased internal collaboration More empowered workforce Improved efficiency Deeper data analysis Increased customer conversions and loyalty
  15. 15. A SOLID CULTURAL FOUNDATION IS ESSENTIAL TO ENSURE DIGITAL TRANSFORMATION MANAGEMENT 15 Role Modeling Alignment & Communications Execution FocusSkill Building Skill building approach to develop company- wide capabilities that meet unique technical requirements of the organization Role modeling culture where leaders consistently adopt and demonstrate the new behaviors Communications that cascade the change story to every level of the organization Formal systems and structures to ensure processes and targets reinforce to the desired changes and behaviors
  16. 16. WHAT IS THE IMPACT ON THE ROLE OF MANAGEMENT? 16 In hierarchies, managers were needed to: § Supply difficult-to-find intelligence § Pass information up and down the hierarchy § Convey accumulated learning and culture of organization In a digitally-transformed organization: § Managers need to be retrained as “orchestra” leaders or as frontline employees § Reward systems need to reflect equal value of “work” as well as “management” § Job reductions are best planned well in advance § “Blockers” must be handled
  17. 17. MARKETING & IT HAVE TREMENDOUS ABILITY TO IMPACT CUSTOMER EXPERIENCE THROUGH COLLABORATION & CHANGE 17 Marketing defines the vision of the company and value proposition for the customers. IT touches and enables every part of the business and is the ultimate orchestrator of change. Marketing IT
  18. 18. UNDERSTAND WHY PEOPLE FEAR CHANGE 18 Lack of belief in effectiveness or reality of change Systems & Processes Behavior Attitude Culture The way we act The way we think Start by changing work processes and systems
  19. 19. UNDERSTAND WHY PEOPLE FEAR CHANGE 19 Insecurity “What is happening and what will happen to my job?” Digital Transformation answers: § Segment the audience § Communicate clearly using 4 P’s of: Purpose, Process, Progress and Problems § Communicate using multiple channels and multiple voices § Be honest: this in itself may be an indication that profound change is taking place
  20. 20. ● It is key to understand and leverage is the rate and pace at which people adapt to change ● Focus time and efforts on the middle / late enrollers. Don’t waste time on Slugs / Die Hards. You won’t persuade them in 100 days! ● Let the Initiators & Early Enrollers help you promote the change UNDERSTANDING RESPONSES TO CHANGE 20 Source: The Atlanta Consulting Group, Inc. THE ENROLLMENT CURVE
  21. 21. PREPARE & COACH CHANGE LEADERS 21 Stage 1 2 3 4 State Status quo Disruption Exploration Rebuilding Reaction Shock, Denial Anger, Fear Acceptance Commitment Positive Negative Impact Source: Elisabeth Kubler-Ross The Change Curve
  22. 22. THE 9 BUILDING BLOCKS OF A BUINSESS MODEL CANVAS HELP TO ALIGN ACTIVITES TO CREATE VALUE FOR CUSTOMERS 22 Key Partners Key Activities Value Proposition Customer Segments Key Resources Cost Structure Revenue Streams Customer Relationships Channels Source: Strategyzer Business Model Canvas
  23. 23. A SYSTEMATIC APPROACH TO MANAGING CHANGE ENSURES GREATER BUY-IN & SUPPORT FOR DIGITAL TRANSFORMATION 23 Analyze Current Situation Plan & Launch Program Monitor Progress Evaluate Effectiveness § Identify reason for change § Assess readiness for change § Assess impact of change § Identify gaps § Gather feedback § Define change strategy § Set up change infrastructure § Create awareness and get buy-in § Develop and communicate plans § Develop skills § Launch pilot project § Monitor change process § Overcome resistance to change § Assess behavioral changes § Measure effectiveness § Provide support § Review results § Share success stories § Provide follow up support § Reward and recognize 1 2 3 4 Change Management Process
  24. 24. TEN SOURCES OF TEAM CONFLICT THAT IMPEDE DIGITAL TRANSFORMATION SUCCESS 24 ● Roles ● Goals ● Procedures ● Resources ● Personalities ● Information ● Structure ● Value/norms ● Communications ● Turf Issues
  25. 25. DESCRIPTION OF TUCKMAN’S MODEL OF TEAM DEVELOPMENT STAGES 25 Source: Bruce W. Tuckman Forming § Team members meet each other § Team members learn about the task § All team members learn what their roles will be Storming Norming Performing § Team members learn how to work together § Team members learn about other member’s abilities § Leader focuses the team § Team starts to work and act together § Roles evolve into helping the team succeed § Team members are more likely to express opinions § Team members work hard toward goal § Members are flexible and help each other § Leader’s role is blurred – everyone is focused 1 2 3 4
  26. 26. SZPEKMAN’S COMMUNICATION FRAMEWORK PROVIDES A HOLISTIC APPROACH TO MANAGING CHANGE COMMUNICATIONS 26Source: Andy Szpekman Szpekman’s Communication Framework Communication Leadership Measures Structure/Process Rewards Knowledge/Skill Emphasis Competency models Hiring processes Orientation programs Training and development Feedback and coaching Talent planning Performance management 360 degree feedback Employee surveys Performance metrics and benchmarks Communication plans Print and electronic media Face-to-face communication Compensation plans Benefits Recognition programs Promotions Organization structure Career paths Policies and procedures Roles and responsibilities Tools and support Vision and strategy Agenda items Questions Praise Resources Assignments Symbolic behavior MANAGERS
  27. 27. THE CONSCIOUS COMPETENCE LEARNING MODEL RELATES TO THE PSYCHOLOGICAL STATES INVOLVED IN SKILL DEVELOPMENT 27 Incompetent Competent Competence Consciousness UnconsciousConscious Unconscious Incompetence Unconscious Competence Conscious Competence Conscious Incompetence Source: Noel Burch (Gordon Training International) The Conscious Competence Learning Model
  28. 28. “Insanity is doing the same thing, over and over again, but expecting different results.” ALBERT EINSTEIN 28
  29. 29. 10 PITFALLS OF DIGITAL TRANSFORMATION 29 1. No business strategy 2. Not knowing what digital transformation is 3. No leadership commitment 4. No stakeholder analysis 5. No risk management 6. No internal communication 7. Not having the right people 8. Not investing in cultural change 9. No collaboration with other business functions 10. No ownership of the digital transformation project
  30. 30. Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg ABOUT OPERATIONAL EXCELLENCE CONSULTING

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