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At the 30,000-foot level of the corporate suite, plotting digital change is heady, exciting stuff. Business leaders can almost smell the gains in efficiency and speed and the data-driven increase in customer satisfaction when they think about all the new tools at their disposal and how they might restructure their organizations. As one senior executive at a large telecommunications company recently told me, “Mapping out a new approach to compete in the digital era has been so cool!”
But here’s the decidedly less cool, more mundane truth that I’ve learned after 16 years of working on such transformations with more than two dozen companies across eight industries: Success depends less on strategic inspiration than on the way people on the front lines implement new digital tools, and most leaders aren’t laying a foundation for those employees to succeed. In large part, that’s because senior managers don’t have any idea what really happens at the ground level. So they’re caught by surprise when tools don’t get used the way they’re supposed to be (or even at all), data-driven insights prove unremarkable, and anticipated gains fail to materialize. Their digital transformations become digital flops.
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To avoid that fate, leaders must understand how digital tools come to be used widely and effectively so that they can create an environment that provides optimal conditions. They can’t hand that work off to IT and hope for the best.
In this article, using an automotive company’s effort as an archetypal example, I’ll describe how digital transformations tend to be experienced and processed by those on the ground and then show how reverse planning — working backward from that reality, phase by phase, to set broad corporate goals — leads to change that sticks. Plenty of articles offer theories about and strategies for digital transformation. This one will help you anticipate and manage the gnarly, often-ignored details that destroy many a well-intentioned plan.
The Phases of Digital Adoption
Most digital transformation efforts are launched with extensive rollout plans that outline activities such as financing the transformation, reorganizing the company to make it agile enough to get the most out of digital tools, developing data-driven insights that allow the company to deliver more customized products, and reducing time to market.
All of that is critical.
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1. D. Leonard-Barton and I. Deschamps, “Managerial Influence in the Implementation of New Technology,” Management Science 34, no. 10 (October 1988): 1252-1265; and W. Lewis, R. Agarwal, and V. Sambamurthy, “Sources of Influence on Beliefs About Information Technology Use: An Empirical Study of Knowledge Workers,” MIS Quarterly 27, no. 4 (December 2003): 657-678.
2. G.C. Kane, A. Nguyen Phillips, J.R. Copulsky, et al., “The Technology Fallacy: How People Are the Real Key to Digital Transformation” (Cambridge, Massachusetts: MIT Press, 2019); and J. Battilana and T. Casciaro, “Change Agents, Networks, and Institutions: A Contingency Theory of Organizational Change,” Academy of Management Journal 55, no. 2 (April 2012): 381-398.
3. R. Cross and A. Parker, “The Hidden Power of Social Networks: Understanding How Work Really Gets Done in Organizations” (Boston: Harvard Business Press, 2004); and S.P. Borgatti, M.G. Everett, and J.C. Johnson, “Analyzing Social Networks,” 2nd ed. (Thousand Oaks, California: Sage, 2018).