Last week, at Consultancy.nl we read about a survey by Boston Consulting Group (BCG): only 30% of global digital transformations are successful. What exactly is the cause of this? And what can leaders do to make digital transformations a success? Interesting questions.
Digital transformations cover a wide and complex range of fundamental changes within organizations. These changes revolve around people, processes, infrastructure, sustainability or, for example, the capacity for innovation in the long term. Are you not working on it yet or do you have questions about it yourself? Read more about the Weconomics learn / work program here, which helps you on your way in digitization in the right order.
Successful digital transformations
BCG defines a successful transformation as a transformation that achieves or exceeds all expectations on each of the dimensions mentioned, and moreover does so within the predetermined timeframe. For the study, the strategy consultancy took a close look at 70 of its own projects with leading international companies. BCG also surveyed more than 800 senior drivers around the world. The conclusion? Only 30% of the digital transformations can be called successful according to the BCG standard. These companies, which have successfully achieved the goals of their digital transformation, can rank in the "win" segment. In other words, they can call themselves digital leaders.
Within the remaining group, 40% of all companies managed to derive some value from their transformation, but failed to achieve all set goals and / or achieve sustainable change. These companies may have some concerns and are therefore in the "worry" segment. The last group of companies is in the "woe" segment. They manage to achieve less than half of their objectives and thus fail to achieve sustainable transformation.
The fact that 70% of all digital transformations apparently fail is worrying, especially at a time when digital transformations are not only essential for survival - in view of the economic malaise caused by the corona crisis - but also for entering the new normal ( 'post-corona') to remain future-proof.
Six success factors
According to BCG, there are six key factors that can ensure that the success rate of digital transformations can be increased from the current 30% to up to 80%.
1. Clear vision
The first factor mentioned by BCG is the use of an “integrated strategy with clear transformation objectives”. Or as Tom Reichert, a managing director and senior partner of BCG in New York, puts it, "A clear vision accompanied by a set of strategic requirements and quantified business results that link digital to overall business strategy and sustainable competitive advantage."
2. Committed leaders
The second important factor revolves around ensuring commitment from the leadership, that is, from both the CEO and middle management. Reichert advocates a “bottom-up approach”, in which the CEOs involve all layers of the organization in the transformation. “Without such an approach, middle managers can become a source of resistance,” warns the BCG partner.
3. Digital talents
Digital transformations can also cause uncertainty within the lower echelons of the organization. After all, in many cases digital transformations contain an automation component, which may put jobs at risk.
The BCG researchers envisage so-called “bionic organizations” in the future: organizations where staff and modern technology work hand in hand. The third success factor for successful digital transformations therefore includes the use of high-quality talents. However, not every organization has such talents at its disposal. In fact, according to BCG, only one in four organizations can draw on the right mix of skills needed to implement a successful (digital) transformation. This requires a team of digital experts with the right expertise and mindset to implement change. Sufficient talents are also needed who have, among other things, a hands-on mentality, perseverance, pragmatism, resilience, critical thinking, creativity, emotional intelligence and a flexible learning capacity.
4. Agile governance
The fourth key success factor concerns ensuring an "agile governance mindset" that promotes broader anchoring of the transformation. This requires dynamism, flexibility and a willingness to respond to new obstacles and challenges that arise in leaders. This also requires targeted initiatives to promote an "agile mindset" within the organization - initiatives such as drawing up handbooks and clear operational models.
5. Effective monitoring
As a fifth success factor, BCG points to the importance of “effective monitoring” of the progress, in view of the predetermined results. The preparation of key performance indicators (KPIs), in combination with regular checks that are discussed at strategy and implementation level, can come in handy.
6. Technology and data platform
As the last determining factor, the researchers mention the use of a “business-driven modular technology and data platform”. The survey found that with a view to successful digital transformations, “two out of three digital leaders have invested in such a technology and data platform to support the development and scale-up of their digital use cases,” said Reichert. know.
The six success factors cannot of course be viewed separately from each other. When they are effectively combined, the chances of a successful digital transformation increase significantly - up to 80%, according to the researchers. It is important to consider this, because digital transformations are getting higher and higher on the agenda of administrators and the benefits of a successful transformation are evident. Digital leaders are not only able to generate more sales than companies that have missed the digital boat. They also record higher productivity, deliver a better customer experience, create new growth opportunities, innovate their business models and know how to remain future-proof in today's rapidly changing world.
Learn-work program digital transformation
Two times a year, the Weconomics Certified Program (WCP) organizes a (non-technical) apprenticeship program at the Twice locations, which focuses on organizing a sustainable, digital and decentralized future with a focus on transformational leadership, transforming companies into network organizations, digital transformation, modern organizational science and data technology. It focuses on the design and development of consortia / ecosystems and the implementation of the digital assembly line.
Through this certified program, participants prepare in six months for the role of entrepreneur, trainer, consultant or, for example, transformation lead. The program focuses mainly on perspective change and the design side of network organizations and consists of one day a week of education where, in addition to knowledge transfer, cases are also done and knowledge is exchanged. In addition to education, students carry out projects for organizations or startups. Topics covered include blockchain, rich data, data logistics, internet of things, artificial intelligence, robotics, data science and the digital assembly line.
The WCP started the trial lesson last Friday, March 5 (for the fifth time), the program will start again this Friday, March 12. Both students and organizations participate in this program. Students are students, entrepreneurs, freelancers and employees. This mix makes the program very effective. As a student you follow the curriculum and as an organization you provide assignments that are carried out by students.
The program Learn-work program digital transformation
Read a lot more information via the button. Start March 12 / end July 9, 2021.