In the last month, three reports* on the state of digital business transformation in Australia and New Zealand (ANZ) indicate the shift is proving challenging for organisations Down Under.
Key numbers from these reports include:
Only 17 per cent of ANZ business are transforming to meet business objectives versus an average of 22 per cent globally
Only 58 per cent of NZ CEOs are personally prepared to lead their organisation through a radical transformation vs 71 per cent globally
Business leaders have experienced a 60 per cent drop in confidence around their ability to prepare for disruption
Only 10 per cent of large organisations in Australia are transforming their business model, and only 8 per cent have scaled a digital business.
All three reports paint a similar picture – business transformation being hindered by fear and a lack of executive confidence, both in the ability to implement transformation and in the likely benefits.
Fear of transformation
The most common fears experienced around transformation include a fear of making mistakes, fear of wasting money, fear of bad publicity, a fear of not having all the answers and a fear of feeling out of your depth.
Executives are caught between a rock and a hard place – fear of being disrupted by more innovative organisations, and the fear of implementing the transformation needed to handle this disruption.
The result is either inertia, or a shuffling of the deckchairs before the ship goes down.
What is fear?
At a base level, fear is an emotional response to a perceived threat. The opposite of fear is trust, and psychologically speaking, trust is simply the mitigation of risk. De-risk the transformation process, and you begin to remove the fear.
Given all three reports emphasise the importance of transformation to future survival, how do we remove, or at least reduce, fear from the process?
Here are four practical actions business leaders can take:
1. Start with small and valuable
Proving the value of transformation requires runs on the board. Identify a small, low-risk project that will provide significant value to a large group of people. Bring together a team who can deliver using new ways of working and demonstrate the speed and effectiveness of this new approach versus traditional methods.
A classic example is the UK’s Government Digital Service (GDS). Regularly cited as a case study in how to implement transformation, one of their first tasks was making it easier to answer a search query that was asked millions of times of year, but had no single source of truth - when is the next UK national holiday? Not a difficult problem to fix, but a valuable one. As they’ve since said, “Fix it and fix it well. People notice.”
2. Remove the execution gap
To achieve transformation at scale, your organisation must think and do at the same time. Rapid prototyping, failing fast – whatever you call it, the key is to develop a process for swift, simultaneous planning and delivery.
The goal of this approach is to remove a common obstacle - the strategy-execution gap. It doesn’t exclude strategic research and discovery, it just reframes it. Your prototype becomes your research; your testing of a customer hypothesis, your discovery, and so on.
By taking this approach, the business quickly gains a valuable proof of concept, de-risking future investment and instilling confidence in the transformation process.
3. Invite diverse viewpoints
The old adage that ‘good ideas come from anywhere’ holds true for transformation.
Your transformation team should invite input from a diverse range of roles and functions across the business. This is especially true in organisations where one particular team or skillset has traditionally been responsible for problem solving. Viewing problems through only one lens narrows the potential range of ideas and solutions.
A common approach is to establish a cross-functional Centre of Excellence, where representatives from all business units have a seat at the table. They engage with their teams to gather feedback and ideas around transformation, ensure clear communication of initiatives and troubleshoot potential issues ahead of time.
4. Focus on the familiar
It’s often said that transformation is not a technology exercise, but a people exercise. Fear of change is not exclusive to the executive - employees and stakeholders will undoubtedly feel anxiety and concern.
This can be overcome by focusing on the familiar. At each stage of the transformation, at least early on, highlight existing factors that will remain the same. While it might sound counterintuitive, giving people a familiar branch to cling on to reduces the fear of being overwhelmed by change.
The end result of transformation may be that nothing previously familiar remains. However, an incremental approach, combining the old with the new, will give people time to absorb, and adapt to, new ways of working.
* Infosys Digital Acceleration Study / KPMG CEO Outlook / Gartner: DBT In Australia
Kevin Fitzsimons (kevin.fitzsimons@solnet.co.nz) is a senior business transformation consultant for Solnet Solutions in Wellington.
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