Are You Taking the Wrong Approach to Digital Transformation?

In our 2017 report on digital business, we asked respondents how their companies were driving digital transformation. The report groups companies into three different stages of digital maturity — early, developing, and maturing — and we found that each has a different approach to leading digital change. While the distinctions between how early and developing companies approach digital transformation are nuanced, the difference between these less advanced organizations and the companies that have advanced the farthest toward digital maturity is far more striking.

Early and developing companies push digital transformation through managerial directive or by technology provision. In contrast, maturing companies tend to pull digital transformation by cultivating the conditions that are ripe for transformation to occur. This culture-driven, bottom-up approach is one we are actively exploring in this year’s research. Our research to date suggests that the approach many companies are taking toward digital transformation may be misguided.

Mandate From Management

Early-stage companies report that their primary method for driving digital adoption and engagement involves mandating digital initiatives from management. In this situation, organizational leadership decrees the nature of the next digital initiative, and employees are then expected to fall in line. A key problem with this approach is that top-down directives can often be a surprisingly ineffective tool for driving digital adoption.

The academic literature is replete with examples of employees finding various ways to avoid digital mandates when they want to. Responses range from employees simply dragging their feet to actively sabotaging digital initiatives so that they will be unsuccessful. They can also use digital tools in unanticipated ways, which may or may not align with the business objectives managers intend. It can be difficult to foster all of the necessary behaviors to derive the desired business value from digital technology.

Digital leadership requires different approaches than the entrenched command-and-control structures of the traditional company in the manufacturing age. It is similar to what Harry Truman said about General Dwight Eisenhower, his successor to the United States presidency:

“He’ll sit here, and he’ll say, ‘Do this! Do that!’ And nothing will happen. Poor Ike — it won’t be a bit like the Army. He’ll find it very frustrating.”

Likewise, with digital initiatives, when managers simply require that digital transformation will happen, it is unlikely to yield the outcomes one would normally expect in more traditional management environments.