The turning-point for de-risking the people-side of digital transformations

Marcel Wilson
Jan 7
A critical turning point for leaders in de-risking their company's digital transformations is the realisation that their workforce's low role efficacy mustn't be ignored.

Given that 84% of digital transformations fail, the case for de-risking is stronger than ever. In this Human Sparks Insight, we reveal the turning-point in de-risking the people-side of digital transformations.

Digital transformations involve people at all levels of a company’s value-chain. This includes leaders, functional teams, suppliers, stakeholders etc. All these people are required to participate effectively throughout the transformation. However, despite individuals being high-performing during regular more stable times, research shows that 75% of the 84% of failed digital transformations didn’t realise their intended value because of people’s low role efficacy. This refers to people’s inability to perform their role effectively. In other words, people who do their job well during stable times, don’t necessarily participate effectively during digital transformations.

Organizations who take people out of their operational roles to participate in digital transformations find that during a digital transformation, role efficacy ‘dips’ then returns to an acceptable level when ‘things get back to normal’. As part of Human Sparks’ work in de-risking digital transformations, we observe this same pattern over-and-over again. People who are regularly, during stable times, effective contributors become ineffective during a transformation. Why is this? It isn’t that individuals involved are ‘against the changes’ or that the changes themselves are poorly designed. The reason is that people don’t know what is expected of them; or how to perform their role effectively. The bottom line is that these people exhibit low role efficacy and it ‘hurts’ their company’s digital transformation outcomes!

A dip in role efficacy during a transformation is an unwanted risk. Those who have observed ‘the common people issues’ that plague digital transformations often blame ‘culture’. It’s so common that this fickle and seemingly uncontrollable aspect of organizations is viewed by many who work with digital transformations as a key, yet illusive enabler.

What most leaders don’t realise is that getting their people to play an effective role during digital transformation isn’t something that can be fulfilled by the person on their own. The reason for this is that people’s existing professional judgement is insufficient. Without prior experience, they don’t know the criteria by which to assess and improve their own performance. In other words, the professional judgement they use during stable times must be augmented with outside sources of information and feedback that supports the context and goals of a digital transformation.

This new information is outside of what someone can be trained as it may relate to the specific situation or context they are working in. Our professional judgement on its own is entirely suitable for making decisions when working on reasonably simple tasks or static goals such as projects. However, when working on complex dynamic goals such as digital transformations, without outside sources of information to augment our professional judgement, we are likely to repeat mistakes. A lack of this vital information hinders even the most capable professionals in making effective decisions and further compounds this issue and cost of low efficacy.

A critical turning point for leaders in de-risking their company’s digital transformations is the realisation that their workforce’s low role efficacy mustn’t be ingored.

What could be any more frightening to executives than the idea that their ‘expensive workforce’ is filled with people who don’t know what they are doing?

Too often, digital transformation teams are entirely reliant on the knowledge acquired as part of their original training or functional expertise used in their day-to-day operational roles. People’s over-reliance on their professional judgement is contributing to the risk of low role efficacy during digital transformations. Low role efficacy can impede the forward progress of digital transformations, waste resources and undermine overall objectives.

Executives are often quick to identify the people issues inherent in their digital transformations, but they are usually unaware of the link to insufficient access to information leading to low role efficacy. On the surface, we can put all the ‘people problems’ under the banner of culture, but in practice, executives require specific implementable ways to address the problem.

Keep reading Human Sparks Insights to find out how to address low role efficacy during your company’s digital transformations!