It’s not just about technology. Digital transformation is about people. David Plummer

However, less than 20% of large companies succeed in their digital change initiatives. People are at the heart of this statistic. This is backed up by our 2020 Digital Benchmarking Report, which provides a snapshot of digital maturity in the UK, based on the responses of more than 450 employees from leading asset owners and operators to our Smart Infrastructure Index. The report shows that although digital maturity had improved by a fifth (for those who had completed the index the previous year), many employees aren’t developing the skills and work practices to keep up with the pace of technological change, creating capability gaps that will become increasingly expensive to close.

We worked with leadership and behavioural change consultancy Lane4 to explore the people-side of digital transformation, talking to 10 digital leaders across four infrastructure owners/operators. All agreed that while investing in technology is one thing, embedding new work processes and ensuring all people are invested in the change programme requires skilled leadership. It is people’s inability to adapt that prevents transformation and damages many businesses.

Tackle the barriers to progress

Our work revealed three major barriers that digital leaders need to watch out for:

1. Perception of digital transformation as ‘an IT issue’

IT is crucial, but if digital is only seen as ‘an IT issue’, then many people will think of it as something their IT department has to implement, with no sense of collective responsibility in driving change. Clearly defining what digital transformation means for the organisation will help all employees understand its relevance to them.

2. Lack of visible digital role modelling

When leaders only superficially support digital initiatives, then it is difficult for new behaviours to trickle down to others in the organisation. Leaders have to be authentic in championing change.

3. Resistance to change

This manifests in four key ways:

• Belief new system won’t work: Some may believe that the digital change programme will fail anyway, making them reluctant to adopt new behaviours. While culture change is always difficult, leaders need to build trust by showing how new technology delivers on promised benefits.
• Fears for job security: Leaders should reassure people that their expertise is valued, while being transparent about the impact of change and dispelling misconceptions.
• Attachment to existing work practices: A tendency to ‘stick-with-what-we-know’ can stymie adoption of new technology or new behaviours, even when the benefits have been shown. Strong negotiation skills and emotional intelligence are required to shift people towards new practices.
• Resistance to outside solutions: People have strong team, company and industry loyalties, making them resistant to ideas, technologies and processes ‘not-invented-here’. It is important that people are helped to feel like they own the solution, and that their reservations are heard and addressed.

Six tips for digital leaders

Based on our conversations with digital leaders, these are the biggest tips for those hoping to drive change in their organisations:

1. Focus on ‘the why’: It’s easy to focus on the what, especially if it involves new technology. Digital leaders should never lose sight of the ‘why’, making clear the benefits that digital transformation will have on business performance.

2. Show people how they’ll benefit: Demonstrating personal as well as business advantages fuels enthusiasm and confidence. Leaders should also ensure they recognise and reward success as people make progress on their digital transformation journeys.

3. Co-create the transformation: People don’t like to feel that change is being ‘done to them’. Digital leaders need to listen to people’s needs and feedback, actively co-creating the change so everybody has ownership.

4. Provide a crystal-clear narrative: Leaders need to develop a clear communications strategy so everybody understands: why digital transformation is important; what it means for their part of the business; the benefits of digital solutions; and what they personally need to do.

5. Provide structure: It’s easy to assume that change will happen organically once the technology is rolled out, but this will result in digital transformation that is not linked-up across the organisation. Leaders need a structured and co-ordinated approach to mobilise the entire business.

6. Develop digital skills and skills for digital: Digital skills such as data science, machine learning and cyber security must be complemented by the skills everybody needs to make digital transformation successful. These include hard skills such as digital literacy or soft skills such as the ability to innovate, experiment and communicate.

Our collaboration with Lane4 has shown that while investing in digital solutions is important, a technology-centred approach is doomed to failure. Leaders must place people at the heart of an organisation’s strategy to achieve success in digital transformation, enabling them to deliver improved social and environmental outcomes.

Read: The people-side of digital transformation: lessons from infrastructure