“When digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.” – G. Westerman, MIT
George Westerman gets right to the heart of the dilemma of digitalization: When it succeeds, it unlocks tremendous business potential. But if it fails, well-intended programs can cause severe damage to the entire company.Digitalization programs are usually high on the agenda of top management. Careful attention as well as abundant financial, human and technical resources are available for programs managed in an agile or hybrid way. Nevertheless, many digitalization programs fail.
Failure is often caused by cultural challenges: different ways of working associated with digitalization clash with traditional operations, and new digital solutions are rolled out across the entire company without proper business involvement upfront. Employees all over the company feel insecure as they face great uncertainty about changes and new requirements in their work. The feeling of being neglected and the diminishing importance of existing skills and capabilities reinforce a negative attitude towards digitalization.
To properly address the cultural dimension, change management needs to be incorporated into every digitalization program right from the start. Three aspects are critical in this effort:
Drive change management from the inside out
Four elements of change management need to be driven from within the digitalization program out to the entire organization: convincing, enabling, role-modeling and reinforcing. These elements support the whole company in its digital transformation. Convincing means reaching all stakeholders with a consistent change story and communication activities. A well-realized competence building program enables all employees to cope with changes in their work and the work environment. Change agents serve as role models who spread the digital mindset. To reinforce change, co-creation of new processes and the empowerment of employees are crucial. Keeping track of change with KPIs integrated into regular controlling makes progress visible.
Integrate change and program management into a holistic approach
Coherent communication provides clear guideline for employees. While program management in digitalization usually mixes agile and traditional approaches, change management builds upon, supports and reinforces program management actions. To integrate project and change management, the PMO acts as the central coordinator of change management in addition to its traditional role in program management.
Select the best change approach for each program step and ensure continuous development
Right at program start, a detailed program and change management roadmap needs to be developed to provide guidance on program elements and related change initiatives throughout the whole effort. Based on the chosen program management approach, appropriate change management actions need to be determined. During program conduct, the integrated roadmap needs to be continuously enhanced based on program requirements, impact assessments and qualitative stakeholder feedback
To generate tangible impact through digitalization programs, an integrated project and change management (PCM) approach has proven effective. In a nutshell, effective digitalization requires continuous and integrated project and change management radiating from within the digitalization program out to the whole company or – in George Westerman’s words: “a caterpillar can only transform into a butterfly when it doesn’t hesitate to change to its core”.