Why do most business transformations fail?

9th July 2019, by

Should we blame poor technology adoption for transformation failure, or is there more to it?

Adoption is the act, or fact, of choosing to take up, follow, or use something. It is a value-based discretionary behaviour.

There is no doubt that technology is changing the way we do very many things. Whether this is in our personal lives, or at work. As organisations we are investing in digital technologies, often on an ‘as-a-service’ subscription model basis. These investments are to drive organizational change; to do things better – or completely differently; to improve performance. To create, and deliver net new forms of value. To do more, better, for less.

We talk about the need to adopt the technologies we are investing in. We understand this is necessary to make change happen; to transform. However, depending on the research work subscribed to, we also know that transformation failure is huge. The reported change effort failure rate ranges from 60-80% with the World Economic Forum (2018) stating a failure rate as high as 84%. What’s really interesting is that there is little or no improvement in the rate, over time.

So why is this? Many organisations are incumbent in their industry. They have done what they do successfully, and often for a long period of time. They understand traditional competition and have business, operating, and organisational models that support how they have done business, and how they have competed, previously.

The world around our organisations is changing, established players are experiencing non-traditional competition, from non-traditional competitors. In terms of disruption, no company is immune, irrespective of industry, age, or previous and current success.

So, with this in mind we accept we must transform, and we know this cannot be achieved with legacy technology. We know we need to invest in new technologies and that we must activate the licences we invest in and adopt the technology to achieve the required business outcome; to derive value; to innovate; to be competitive; to survive.

Successful technology adoption is hard, but it is not the only, or even the most significant challenge. It is one part of the transformation equation; but it is not the single point of transformation failure. When we talk about legacy we need to think beyond legacy technology and consider the other forms of legacy we have in our organisations; legacy business, operating, organisational and change management models. Perhaps even a ‘legacy culture”. To orchestrate successful transformation, we need to think way beyond just the technology investment and adoption.

We need to shift from these legacy models. We need business model innovation; to create agile operating models; to design and instantiate new organisational models that foster the capabilities of a culturally diverse, multi-generational workforce. We must allow all of our people to contribute; bottom up, top down; and sideways in. And we need to accept that traditional change management is not up to the task.

So, whilst we know that digital business transformation requires the investment in, and adoption of, digital technologies, we must acknowledge that successful transformation involves much more than technology alone. It requires an orchestrated approach that takes account of all the forms of legacy we have in our businesses today, an approach that challenges how we have done things in the past. It requires levels of agility we have never needed previously in order that we have the capacity to keep changing. It requires a culture of inclusion.

How well geared is your organisation for transformation?

Ali Hawksworth

Ali Hawksworth

Envisioning lead and Future of Work visionary for Adoptt. Identifying and resolving the big workplace problems that are ‘hiding in plain sight’. Preparing and equipping the leadership teams of partners, customers and vendors to survive and thrive in a world of digital disruption.

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