Seven Rules For Digital Change

Aside from thoroughly answering the most basic question of digital transformation - why are you doing this? - these are my 7 most important rules to follow before making the big leap.

1. Change is not a project

Organizational change will never fully come to a halt. There may never be a point where an organization finds a status quo that does not lead to stagnation - and this is to be celebrated. Constant change is typically a driving factor to long-term success, and how well it is managed can be a reliable gauge of the strength of an organization's leadership.

Internal resistance to change is one of the top 3 reasons digital transformation projects fail to meet their budget and timeline goals (the other two are unclear project goals and unprepared management). Employees have reason to resist: statistically, over 50% of digital transformation implementations experience operational disruption when they go live. How can we prepare employees for such a fundamental change to the work processes that have become so familiar?

Setting appropriate expectations, articulating goals, and acknowledging challenges before they occur in the workplace are leadership practices that go beyond digital tools - they must be cultural norms. The role of a leader is to guide organizations into the future. Great leaders must necessarily be visionaries of a future they are striving to achieve. What could be more exciting than a brighter future? This is an essential quality of great change management: that for the majority of the organization, the prospect of it feels exciting rather than exhausting.

So it falls on leaders to be the principal champions of change at every stage of their organization's development. Any change project, from this outlook, is just one large step on a continuous path - one that certainly doesn't end with a Go-Live date. As an implementation morphs from a project to an ongoing program, with its needs for ongoing support, adoption and evolution, the vision of organizational change can be the steadying force, the constant.

2. Standardize before you automate

One of the most widespread misconceptions about digital transformation - one that many software salespeople are all too happy to proliferate - is that the implementation of new digital tools will be a 'magic bullet' that will resolve all manner of process woes with a few strokes of a keyboard. Only those who have been deep in the trenches of digital transformation, especially within large and diversified organizations, can truly understand how far this notion deviates from reality.

Digital transformation is not a software project. The software implementation is a component of the project - it will consolidate tasks into a common language and interface and automate certain aspects of the work, but what it will not do is define the business processes behind those tasks. That is always up to the organization. What invariably happens during new implementations is that many of those business processes - as well as their related databases - require re-organization, re-definition or, sometimes, complete rebuilding before the software solution can accommodate them in a consistent and meaningful automated process. This gets to the root of why so many implementations fail to accomplish the organization’s goals.

The often-used term ‘Enterprise Resource Planning', or ERP, is itself misleading - in many cases the 'planning' component is left to the business to resolve during the implementation process, having been unprepared for the degree of process change and data cleansing required to standardize their automated system. Often, this means resolving process and data inconsistencies over a period of 2-3 weeks, as this is typically the window between the vendor's first discovery session with the business and their deadline for starting the technical design, which is where configuration changes start to become more and more costly and difficult.

A recurring example is HR recruiting processes. Do you have all of your employee job descriptions defined? Do you have clear delineations between part-time, full-time, seasonal, temporary, contingent, unpaid and contracted employees? If not, you'll need to resolve these concerns before an ERP system can automate your hiring processes and not leave you with a cumbersome number of manual workarounds. If you are resolving these concerns during the implementation, your Subject Matter Experts (SMEs) will often find out on Friday that an answer is needed by the following Wednesday. And recruiting is one of the simpler examples; the complexity can ramp up very steeply for modules like payroll, benefits, supply chain and any of dozens of other processes that your organization might depend on.

Often, the intimidating thought of standardizing these sorts of processes can prevent organizations from taking the time needed to get them right before contracting a vendor - electing instead to force the organization into rapid change, relying on the vendor to facilitate standardization instead of fully taking stock of the organization's preparedness. The planning component is shortchanged. For organizations who see digital transformation as a necessary solution to organizational inconsistency and untenably disparate processes, the planning component is most vital and will take the longest - potentially a matter of years. In these cases, investing in understanding organizational health, uniting your departments in goal setting, and planning thoroughly for change will prevent much larger expenditures on system changes, timeline delays and employee burn-out down the road.

3. Strive to understand the system better than your partners do

Understanding which software is best for an organization’s workflows is often a project in itself - wading through RFPs can seem like an endless and confusing process for leaders who have never navigated a single interface page in SAP, Salesforce, Oracle or any of the other dozens of options available.

The diversity of scope, capabilities, strengths and weaknesses of each platform mean that some options should be a non-starter, while others should merit close inspection and a detailed breakdown from the vendor as well as the implementation partner. At every step, having impartial expertise on your side is critical to planning and decision making. This can be a consultant, but wherever possible I recommend planning for the budget and resources to hire long-term expertise into your team - and doing it well before you need decisions made.

Don’t expect your resources to be expert in everything. The objective of an impartial resource should be to learn your processes, understand your specific constraints, and navigate the process of selecting a solution and a vendor with specific questions in mind. What is the focus of the business? What is the future growth strategy? How diversified are you? What regulatory or negotiated constraints do you have on your workforce, your products, or your practices? And what are you really trying to achieve with your solution? What specific deliverables will the vendor be responsible for at each stage, and how will the business be involved in their delivery? How does the vendor allocate their technical resources for projects, and what components of your project require the most attention? You need the time to filter that long list of concerns in your head into a comprehensive set of questions that a potential vendor can be accountable to answer. It’s very hard to do this without an experienced collaborator who is there to help you make decisions, not sell you on a solution.

4. Plan for downtime

If there’s one thing digital transformation projects are notorious for, it’s employee burnout. Even if you are only planning a relatively simple CRM replacement, remember that a six month project can seem endless for employees who are required to immerse themselves the process of being SMEs and analysts. Nearly every transformation project requires people who are expert in their areas to work off the side of their desks on advisement, testing, training development, and frequent alignment meetings, while also fulfilling their roles within the day-to-day business processes. This often means that your best people cannot give 100% of their focus to either one, and end up feeling sapped of energy, pulled in multiple directions, and constantly booked up with meetings.

Although it can look like a waste of budget dollars at first (since vendors tend to charge according to project length, where their employee hours follow a tight schedule), building in time for your team to take much-needed recharge breaks is vital to not only their ability to work well, but also your ability to retain them for the long term. Some suggestions: a sizable summer vacation for the whole team, extra time during holidays, and a reset period in the middle of the project when you can take stock of your progress together and clarify any planning changes without the pressure of immediate deadlines.

5. Step up your recruiting

Let’s make this clear - you need professional help with your transformation project. The people who manage your business portfolios, your data analysts and your tech team all need to have expertise that you can count on. The problem for many organizations is that finding experienced people who fit the company culture, adapt quickly to changing needs, and can contribute to the organization for the long term are rarities at any price.

Ensure that your organization plans for this. Recruiting teams may not be familiar with where and how to find appropriate expertise, what a competitive salary looks like, or which roles require long-term stability instead of project contracts. Ensure you understand how much of your data will be cleansed, validated and migrated into the new system, where that data is coming from and who can speak to its accuracy, so that you can hire data experts where you really need them. Ensure in your vendor negotiations that you understand clearly what technical areas you will be responsible for, how security and permissions will be managed, and how much specialized support will be needed over the long haul.

6. Budget for big changes

There has probably not been a single digital transformation in history that met all of its schedule, budget and scope targets. Change projects are inherently subject to change, and often at short notice. There is no limit to the number of technical, resourcing, configuration and data management events that can occur which can have significant budget implications.

What happens if you are supposed to test the system on Monday but you have a critical data load failure on Friday? What happens if your project lead resigns? What happens if your SMEs missed a showstopping detail in the configuration? And by the way - what happens if your vendor is late with deliverables?

Understanding the true limitations of your budget will help with contingencies down the road. It is always advisable to rein in the scope of a project if your initial budget is right on the limit of what you can afford. You will almost definitely spend more.

How much more depends greatly on your due diligence - how well you verify, anticipate and plan for risk. How precisely you define project deliverables and objectives, how thoroughly you audit your vendor for accuracy of their claims, and how clearly you articulate your objectives - these things go a long way toward mitigation. In the end, though, there are always unknowns; I have heard some ERP experts conclude from difficult experiences that budgets should account for a doubling or even tripling of costs during implementation. If due diligence is followed, that level of risk is greatly reduced; even so, I personally recommend a minimum contingency of 50% of the allotted buget. Think of it as a big bonus to the organization if you don’t have to use it.

7. Make better communication a program in itself

Have your employees ever told you that you tell them too much?

Perhaps the most common fear around communication is the risk of misinterpretation. Your people are not a homogeneous group, and you shouldn’t expect them to react as such to new information. The potential disparity in how your employees read your emails and announcements, and the potential spread of misinformation, can be daunting.

Setting clear expectations takes time and effort. It requires transparency - about risks and difficulties, about uncertainty. It requires a listening ear. Preparing people for change is a key component of strong leadership, and that preparation is an ongoing engagement. It is a program in itself.

During change implementations, there are many stakeholders, many activities, and many nuanced aspects of the change that, if not properly communicated, can lead not only to confusion but to problems in the implementation that can be difficult to resolve later. Practicing and iterating on communication strategies, testing them out, receiving feedback from your people, and iterating again can be immensely valuable when planning for change. It is also critical throughout this process that the ownership of the communication chain is crystal clear.

The media you use to communicate, the frequency of communication, the source of information, the audience it's communicated to, how communication is documented, where documentation is stored in your systems - all these aspects require a landing point that you can rely on as your process for communication. It will invariably be an evolving process, as you improve your understanding of what you need, what your people need, and how to capture it in a meaningful and reference-able way.

Keep in mind the small details - how you yourself respond to requests to chat, how you respond to criticism or praise, and how you resolve concerns or questions all have an enormous impact on the perception of stability within any project. Communication is a part of every exchange, no matter how small, how technical or how formal, and this is why the details matter so much - because there are no details until they are communicated.