• The psychology of business transformation - Critical research reveals what SMEs are really interested in

The psychology of business transformation - Critical research reveals what SMEs are really interested in

23rd May 2016

Prepare for digital transformation and ensure employees are on board.


It is no easy feat to change a business.

Startups operating in the current business environment have an advantage: drawing from a pool of talented, young, digitally native workers leads to an inherent understanding of technology. For older small businesses, however, or for those that have operated for about a decade, such transformation is difficult to manage.

While many businesses focus on technical aspects of changing their business, such as installing new systems, signing up to cloud software and shifting the function of IT within the business itself, these efforts can fail if not executed correctly.

A successful transformation begins with your staff

According to research conducted by Canon, 78% of businesses said they were interested in improving employee experience when it comes to digital transformation – that’s well above the 55% of businesses which opted to focus on customer experience instead.

Canon Australia Head of Customer Marketing Nitya Padman says the result on employee experience is because businesses realise they need to transform their processes and workflows if they’re going to attract and retain young talent.

“Employees are a critical part of the transformation process, if employees aren’t on board it’s very hard to change processes and practices. The study shows 47% of businesses feel change management is a barrier to digital transformation and successful change hinges on employee experience.”

There are several barriers businesses can face in this regard. For instance, employees who have worked within one system for a significant amount of time may be resistant to change, especially when it comes to new processes that disrupt traditional workflow.

But lack of strategy from leaders is also a problem. According to research from MIT and Capgemini, “lack of urgency” or a “burning platform” was cited as a barrier, and the survey found only 36% of leaders have cited a vision for digital transformation with employees.

The research also reveals that 93% of employees agree digital transformation is the right thing right now for their companies to do, and 73% strongly agreed.

“The big difference between the companies that are just doing technology initiatives and the companies that are leading a technology-based transformation is how they’re putting the leadership frameworks in place,” MIT’s George Westerman was quoted in the research as saying.

Here are some ways your business can prepare for digital transformation – and ensure employees are on board.

Digital transformation starts from the top

As much as employees need to come on board with digital strategy, CEOs have a role to play. According to the 2015 PwC CEO survey, 86% say a clear vision of how digital tech can help achieve competitive advantage is key to success – and 83% say it’s equally critical for a well thought out plan.

According to the MIT survey, only half of organisations create business cases for digital investments.

Transformation comes from the top – and it needs to come with comprehensive business strategy.

Getting the staff on board

Digital transformation is more than just adopting new tools. It’s about ensuring staff at all levels have digital skills and beliefs in how they do work. This means managers have a responsibility to pass on the digital strategy designed by the CEO to the rest of the business.

Roland Berger CEO Charles-Eduard Bouee wrote in the Harvard Business Review that the company’s study on French companies found that while nearly six in 10 French people shopped online in 2013, only one in 10 French companies sold online that same year.

This means there is huge digital opportunity among staff, and skills that are not being tapped into.

When it comes to engaging staff, many are ready to be engaged. They just need to be given the right projects, and the ability to experiment, work together, and find new digital solutions. Enabling workers to adapt digital processes into their natural workflow is a good start.

Link performance to digital transformation

There will always be those who need to be coached along the journey. But businesses can make it easier for themselves.

Getting buy-in means changing the way employees are judged. By attaching KPIs to digital transformation, along with brainstorming sessions and other activities, such as identifying staff to help spearhead new initiatives, transformation can become a cultural effort.

According to PwC, small businesses that have high-levels of digital engagement have better business outcomes compared to those with lower engagement, “with some studies suggesting a 20% increase in annual revenue”.

Businesses need to ensure their digital transformation isn’t just about IT services – but about adoption at all levels of the business.

Find out more about how digital transformation is changing the way SMEs work.

This article was originally published on Smart Company, and has been republished with permission.

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