Why Most Digital Transformations Fail (and Three Steps to Fix it)
Digital transformation, one of the longest four-letter words in all of construction. It is the promised shiny beacon of hope to solve all your company's problems, revolutionize operations and make you look like a genius in front of your peers. Except…it usually doesn’t.
The fact is four of five digital transformations fail. Well, they don’t just fail, they fail spectacularly.
But then there’s the one in five that delivers on the promise and elevates your systems, your controls and your people to a new level of operational efficiency.
So, how do you ensure your company is the one?
To answer that, let’s look back at how things got off track.
The Need for Apps
Stop me if you’ve heard this business phrase before, “Growth solves all problems.” I mean sure, growth creates opportunity, revenue and new projects to chase. But growth can also cause chaos, especially if you don’t have systems or tools in place to support that growth.
Often times it’s growth that precedes digital transformation. Suddenly, you’re dealing with bigger projects, larger teams and more moving parts in a way that email and spreadsheets can no longer support. Suddenly, everyone is left scrambling for shiny new technologies to fill the gaps.
I vividly remembering sitting in a meeting with one executive while they adamantly exclaimed, “We need apps!”
Me, being the curious type, asked for a bit of clarification, “Ok, what kind of apps?”
Executive, obviously frustrated with my silly question, returned with, “You know, apps. We need apps for our people. They want apps.”
Honestly, you’d be surprised how often this happened.
In the end, the executive would get their apps and their people (you know, the ones that allegedly wanted them) would resist changing their ways. This would lead to “shadow IT,” and mountains of side spreadsheets, again.
The problem with this mentality is it looks at digital transformation all wrong. They get all caught up focusing on tech first, instead of following a logical order.
One: Digital Transformation is about People
Construction is a people business, first and foremost. Because of that, your people can be the heroes (or villains) of your digital transformation.
In a perfect world, everyone’s role in your organization would be crystal clear and they would be bought in on the mission of transformation. In reality though, roles are ever changing and your top talent always seems stretched thin.
The biggest mistake companies make with people is throwing random folks at the transformation just because they’re available (or underperforming).
On my first major transformation attempt, we learned this the hard way by grabbing folks who, frankly, weren’t exactly the A-team. Yeah, it didn’t go well. After more than a year of struggle, it would take a significant team rebuild to move forward.
The most effective digital transformations begin with choosing the right champions. I’m not talking about the loud exec that’s going to brute-force people to adopt tech, I’m talking about influential up and comers that have a little tech-savvy in them. Respectable-type high achievers.
And you’re going to have to live without them on projects for a bit. On the second major attempt at transformation I was a part of, we tried making this a 20% role for top folks. As you can imagine, the projects they ran always took priority. This sort of thing can’t be a side hustle that gets quickly cast aside, this has to be dedicated support that’s building your future.
Because with these champions in the driver’s seat, employees begin to see the benefits of a transformation. They see what’s in it for them. That’s when real buy-in begins.
So, people are step one. What then, is step two?
Two: Time to Get Lean
Again, if the world were all sunshine and rainbows, your company processes would be lean, logical and clearly defined. No duplication, no manual effort, just Six Sigma as your middle name. But, if you’re anything like we were, that isn’t the case. What is much more likely is a Frankenstein conglomeration of quick fixes, legacy bad habits and no one knowing why they do things the way they do.
The infamous “We’ve always done it that way” has become your purgatory.
Yup, I was there too. We had a glorious process in place. If, that is, you thought counting 30 mandatory documents per approval gate was “glorious.” Oh, and there wasn’t just one gate. No software on the market was going to meet these requirements. But there’s good news - you have yourself a team of influential, dedicated champions. Put them to work.
First and foremost, question everything. Is this step necessary, is it simply leftover bureaucracy? Are we bottlenecked by a lack of flexibility in our approvals? Or the worst of all process issues, is this step due to a current limitation of our antiquated technology? Spend time looking for the most time intensive tasks and researching the ability for automation.
And for goodness’ sake, forget the phrase “we’ve always done it this way.” Wipe it clean from your vocabulary.
Which brings us to the final step.
Three: Tech the Enabler, Not the Savior
That’s right, we’re finally ready to talk about tech. If we were living in nirvana, our tech would already align perfectly with our business needs, systems would run out-of-the-box, people would be fully trained and data would be freely flowing.
People would ask you what makes your company different, and you’d say, “Our technology is our greatest asset.”
You guessed it - wrong again. I mean, that’s why we’re here to begin with, right? If your tech were so great, you wouldn’t be reading about how to lead a proper digital transformation. Instead, you are likely to relate to our executive friend from before. You bought apps for the sake of apps, received little to no training and now have five different point solutions all with a different answer to the project’s actual budget.
Again, I get it, technology is the fun part. It’s easy to get carried away and adopt the shiniest (or most popular) tool on the market. But without the right people and processes in place, you’re just throwing mud at a wall and hoping something sticks. We learned this the hard way too, when our in-house development team pushed for and selected an ultra-customizable system, against end user wishes. Surprise, it never worked, and people hated it.
In hindsight, we should have listened to the people.
The people knew the priorities. Thanks to their efforts getting to know the business needs and their work weeding through the mess of processes, they understood what was important. The people knew where to automate for the biggest bang, where to customize to drive consistency and simplify to enhance efficiency.
But most importantly, the people knew that tech should enable the future, not dictate it.
The Order of Operations Matters
So, why do most digital transformations fail? Because companies get things out of order, or worse, they do it completely backward. They pick the technology first, then scramble to cram their processes into it and finally shove it out to their people.
Bring yourself back to 7th grade algebra for a second and focus on the order of operations. The correct order is people first, then processes and then technology.
Like I said, I learned this the hard way (multiple times). In fact, I wrote the original outline for this blog in late 2019.
But once we finally got this order right, things really started to click. The people embraced the change, the processes became leaner and the technology actually added value instead of chaos.
You see, digital transformation isn’t just about upgrading your software; it’s about transforming your entire way of doing business. Get the people, process and technology mix wrong and you’ll end up in the vast majority. Get it right and you’ll be the one.
Construction is cool, tell your friends!