— June 30, 2017
Digital transformation: more and more businesses are throwing this term around and an increasing amount are talking about its pitfalls. Notable contributors to the Harvard Business Review like Stefan H. Thomke and Markus Hammer have even gone so far as falling just short of discussing the fundamental problem of why high-tech tools alone cannot transform a business. What it comes down to is simple: a business must be ready to change if they are going to adapt a new tool.
According to a post from Hammer and his research team, the effectiveness of a tool to transform operations stems from “how people use [the tool], particularly if they can use it to amplify longstanding skills and expertise,” meaning the best tools help people in an organization do more of what they do best. Additionally, Thomke points out that to make progress in transforming operations, the tool “must be integrated into systems and routines that are already in place.” Thus, if using a tool falls too far outside of current processes, its adaptation will be an arduous process with an increased chance of failure. Charles Duhigg explains in his book, Power of Habit, it is easier to change an existing habit if there is something familiar on the beginning and the end than it is to create a new one.
Transforming a company digitally requires more than selecting a tool that is congruent to the company’s current processes. As Thomke explained, “companies can’t unlock the full potential of new tools unless they find new ways to operate.” Although the new digital tool cannot fall too far outside of the company’s current processes for it to be adapted, changing how a company operates may be required to use a tool to its fullest. Adapting Salesforce is one example of this. Although the platform captures many of the key tasks salespeople are accustomed to (working off leads lists, updating spreadsheets with actions/dates/next steps), teams often find that they need to communicate with each other differently and streamline their current digital communication vendors (ticketing system, email provider, web chat tool) in order to take full advantage of the power the platform offers.
Hammer’s team takes this point a step further, conceding that successful transformation “requires a massive effort involving many changes at once, mostly centering on […] role-modeling of new behavior, the transparency of communication, the fostering of new capabilities.” When we first moved onto a work management system, many employees struggled to log projects and keep the system updated. Adapting the tool took several key people in the organization diligently updating the system and reminding others to do so as well. This fostered communication about how the tool would be used, and led to changes in workflows and processes.
Duhigg lays out a 3-step habit loop of cue-routine-reward, as he demonstrates that the most effective habit transformations occur when the cue and reward phases remain the same, but only the routine phase is changed. Within the context of operational transformation, the “routine” phase can be thought of as “operational processes.” Changing a habit routine, he adds, is only possible when an individual believes change is possible—which often requires the help of a group. An extreme example of this in practice is the brand transformation Domino’s underwent in 2010. In this transformation, they not only overhauled their pizza, but also improved their operations, cleaned up their franchisees, and improved their service. As this relates to our organizational example, operational transformation will be most successful when the operations team has the support of the broader organization.
Successful digital transformation of a company requires more than the latest high-tech tool. It requires a tool carefully selected to enhance the strengths of the team and be compatible to the current processes in place. However, the team must change their operational habits and communication patterns with the support of the broader organization if they are to take full advantage of the functionality and power offered by the tool.
This post originally appeared in CustomerThink