Change Management For Digital Transformation
The pace of change is accelerating at a phenomenal rate in today’s marketplace.
An enterprise’s ability to succeed in this volatile environment is increasingly determined by how well it keeps pace with its competition and the tides threatening profitable performance. The time for a digital transformation is now.
A digital supply chain changes the way your business works. This includes how you work with your customers, suppliers, and partners. Just throwing software into a digital strategy will not work. Business must totally re-engineer their operations and devise digital strategies that bring new value to customers. The dynamics of today’s market thrives on speed. Customers want their orders now and with free shipping. New products are entering the market continuously and product obsolescence is an ongoing event. To keep up with the changes in the market, you need to transform your operations from end-to-end.
This constitutes many changes, not only for operations but for people and processes. The most crucial strategy to the success of your digital transformation journey is the ability to manage the changes that will occur within your organization.
Why is a strategy important for change?
Change management is a process that plays an important role in successful transitions within a company. Whatever the directives of your organization are – to grow, to become more profitable, to become more relevant, to scale, to increase customer service, to position to create higher equity value for shareholders – requires an element of change. Change management requires a cultural shift that needs to take place. Demanding requisite changes and incremental movements to become more effective and efficient to sustain competitiveness.
Companies willing to sign up for a change management program are the ones who are successful. Those that think they don’t need a change management program will not be. These naysayers underestimate the amount of work to be done. They have “always done things this way”. Alternatively, they operate in silos where the C-Suite doesn’t understand what is happening throughout the business.
Many organizations struggle to drive the necessary transformation required for profitable survival.
Germany-based change management and business performance consultant Torben Rick argues that 70 percent of change initiatives fail to meet their target impact for a variety of reasons. Many of those impediments relate to internal dynamics and a failure to effectively craft a strategy that identifies priorities for process transformation:
- 33 percent of change efforts fail because management behavior does not support change.
- 39 percent of change efforts fail because employees are resistant to change.
- 14 percent of change efforts fail due to a lack of adequate funds or resources.
- 14 percent of change efforts fail for other reasons.
Comprehensive Plan or Siloed Approach?
A comprehensive change management plan allows you to look broadly at the enterprise from the top down. It allows you to think about the strategies needed to achieve financial objectives. Ask is your organization aligned or does it require change? Look within the organization and question whether you have the right people in the right roles to help lead the change. Do you have the right process for change in the right sequence? What changes first, what changes second and what changes in parallel? A top-down, enterprise-wide plan should be segmented out in a phased approach in the right sequence of change that will take effect.
The First Step
While there are a variety of change management processes, the first step is to understand that there is a need for change within your organization. Have you experienced an increased shipping volume and having trouble keeping up? Do you have challenges in the omnichannel environment because the customer is in control? Is the competition consistently outsmarting you? Do you need to upgrade your legacy systems to enter the digital age? Did your company acquire another business and you need to merge the two organizations, including the supply chain? Once you determine there is a need for change, then you need to decide what to change first.
Prepare the organization for the change through communication. Tell the organization what the change is, how it will be done, and the role each person will play. It is important to highlight the benefits derived from this change. Create a detailed milestone plan of the change processes. Share this plan across the enterprise, from the top down. When executing the plan, continually update all employees. The process should be continually monitored, comparing measurements to ensure the performance of the plan is meeting its goals.