Technology is only part of a successful digital transformation journey
Brian Devlin, Industry General Manager, TechnologyOne
In these difficult and uncertain times many property organisations have or are currently accelerating their digital transformation aspirations. However, only those with a mindset for continuous change – and a culture that enables this process from the top – will ultimately succeed. The very name signals the level of commitment required – you can’t transform people, processes and technology without shaking things up. Forging a path toward business performance improvement through digital transformation takes time, focus and a substantial mindset shift.
Leading research firm IBRS found that the property industry is lagging behind other sectors when it comes to developing roadmaps for digital transformation. The 2019 State of Enterprise Software report suggests that innovation is generally low on the agenda for property sector organisations and additionally observed that there is little business involvement in ICT decision-making coupled with a distinct unwillingness to move to a SaaS-based model.
There is a distinct danger in maintaining an ‘if it ain’t broke, don’t fix it’ mentality, particularly when considering the ever changing and increasing impact of COVID-19 related market disruption. This disruption has the potential to create long-term structural and financial havoc in industry sectors where established members simply don’t react fast enough, under-estimate the potential impact, or are not in a position to react.
Develop a digital culture
According to Boston Consulting Group (BCG), organisations that focus on developing a digital culture are five times more likely to achieve breakthrough performance in digital transformation than those who neglect the cultural aspects.
Developing a solid digital culture starts at the top and is impossible to achieve without the support and efforts of the CEO and senior business leaders. According to BCG, there are five key imperatives for organisations seeking to develop a digital philosophy.
- Encourage employees to look outside the business and engage with customers and partners to deliver new solutions
- Value delegation above control and disperse decision-making ability across the organisation
- Develop an environment that rewards boldness, encourages employees to take risks, fail fast and learn
- Do more, plan less and practice fast and continuous iteration
- Value collaboration over individual effort and encourage interaction with transparency.
For most organisations, those imperatives represent a substantial cultural shift. Conventional wisdom has us believe that humans naturally resist change, whereas reality suggests otherwise.
If we instinctively shied away from transformative innovations, then uptake of new technologies such as smart phones would be considerably less than the 76% (median) ownership rate achieved in the world’s advanced economies in less than a decade. Humans don’t resist change, but acceptance does require an understanding of the benefits that change brings, making clear articulation of transformation plans, objectives and advantages a priority.
How do you change culture?
BCG has identified the three key steps for an effective cultural change.
- Articulate the change required – this is a multi-staged process that requires clarity and internal assessment. Business leaders must identify the characteristics of the desired digital culture based on the company’s strategy, goals and purpose. Articulated in unambiguous language, those characteristics are then translated into specific behaviour examples. Assessment of the current culture will help identify gaps between the ‘now’ and target, enabling identification of the changes required and clear communication of those changes.
- Activate leadership characteristics and engage employees – high performing digital cultures require teams to act autonomously and for individuals to exercise judgement. Leaders must embrace and manifest these behaviours and signal change via symbolic acts that embody the new culture, emphasise company values and spur employee engagement.
- Align the organisational context to embed the new culture – it’s virtually impossible to change culture without addressing underlying systems, processes and practices. Implemented changes must incentivise the desired new behaviours, including hiring policies that actively seek out prospects that exhibit the same desired characteristics.
Long-term plans deliver long-term benefits
BCG assessed the digital transformation of 40 organisations and found that fostering a digital culture becomes particularly powerful when viewing sustained performance. The results showed that 80% of companies that explicitly addressed cultural change enjoyed continuing success (for a period of at least three years), whereas not a single organisation that neglected to do so could boast the same outcome.
The group also found that embedding digital practices and behaviours – embodying a digital culture – within an organisation is a greater predictor of transformation success than other business levers including investment in digital initiatives and recruiting digital talent.
In late 2019, the world’s top digital transformation research company IDC released its Worldwide Digital Transformation 2020 Predictions. It found that investment in digital transformation is growing at a rate of 17.5%, with total spend to hit $US 7.4 trillion over the 2020-2023 period. Among its predictions, the company says 65% of organisations will aggressively modernise their legacy systems between now and 2023, driven by escalating cyberthreats and needed new functionality.
According to BCG, the window for opportunity is narrowing, with adoption of digital transformation plans now a mainstream activity across every business sector. For organisations hoping to gain a competitive edge and stay relevant in a streamlined and more agile world, fostering a digital culture is the first step – your very survival may rely on it.
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