Over 70% digital transformation projects fail. This means that the vast majority of companies and teams that set out to go digital don’t succeed. Their attempts at digitally transforming their companies don’t produce the expected results and eventually companies end up giving up on such.

What causes these staggering failure rates? Why do only few companies make it to the digital Promised Land? There are several factors that explain the failure to turn companies into digital success stories. I outline some of them below:

  1. Lack of commitment from senior leadership

Any successful digital transformation requires unwavering support from the leadership. The leadership doesn’t necessarily need to be nerds but need to at least show enthusiasm in seeing digital transformation goals through. This ‘transformation-supportive’ leadership encourages agility and a new culture of operation. Organisations that do not succeed see digital transformation leadership as something that can be passively outsourced or left to the operation of a single digital unit. Case study after case study supports the role of leadership in spearheading and facilitating successful transformation in their companies.

  • Half-commitment to change

Most successful start-ups are naturally good at innovation and struggle with scaling. The converse is true for established companies. To succeed at turning their companies into technology organisations, companies need to embrace change and know how to manage it to achieve business objectives. For ‘traditional companies’ adherence to processes and models that have once worked is the norm they naturally revert to when operating. It is difficult for them to be nimble enough to anticipate, adopt and successfully deploy new models. This explains why this role of identifying new gaps is often carried out successfully by incumbents.

Big companies are elephants that are able to use their size to defend themselves against other animals while vulnerable to much smaller and seemingly less dangerous opponents that utilize their opponents’ weaknesses. Ironically, other big animals fail to utilize these weak points to their advantage.

Successful digital transformation requires that companies, big and small, be committed and become strong proponents of change. It is in relentless pursuit of the new that innovation is created.  Digital companies not only embrace new approaches, they are on the lookout for them. In fact, they have set up whole departments dedicated to experimenting with new tools and approaches. Do they fail? Yes, some do but moonshot ideas often arise from such an approach.

  • Not building new capabilities

Effectively managing change requires building new capabilities within organisations. Digital transformation is not just about the technology. Technology is just one piece of the puzzle. Transformation requires building new capabilities; acquiring new skills, recruiting new talent, moving process to agile and embracing new business models. The rapid pace of technological change requires that organisations become learning machines. They have to constantly test out things, determine what’s working and what’s not and be able to iterate till they ship out a close-to perfect final offering.

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