Digital Transformation: People, Organization & change

1. DIGITAL TRANSFORMATION People, Organization & Change © Operational Excellence Consulting. All rights reserved.

2. NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg LEARNING OBJECTIVES Acquire knowledge on the principles and key concepts of digital transformation Understand the soft aspects of Digital Transformation – people, organization and change management Identify the pitfalls to avoid and define the critical success factors of digital transformation 2

3. CONTENTS 01 02 03 04 INTRODUCTION & KEY CONCEPTS ORGANIZATIONAL IMPACT CHANGE MANAGEMENT GUIDELINES PITFALLS & CRITICAL SUCCESS FACTORS 3

4. WHAT BROUGHT US HERE TODAY THE ORGANIZATION THE EXTERNAL ENVIRONMENT § Different understanding of digital transformation among stakeholders § Digital transformation is being adopted by companies across most industries § Employees fear of being replaced as a result of digital transformation § Digitalization is no longer a choice but a necessity § Legacy IT infrastructure lacks efficiency § Omni-channel is a prerequisite for great customer experience § Organizational resistance to change § Customers expect value and seamless experience 4

5. SOME STATISTICS ON DIGITAL TRANSFORMATION 89% 67% 73% Companies have already adopted a digital-first strategy or plan to do so Shoppers use more than one channel during their shopping journey Consumers will pay more for great experience 70% 31% 20% Employees said their company’s leadership doesn’t know what to do with digital transformation Companies are actually experience-led Digital transformations fail, most often due to resistance from employees Source: Forbes 5

6. DIGITAL TRANSFORMATION IS NOT ABOUT TECHNOLOGY Most digital technologies provide possibilities for efficiency gains and customer intimacy. But if people lack the right mindset to change and the current organizational practices are flawed, Digital Transformation will fail. 6

7. MYTHS OF DIGITAL TRANSFORMATION 3 1 2 Digital Transformation applies only to B2C companies Only Millennials are more willing to use Digital services Digital Transformation is just for online businesses 5 6 4 Digital Transformation and Digitization are the same things Digital Transformation is only about Digital, not IT Digital Transformation is relevant only in developed markets 7

8. MARTEC’S LAW: TECHNOLOGY CHANGES EXPONENTIALLY, ORGANIZATIONS CHANGE LOGARITHMICALLY Technology changes exponentially Technology management is deciding which changes are adopted ? ? Organizations change logarithmically Source: Scott Brinker 8

9. SOFT SKILLS ARE ESSENTIAL TO ENSURE DIGITAL TRANSFORMATION MANAGEMENT BEHAVIORAL CHANGE LEADERSHIP SUPPORT MINDSET SHIFT Employees must change how they approach their work, leverage data, and use new digital tools Leaders set expectations and lead by example Employees need to embrace the idea that digital tools will help them to be more productive 9

10. DIGITAL TRANSFORMATION DEFINED “Digital transformation marks a radical rethinking of how an organization uses technology, people and processes to fundamentally change business performance.” George Westerman MIT principal research scientist and author of Leading Digital: Turning Technology Into Business Transformation 10

11. FIVE KEY DIGITAL TECHNOLOGIES TRANSFORMAING INDUSTRY & COMMERCE AI BLOCKCHAIN CLOUD ARTIFICIAL INTELLIGENCE INTERNET OF THINGS CYBERSECURITY The state of being protected against the criminal or unauthorized use of electronic data, or the measures taken to achieve this Blockchain allows the secure sharing of business processes between companies and partners in an encrypted manner Cloud computing means storing and accessing data and programs over the Internet instead of the local server or user’s computer hard drive Artificial intelligence is the simulation of human intelligence processes by machines, especially computer systems The interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data 11

12. DIGITAL TRANSFORMATION IS A JOURNEY, NOT A GOAL Customers don’t think in isolated experiences. They think in terms of the end-to-end experience journey. 12

13. “ technology – not the other way around.” You’ve got to start with the customer experience and work back toward the STEVE JOBS 13

14. BENEFITS OF DIGITAL TRANSFORMATION Improved customer journey Greater competitive advantage Increased internal collaboration Thriving culture of innovation Improved efficiency Deeper data analysis Increased customer conversions and loyalty More empowered workforce 14

15. A SOLID CULTURAL FOUNDATION IS ESSENTIAL TO ENSURE DIGITAL TRANSFORMATION MANAGEMENT Alignment & Communications Role Modeling Skill Building Execution Focus Role modeling culture where leaders consistently adopt and demonstrate the new behaviors Communications that cascade the change story to every level of the organization Skill building approach to develop company- wide capabilities that meet unique technical requirements of the organization Formal systems and structures to ensure processes and targets reinforce to the desired changes and behaviors 15

16. WHAT IS THE IMPACT ON THE ROLE OF MANAGEMENT? In a digitally-transformed organization: § Managers need to be retrained as “orchestra” leaders or as frontline employees § Reward systems need to reflect equal value of “work” as well as “management” § Job reductions are best planned well in advance § “Blockers” must be handled In hierarchies, managers were needed to: § Supply difficult-to-find intelligence § Pass information up and down the hierarchy § Convey accumulated learning and culture of organization 16

17. MARKETING & IT HAVE TREMENDOUS ABILITY TO IMPACT CUSTOMER EXPERIENCE THROUGH COLLABORATION & CHANGE IT touches and enables every part of the business and is the ultimate orchestrator of change. Marketing defines the vision of the company and value proposition for the customers. Marketing IT 17

18. UNDERSTAND WHY PEOPLE FEAR CHANGE Lack of belief in effectiveness or reality of change Culture Attitude The way we think Behavior The way we act Systems & Processes Start by changing work processes and systems 18

19. UNDERSTAND WHY PEOPLE FEAR CHANGE Insecurity “What is happening and what will happen to my job?” Digital Transformation answers: § Segment the audience Communicate clearly using 4 P’s of: Purpose, Process, Progress and Problems § Communicate using multiple channels and multiple voices Be honest: this in itself may be an indication that profound change is taking place § § 19

20. UNDERSTANDING RESPONSES TO CHANGE THE ENROLLMENT CURVE It is key to understand and leverage is the rate and pace at which people adapt to change ● Focus time and efforts on the middle / late enrollers. Don’t waste time on Slugs / Die Hards. You won’t persuade them in 100 days! ● Let the Initiators & Early Enrollers help you promote the change ● Source: The Atlanta Consulting Group, Inc. 20

21. PREPARE & COACH CHANGE LEADERS The Change Curve Positive Impact Negative Stage 1 2 3 4 State Status quo Disruption Exploration Rebuilding Reaction Shock, Denial Anger, Fear Acceptance Commitment Source: Elisabeth Kubler-Ross 21

22. THE 9 BUILDING BLOCKS OF A BUINSESS MODEL CANVAS HELP TO ALIGN ACTIVITES TO CREATE VALUE FOR CUSTOMERS Business Model Canvas Key Customer Relationships Activities Customer Segments Value Key Proposition Partners Key Channels Resources Cost Structure Revenue Streams Source: Strategyzer 22

23. A SYSTEMATIC APPROACH TO MANAGING CHANGE ENSURES GREATER BUY-IN & SUPPORT FOR DIGITAL TRANSFORMATION Change Management Process 1 2 3 4 Evaluate Effectiveness Monitor Progress Analyze Current Situation Plan & Launch Program § Identify reason for change § Define change strategy § Monitor change process § Review results § Share success stories § Assess readiness for change § Set up change infrastructure § Overcome resistance to change § Provide follow up support § Assess impact of change § Create awareness and get buy-in § Assess behavioral changes § Reward and recognize § Identify gaps § Develop and communicate plans § Measure effectiveness § Gather feedback § Develop skills § Provide support § Launch pilot project 23

24. TEN SOURCES OF TEAM CONFLICT THAT IMPEDE DIGITAL TRANSFORMATION SUCCESS Roles Information ● ● Goals Structure ● ● Procedures Value/norms ● ● Resources Communications ● ● Personalities Turf Issues ● ● 24

25. DESCRIPTION OF TUCKMAN’S MODEL OF TEAM DEVELOPMENT STAGES 2 1 3 4 Forming Storming Norming Performing § Team members meet each other § Team members learn how to work together § Team starts to work and act together § Team members work hard toward goal § Team members learn about the task § Team members learn about other member’s abilities § Roles evolve into helping the team succeed § Members are flexible and help each other § All team members learn what their roles will be § Leader focuses the team § Team members are more likely to express opinions § Leader’s role is blurred – everyone is focused Source: Bruce W. Tuckman 25

26. SZPEKMAN’S COMMUNICATION FRAMEWORK PROVIDES A HOLISTIC APPROACH TO MANAGING CHANGE COMMUNICATIONS Szpekman’s Communication Framework Knowledge/Skill Emphasis Competency models Hiring processes Orientation programs Training and development Feedback and coaching Talent planning Communication Communication plans Print and electronic media Face-to-face communication Leadership Measures Performance management 360 degree feedback Employee surveys Performance metrics and benchmarks Vision and strategy Agenda items Questions Praise Resources Assignments Symbolic behavior MANAGERS Rewards Compensation plans Benefits Recognition programs Promotions Structure/Process Organization structure Career paths Policies and procedures Roles and responsibilities Tools and support 26 Source: Andy Szpekman

27. THE CONSCIOUS COMPETENCE LEARNING MODEL RELATES TO THE PSYCHOLOGICAL STATES INVOLVED IN SKILL DEVELOPMENT The Conscious Competence Learning Model Conscious Conscious Competence Conscious Incompetence Consciousness Unconscious Unconscious Incompetence Unconscious Competence Incompetent Competent Competence Source: Noel Burch (Gordon Training International) 27

28. “ results.” Insanity is doing the same thing, over and over again, but expecting different ALBERT EINSTEIN 28

29. 10 PITFALLS OF DIGITAL TRANSFORMATION 1. No business strategy 6. No internal communication 2. Not knowing what digital transformation is 7. Not having the right people 8. Not investing in cultural change 3. No leadership commitment 9. No collaboration with other business functions 4. No stakeholder analysis 5. No risk management 10. No ownership of the digital transformation project 29

30. ABOUT OPERATIONAL EXCELLENCE CONSULTING Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg