June 30, 2021
The Pandemic Accelerated Digital Transformation & Need for Organizational Change
Recent studies show that the COVID-19 pandemic propelled digitalization of products, services, and business models. In a recent McKinsey survey, executives reported that the pandemic accelerated use of advanced technologies in operations by 25 times. Other areas, like remote work, by 40 times. In just a few short months, digital projects that weren’t business priorities pre-pandemic suddenly became crucial to operations. Companies pivoted to make necessary changes, permanently adjusting processes and ways of working.
Spending on digital transformation accelerated, as well. In 2020, it increased by over 10%. Going forward, it’s expected that investment in digital transformation will continue to rise. Market projections indicate that spending on digital transformation will reach $6.8 trillion by 2023. Along with this expansion in digital capabilities, companies will need to effectively manage organizational change to ensure success.
Employees Are Experiencing Change Fatigue
During the pandemic, employees adapted to digital transformation initiatives and the related organizational changes. Meanwhile, they adjusted to major shifts in their personal lives. Health concerns, social distancing, remote school, job security, and other uncertainties meant managing change at home, too. This took its toll.
Jessica Knight, a Vice President at Gartner who leads a team to address HR Executives biggest challenges, indicates that change fatigue is rising. People have a diminished capacity to adapt to organizational change. This, in part, leads to employee burnout, and now, employees are resigning at record numbers. In fact, the Labor Department reported that 4 million people quit their jobs in April 2021.
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Leading Post-Pandemic Change Presents a Challenge
As organizational leaders plan for post-pandemic operations, they face continued uncertainty, in the overall business environment, with employee engagement, from their competitors, and more. Continued digital transformation is necessary to remain competitive, at just the time employees are burned out on change.
These dynamics present a striking challenge. Even pre-pandemic, McKinsey reported that 70% of digital transformation efforts fail, and most often due to lack of employee engagement. Now, with all that’s changed in the past year, how can leaders successfully guide continued digital transformation within their organizations?
At Thinaer, we offer an Industrial Internet of Things platform and a real-time feedback app to improve performance and enhance operational efficiency. Our clients include Fortune 500 enterprises and healthcare systems. In each implementation, we focus on technology, process, and people. Our PhD-led change management team guides impactful digital transformation with our clients. Here’s what we’ve learned along the way.
How it Works
We use IoT data + human feedback to lead data-driven change that resonates with key stakeholders.
Adopt a People-Focused Approach to Change
When digital transformation succeeds, employees adopt new processes, learn new systems, and adjust ways of working. This requires effective training, thoughtful communication, and focused employee engagement. As the collective workforce experiences weariness with change, it will be increasingly important to adopt a people-focused approach to change.
To get started, understand the fears, concerns, and motivators for the employees impacted by the digital transformation. Invite employee input to identify problems, highlight opportunities for improvement, and scope the initiative. This not only leads to enhanced employee buy-in and engagement, but it also ensures that the initiative aligns with actual inefficiencies.
As an example, at Thinaer, we partnered with a manufacturer to redevelop an internal system to better meet the needs of 1,000s of field employees. Before writing even a single line of code, we connected with frontline employees across the United States to understand what worked about the existing system and what didn’t. Through a series of qualitative interviews, we invited feedback on their processes, pain points, and potential solutions. We used this input to scope the project, which led to a final solution that was embraced by company executives and end users, alike.
Establish Two-Way Communication with Employees Throughout the Process
Digital transformation initiatives can take months, even years, to implement. To ensure continued buy-in, it’s important to bring employees along on the journey from concept to implementation. Rather than communicate a one-way message that consists of general updates, it’s much more impactful to establish a two-way dialogue between leaders and employees.
With two-way communication, leaders have an opportunity to listen to employees’ ideas, concerns, and feedback. Leaders can then use that input to develop communications that directly address employee sentiment and concerns. This ensures that messaging is relevant and meaningful, and it keeps employees engaged through the process.
To support a major digital transformation at a consumer-packaged goods company, we implemented our real-time feedback app to gather feedback from employees throughout an 18-month change process. We collected over 5,000 individual items of feedback from employees across this company. Using machine learning models and AI, our analytics team reported on broad-reaching employee sentiment, identified potential challenges, and highlighted employee concerns. Company leadership used these insights to enhance communication frequency, messaging, and channels. They also adapted the implementation based on recommendations from frontline employees. As a result, the initiative gained attention from national leadership as a model for guiding change.
Use Employee Feedback Data to Inform & Shape Change
In addition to establishing a two-way dialogue with employees, it’s important to listen and adopt their recommendations. Allow employee input to inform and guide the change process. Better than anyone, the people executing day-to-day tasks understand the nuances of how to improve certain processes or systems. They also understand the roadblocks that may prevent a successful implementation.
This people-focused approach to change management offers two distinct benefits. First, it ensures that implementation plans align with on-the-ground realities. Second, it encourages continued employee engagement, as people are empowered to shape the overall initiative. Everyone becomes part of the change and its ultimate success. For example, we provide real-time tracking, machine health and usage tracking, environmental monitoring and inventory optimization for a Fortune 500 manufacturing firm. Each time we launch a new initiative, we partner with the leaders and employees to map the best path for implementation. We also make it easy and cost-effective to adjust the technology to best align with the on-the-ground experience.
Change in 2021 and Beyond
Investment in digital transformation is accelerating at a time when employees are reporting change fatigue and burnout. This creates a need for leaders to balance digital progress and innovation with employee engagement. To do this, company leaders should adopt a people-first approach to change management. By establishing a two-way dialogue with employees and implementing their recommendations, leaders can cultivate the buy-in needed to guide successful digital transformation.
Rebecca Zinn is a Senior Consultant with Thinaer, where she partners with organizations to support digital transformation, change management, and strategic communications.
Thinaer’s 360° digital transformation solution integrates Industrial Internet of Things (IIoT) machine data and human feedback to generate a new class of data. With machine learning and AI-driven analytics, Thinaer’s platform improves efficiency and performance across the enterprise. Clients include Fortune 500 companies in the manufacturing, financial services, consumer packaged goods, and the automotive industries, as well as large healthcare systems. Learn more at thinaer.io.