Successful transformations require a human focus: Leadership, culture, and employee engagement.

More than just a trending buzzword, digital transformation has become a must-do for organizations. The ever-growing threat of digital disruption and pandemic-driven uncertainty has radically thrust businesses into rethinking how they operate. In fact, according to Foundry’s 2021 Digital Business survey, 91 percent of organizations have already adopted, or are planning to adopt, digital-first business strategies.

Yet, amid the flurry to pivot and adapt, it isn’t uncommon for organizations to overlook a key success factor in their transformation journey: people.

At the heart of any successful digital transformation lies the harmonious interplay between technology and people. However, I’ve often seen many businesses place excessive importance on flashy new digital solutions and fail to recognize that any major organization-wide change depends on and starts with their employees. If either element is absent or neglected, the potential for success plummets, evidenced by how only a meager 5 percent of digital transformation projects achieve or exceed expectations.

So, to maximize the long-term success of digital transformation, organizations need to focus on the human side of change and prioritize the three essential elements of leadership, culture, and employee engagement.

Leadership: Envisioning change and communicating it well

Leadership can make or break digital transformation initiatives. From conception to implementation, it’s paramount for leaders at all levels to be aligned on a well-defined vision. After all, as MIT Sloan School of Management senior lecturer Dr. George Westerman once said, “If you think about digital transformation as two words, we pay too much attention to the digital and not enough to transformation. It’s not a technology challenge, it’s a leadership one.”

This requires leaders to have a clear picture of what digital transformation means for the company, the value it can provide, and the potential challenges to overcome along the way. When leaders are in tune with initiatives, they can act as champions for change within their business units and inspire confidence for them to take the first step toward transformation.

But having a clear vision is one thing; executing it well is another. Leaders play a key role in communicating their vision to their teams and being transparent about how the new initiatives can elevate employees’ work and equip them with vital skills for better performance and career progression.

By enabling employees to understand the potential of digital transformation, organizations can win their buy-in and empower them to collaborate towards a shared goal.

Culture: Fostering experimentation and agility

Another element that forms the bedrock for successful digital transformations is organizational culture. Indeed, studies have shown that 87 percent of C-suites and executives agree culture creates bigger barriers to digital transformation than technology.

Since organizational culture starts at the top, leaders are usually the ones to establish and reinforce the company’s shared values. But if they hold all the cards, this might get in the way of introducing new initiatives.

Think of traditional corporate hierarchies and digital transformation like oil and water, with the former following a strict chain of command while the latter calls for agile decision-making and an open mindset. Digital transformations are inherently uncertain, requiring constant experimentation and cross-team collaboration. This, in turn, requires a culture that encourages employees to freely innovate, collaborate, and correct mistakes as they go.

That’s why companies with flat organizational structures, much like Silicon Valley start-ups and today’s millennial-led firms, are better poised to succeed in their digital transformations. By removing layers of complexity and empowering employees at all levels to make decisions that matter, organizations can create a safe environment where people aren’t afraid of the unfamiliar and, ultimately, embrace change.

Employee engagement: Tap into your greatest asset

Employees can be agents of digital transformation or its victims. Any significant transformation is a massive undertaking, but it’s even harder when employees are uncertain and detached from the process.

But why shouldn’t you involve them from the beginning? Employees possess a wealth of intimate knowledge of processes, customers, and operations, and are the people whose daily lives will be impacted by new initiatives. When organizations fail to engage employees, they threaten the success and adoption of digital initiatives.

Kickstart any digital transformation initiatives by involving your employees and helping them understand their roles, workflows, and needs. By engaging with your people via workshops and discussions, businesses can gain nuanced ground-level insight into operational processes and customer needs. This allows management to then refine their digital transformation strategies to ensure they best serve their employees.

Employee engagement also fosters a sense of ownership and collaboration among workers, dispelling the perception of digital transformation as top-down or IT-related initiatives. Doing so transforms employees into advocates, fostering greater innovation and motivation to make the transformation a success.

So, whether you’re forging your own path ahead or tapping on digital transformation solutions, set your organization up for success by having a clear vision, creating an open-minded culture, and actively engaging with employees.

Maarten Kelder and Imran Mohd are the Managing Director and Consultant of the Strategy Centre of Excellence respectively at Temus, a digital transformation company established by Temasek in strategic partnership with UST.

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