It’s no secret that organizations have struggled with digital transformation. According to McKinsey, only 30 percent of transformation projects prior to 2020 were successful. The analyst drew attention to a fundamental challenge in an article entitled How to Restart Your Stalled Digital Transformation, which showed that while 90 percent of organizations had pursued a major digital initiative, 70 percent experienced “stalls” in implementation and only 36 percent restarted work on their project after the stall occurred.
Why do these stalls occur, and how can businesses pull out of them? It all comes down to effective organizational collaboration, and a simple tool called the digital transformation roadmap milestone matrix can help you through the challenges.
Why so many organizations stall on digital transformation
The McKinsey research is aligned with work my colleagues and I have been doing at the University of Waterloo, which has informed the development of our Digital Transformation Certificate online program. Our wide-ranging review of reports on digital transformation found that it’s a big challenge to implement large-scale change that significantly impacts the organization. Many organizations have made some small steps towards radical transformation, but few have taken the plunge. Now is the time.
Effective technological change requires that those with knowledge and technological capabilities work closely with those with business responsibilities. Many organizations have created Chief Information Officers and given them a seat at the executive table. It is now clear that while this may have increased the focus on technology in the executive team, it has not been enough to provide a solid foundation for the large-scale technological change needed today.
The McKinsey report suggests that collaboration between technology and the business remains a significant challenge that is critical to the success of technological change.
When asked the main reason for their stalls, 59 percent of survey respondents pointed to failures of collaboration, including:
- Misaligned culture and ways of working (18 percent)
- Ineffective or misinformed transformation strategy (7 percent)
- Ineffective design of transformation (7 percent)
- Insufficient alignment and/or commitment across the organization (14 percent)
- Lack of clarity on transformation strategy (14 percent)
All of these issues require effective collaboration at a senior level in the organization, between all functions, which most have not effectively done so far. Aligning culture and ways of working requires a common commitment from the management team and the people they manage. Effective transformation strategy requires that there be wide, active participation in the strategy development and a high level of motivation for its implementation, including in the design of the transformation activity itself. Large-scale digital transformation is only possible with a tremendous whole organization effort from a united senior management team.
The digital transformation roadmap milestone matrix
One of the key objectives of the University of Waterloo Watspeed Digital Transformation online certificate program is preventing and overcoming stalls, enabling organizations’ large-scale transformation.
We have developed processes, tools and techniques that make digital transformation collaboration better and which our program participants apply in their own organizations, from development of their transformation vision to addressing common implementation challenges. One of these is our roadmap milestone matrix.
Once the main elements of the transformation vision have been identified (after a thorough process that effectively engages key stakeholders, including the senior management team), and the main elements of the transformation strategy have been determined, the main milestones in the transformation implementation can be designed. The roadmap milestone matrix provides a visual template that enables collaboration amongst the members of the senior management team and fosters commitment to its effective implementation.
The milestones together summarize the main elements of the digital transformation project to achieve the transformation vision. They describe the main activities or tasks that are necessary. This simple process is designed to ensure that everything done in the project is focused on the initial vision. The vision is the reference point for the roadmap creation.
The digital transformation roadmap milestone matrix provides a framework for aligning project activity with the main elements that are critical in transformation: customers, suppliers, skills, organization structure, use of data, operational processes, integration, leadership and culture. The matrix has been applied frequently by our program participants in their implementation plan development. The following example illustrates its application in a canoe manufacturing company.