Starting your Organizational Change Management journey right!
A Digital Transformation project is not just about implementing new technologies, it often involves significant changes in the way a business operates and delivers value to clients. Business processes, tools, customer interactions and even the organization’s culture undergoes a fundamental change during a digital transformation. This is why Organizational Change Management (OCM) is crucial to help organizations plan and manage these changes in order to deliver a successful digital transformation that truly delivers value.
Why Organizational Change Management is a must for Digital Transformation?
Every Digital Transformation endeavor requires "change," and change is often feared and resisted by people. Digital transformations can be quite disruptive and the users might need to learn new skills, use new technologies, and might even require a change in their roles and responsibilities. One of the main purposes of OCM is to minimize this resistance to change by the users by clearly outlining the advantages of the change and including them at every stage of the process. People are more likely to accept changes if expectations are spelled out, communication is improved, and misinformation is minimized.
Research shows that 70 percent of complex, large-scale change programs don’t reach their stated goals. Common pitfalls include a lack of employee engagement, inadequate management support, poor or non-existent cross-functional collaboration, and a lack of accountability. - McKinsey 
Digital Transformation initiatives can also fail because of a lack of adoption of new technologies, processes, and tools. Users might continue to resort to old processes, technologies and tools without a proper OCM strategy in place. OCM ensures that the users clearly understand the benefits of the transformation and trains them to use the new systems and processes.
Another important aspect of a digital transformation project is ensuring effective communication among all stakeholders. Project sponsors, users, and consumers must all be on the same page to ensure significant progress and achieve anticipated advantages. This is where OCM helps identify the stakeholders, ensure that they’re all aligned to the common cause, and foster collaboration to drive the transformation.
Last but not the least, OCM enables de-risking of the whole project by identifying the various risks involved, strategizing how to minimize the risks, and training the employees and users on the best practices to avoid these potential risks. Proactively addressing these risks ensures that the digital transformation is a success.
Why organizations struggle with change management
Now that we’ve established that effective change management is essential for a successful digital transformation, let’s look at some of the key focus areas for a successful digital transformation from a change management perspective.
- Lack of key stakeholder involvement: Identifying and involving the right people and ensuring they’re on the same page is key to driving effective change management. Oftentimes, discovery calls and project kick-off meetings happen without having all the key stakeholders onboard and this can cause major problems in managing change. The partner company helping with the implementation might come up with a project plan, scope and SOW. However, important things are likely to be missed out due to the lack of involvement of key stakeholders.
- Ineffective communication: Communication is the backbone of every project. Many businesses struggle to run productive meetings, set up systems to find problems and provide feedback. The team can work well together only if there’s effective communication. Keeping the stakeholders informed of project developments, bringing parties together to solve a specific issue, or creating a project environment that values constructive criticism are all effective ways to promote transparency. Not giving enough importance to effective communication management is another key reason businesses have struggled to adopt change management.
- Inadequate training/adoption: Ensuring an effective internal training plan is again key to a successful digital transformation. Businesses often fail to build strong training capabilities, provide basic training on the new technology and an understanding of the tools needed to ensure adoption. Also, post Go-live training plans are overlooked many a time that can create issues.
- Poor organization readiness: No transformation can be successful without having a business’ processes, people, and systems working synchronously. Basically, organizational readiness refers to how prepared your company is for any type of major change. Ideally, you should have in place the necessary processes and resources before undertaking a change, such as a baseline analysis, change readiness assessment, a business transition plan, and role mapping.
Typically, many organizations fail to consider all the focus areas or miss out on a few important ones that can be the difference between a successful and a failed digital transformation. We often see project kick-off meetings and discovery calls that are not really effective or holistic enough to cover every aspect of a successful transformation. A variety of factors can contribute to this, such as not involving all stakeholders, lack of effective communication strategies, and disagreements about scope among stakeholders. Not everyone is on the same page even after several meetings.
To solve this problem, at Applexus, we have come up with an “Organizational change management alignment” workshop based on Design Thinking principles to ensure that our clients enjoy a seamless transition to the desired future state and realize the full benefits of their digital transformation.
Integrating Design Thinking principles in Organizational Change Management
By incorporating design thinking principles into change initiatives, organizations can prioritize the needs of those impacted by change. This human-centered problem-solving approach emphasizes empathy, collaboration, experimentation, and iteration, and has been shown to improve the success of organizational change management (OCM). The following are some ways and reasons to infuse OCM with design thinking principles:
- Focus on user needs: Design thinking principles play a critical role in ensuring that change initiatives are centered around user needs. Prioritizing empathy and user-centered problem-solving through the design thinking method can help create change initiatives that effectively address the needs of those impacted by the change. It helps to identify pain points, prioritize user needs, and design user-centered solutions by empathizing with users to understand their needs.
- Collaboration and co-creation: Design thinking emphasizes collaboration and co-creation by involving stakeholders in the process. It ensures the solutions align with the goals and meets their needs. In addition to breaking down silos, this collaborative approach can foster a culture of innovation and creativity.
- Experimentation and iteration: Design thinking principles prioritize experimentation and iteration, which can be implemented in OCM through a prototyping approach. By testing solutions and gathering feedback, companies can refine the solutions according to user input. This iterative method can help ensure that change initiatives are aligned with user requirements and are more likely to be embraced by stakeholders.
- Agile approach: Design thinking principles can be combined to create an agile approach to OCM. An agile approach emphasizes flexibility, adaptability, and responsiveness to change. With the combination of design thinking and agile methodologies, change management can be made more iterative, collaborative, and user-centered.
The first step towards incorporating design thinking into OCM is to empathize with stakeholders and understand their needs. You can then ideate solutions, create a prototype, test them with stakeholders, and gather feedback. Finally, you can refine the solutions based on their feedback, and implement them with an iterative, agile approach.
The Applexus approach – a blend of OCM and Design Thinking
At Applexus, we start off with an organizational alignment workshop that fundamentally leverages design thinking concepts. In this workshop, all the key stakeholders including the sponsors, executive leadership, project team members and business process leads come together and collaborate. A reasoned discourse between the right people regarding multiple relevant factors like goals, functionality, geography will result in a specific and attainable plan that is time-bound. This sort of brainstorming provides a structured way of generating innovative ideas that have the users at the core of the problem, eventually leading to improved adoption of the change itself. It ensures that all the stakeholders are aligned on the scope of the project and the expected outcomes. As a result, it avoids unrealistic expectations by establishing a common understanding of the project's direction.
Before starting any project, it's essential to evaluate its feasibility and potential for success. We believe that the following questions must be addressed to ensure a project is aligned with the goals and values of the company:
- Does the project have a sound business case?
- What is the nature of the installation involved?
- What are the goals to be accomplished by the project?
- How many plants are involved in the project?
- Is the project being implemented for the right reasons?
- What is the size of the project?
By addressing these questions, we can ensure that the project is feasible, viable, and aligned with the goals and values of your organization. As the next step, our OCM experts help establish an effective communication strategy by drawing on past successes and failures. In addition, a thorough training process is developed, including detailed roadmaps with phase-wise breakdowns to facilitate the transition from both functional and training perspectives. It's also essential to recognize that change doesn't end with the go-live; continuous support is necessary to ensure that everyone is prepared for everyday business scenarios.
With the Applexus Organizational Alignment workshop, key stakeholders from various cross-functional teams can collaborate effectively, break down any silos, align on a common mission, and create user-centric innovative ideas that drive adoption. Ultimately, the workshop allows businesses to derive real value from their digital transformation initiative.
Introducing change to your organization requires extensive planning, discipline, and relentless focus to employ multipronged strategies from the bottom up. Every business transformation and change management calls for focus on the people side of change to enable them to use the tools and adapt effectively. Integrating new technology and changing how a company function doesn't happen overnight. Starting a project by following the right practices like a design thinking scoping workshop, is the best way to overcome challenges and maximize business value.
1 By Michael Bucy, Adrian Finlayson, Greg Kelly, and Chris Moye, May 9, 2016. The ‘how’ of transformation, McKinsey.https://www.mckinsey.com/industries/retail/our-insights/the-how-of-transformation