The words ‘digital transformation’ can bring purely ‘tech focused change’ to mind, and while we have seen increased reliance on digital processes in the last half a century, it is important to remember that at the heart of any business transformation are the people.

Ben Cowan, Partner within Eton Bridge Partners’ Business Transformation practice spoke to Julia Puzey, Transformation and Change specialist, about the role of people in change management.

With 18 years of experience around change management across a huge variety of industries and sectors, Julia has driven and supported transformation in several large-scale companies such as M&S, Costa Coffee and Ted Baker. Julia speaks with Ben about the notable ways that retail, in particular, has shifted as technology has become ever more crucial to the customer journey.

The changing definition of digital transformation

The definition of digital transformation has changed, even from as recently as 5 years ago. In the past, most companies would associate digital transformation with the implementation of big, new systems and large-scale technology change.

“But now, particularly in a post-pandemic world, digital transformation has become even more important, and that definition has become much broader. Digital transformation is now about ensuring that companies remain relevant in the industry that they operate in, and relevant to their consumers as well. Whether they be internal consumers, or external facing.” Julia said.

“Technology is a fundamental part of modern life and the way in which we want to engage with it as consumers, as an end consumer in a retail environment or an end consumer in the recruitment industry for example, is very different. So, for me, digital transformation is about each company working out how they need to evolve to stay relevant and engage with its stakeholders.”

Using technology to enable changing ways of working and really integrating it and making it align with your business goals, is the key aspect of digital transformation. Digital transformation might help you:

• Overhaul your business processes
• Change your operations
• Be more efficient
• Find and implement cost savings
• Engage with your consumers in a different way

Successful digital transformation is no longer a box ticking exercise

We’re asking individuals who are interacting with us to engage differently, work in a different way, and often think differently. So, to manage change successfully you must consider the impact on the stakeholders and ensure that you have them fully engaged. It’s not as simple as just implementing new systems.

To engage employees in the process, the onus is on HR teams to work on the cultural and behavioural changes needed to implement the changes. Have they really looked at the vision and values of the company and whether or not they’re still relevant, or whether they need to be adjusted?

When changes affect external customers, it is crucial to consider the change journey that customers will go on. Has the company engaged with those consumers to understand whether the changes make sense? Particularly with external consumers, companies don’t give a huge amount of thought to that change journey that individuals will go on, which is a mistake.

The future of change management

While a few years ago the number one reason given for the failure of transformation programmes was lack of sponsorship, we now know that even if you don’t have the right level of sponsorship, with the right level of engagement you can actually be really successful.

Businesses must prioritise change management if they want to be successful in the current landscape, but that this kind of shift isn’t going to happen overnight. “Change is often seen as quite a soft discipline, which has been a huge challenge for transformation over the last 20-years.

But for transformation to be successful, the change piece must be on a similar or equal footing to the project and programme management piece. People never question why they need a project manager; they can see the deliverables.

But a change manager is still very much seen as a nice to have. The disparity in day rates as an example between exceptionally experienced change managers and exceptionally experienced program managers demonstrate how they are perceived.”

When you consider the capacity of change managers to shift the trajectory of a business, this is a huge mistake. “The industry has started to change, but as a discipline, I think change needs to be respected a lot more. But for this to happen, change managers need to demonstrate their approach, their value and their deliverables.”

Shifting these perceptions can lead to huge rewards, Julia says. “Companies that recognise the value of the transformation piece, have a network of change throughout their business,  links to that transformation function and to the business strategy – these are the ones that are likely to be successful.”

It isn’t technology that drives the transformation

While the term is digital transformation, Ben suggested that it should be considered as ‘digital enabled change and transformation’ instead. Digital transformation involves transforming a business via technology, it is not change driven by technology.

And as Julia says, technology isn’t always the answer. “Many CEOs see it as the way to deliver their own agendas in the organisation, but also because it’s been seen by many businesses as a way to deliver change.

It’s much harder to look at your business and ask why are we not successful? Often this is because businesses have lost touch with their consumers/customers, and while tech can be part of the solution to that, cultural and behaviour changes, company values and store environments are fundamental to success in business.

Companies sometimes see digital transformation as a cure all, but actually you need to reengineer your processes, reengineer your organisation design, transform your operating model, change the culture and values behaviours in the organisation, understand your consumer and understand your position within the marketplace. If you don’t do all of those things the technology won’t help you.”

Julia’s closing sentence perfectly summed up digital transformation. “All an organisation is, is a set of individuals coming together for a common purpose.”

Change is an integral part of delivering transformation. But when businesses want to be successful in delivering transformation, they have to put people and the change agenda at the heart of everything that they do.

“It must be the first thing they think of, not the last thing. It must be the thing that drives the transformation, not the thing that’s picked up at the end because they suddenly realise that this is all affecting people.”

Thanks very much to Julia Puzey for her fascinating and useful insights.

To speak to Ben about transformation within your business, contact him here.