Do you know that Germany only ranks 13th in terms of digital maturity in the European Union? Projects regarding Digital Transformation can currently be found in all industries and almost all companies but despite massive investments in digital technologies and IT, an astonishing 80% of digital transformation projects fail to meet their original objectives – not only in Germany but worldwide. So how can you ensure that your digital transformation is among those that succeed?

• From All-in-Flux to Transformation Purpose & Strategy: 70% of digital transformations fail due to internal resistance of employees, which is predominantly caused by a lack of transformational goals. A transformation is a unique journey of reinvention from the status quo of the organization to a desired target state to gain or regain a competitive edge. Sure, build for adaptability but even as you move toward an agile organization, don’t underestimate the value of a transformational strategy. Every successful transformative movement has a clear north star, and leaders can explain in simple language why the grass will be greener where you want to go. At the same time, it is critical to truly understand the starting point of change. If you don’t know where you are, how should you know, where you are going? After all, still most organization cannot specify the delta that they want to achieve with the help of the transformation. Despite it is time-consuming and often hard, it pays off big times when a leadership can specify the deltas of transformation in terms of all three dimensions – value creation (back-end), value creation (front-end) and value capture (monetization mechanics). A side benefit is that leadership teams that speak ‘one language’, manage such a multi-year transformation journey much more effectively.
• From Under-Equipped Leaders to Transformation Dedication: Only 35% of executives say they have the leadership skills to support digital transformation. This is startling because digital transformation is about making digital an integral part of the value fabric of an organization. Whether you chose a ‘separate-then-integrate’ or an ‘embed-and-scale-out’ approach, solid sponsorship and commitment from the top is pivotal. The successful cases we observed had senior leaders who were sensitive to the power bases within the firm, and who were able to use their political skills to overcome potential sources of resistance. The more emphasis you place on transforming business and operating models versus (just) automation and process re-engineering projects in your portfolio of digital initiatives, the more CEO and Board-backing and also collaboration in the C-Suite becomes success-critical. These more holistic and far-reaching transformations typically require orchestration across different business units and functions. A 2020 study found that companies, which are leaders in digital transformation, the C-Suite expresses 2 times more vocal support for the digital efforts and 7 times more collaboration across the C-Suite than at the laggards. Transformation dedication is not only key on a Board-level, however on every level of the organization. This can entail Digital Champions spearheading certain digital initiatives or Data Stewards, which secure data consistency and integrity
• From Eclectic-Change to Professional Transformation Steering & Orchestration: Improper change management, lack of training for internal users and poor project management are the three major organizational barriers for a successful digital transformation according to various studies. The ‘organizational muscle’ for transformation is not well trained in most companies. We easily find many experts in sales, marketing, supply chain and finance but who raises the hand in a meeting, when you look for a pro in transformation? A professional transformation multi-project management entails an active portfolio mgmt., the orchestration of the various workstreams and its dependencies, the stakeholder management, progress tracking as well as success measurement e.g. via maturity models and OKRs, result anchoring and the replication of success patterns. According to the 2023 state of digital transformation report, 70% of all companies emphasize the need for a central steering and orchestration, e.g., via a CDO/CDIO-like role or via professional transformation program management.
• From Technology-Overemphasis to People & Culture-Focus: The WEF’s Future of Jobs 2030 report predicts that the impact of most technologies on jobs will be positive over the next five years. The fastest-growing occupations relative to their size are now driven by technology, digitization and sustainability, but overall employers expect a structural change in the labor market of 23% of jobs over the next five years. Technology is solely an important means to an end, namely, to create business and social impact at scale. However, new technologies are only adopted and can have the intended effect if people understand them with their hearts and minds. This requires that the right skills and competencies are in place and that a critical mass of added value is created to reach a change in behavior, hence a change in the status quo of the organization. To put it bluntly, when the right skills and competences are a bottleneck, transformation mostly fails. If a company’s ‘blue collar’ workers have not been trained for years, the Smart Production project is unlikely to succeed. Put your best people to work, hire a few new players which can dramatically accelerate the work, and move talent if required. Since skills and competencies are the transmission belt for the adoption of new digital technologies, digital enablement and systematic transformation of skills and competencies play a key role.

In summary, true digital transformation goes beyond technology – it is a strategic shift that requires a clear transformation north star, strong leadership commitment, professional governance and orchestration of the transformation, and an employee-centric approach with a focus on upskilling and digital literacy. By embracing this holistic approach, organizations can not only achieve their transformation goals, but also create a resilient, future-proof foundation for sustainable growth in the digital age.

/ ABOUT THE AUTHOR

• Dr. Carsten Linz is the CEO and Founder of bluegain. Formerly Group Digital Officer at BASF and Business Development Officer at SAP, he is known for building €100 million businesses and leading large-scale transformations affecting 60,000+ employees. He is represented on various boards including Shareability’s Technology & Innovation Committee and Social Impact. A member of the World Economic Forum’s Expert Network, Dr. Linz is also author of renowned books and articles who shares his expertise in executive programs at top business schools around the world.