5-second summary
- Studies have shown that focusing on the human and cultural aspects of digital transformation increase the odds of success.
- The mindset you bring to a digital transformation initiative determines how you’ll work with others to get the job done (and whether you’ll still have a good relationship afterward).
- Mutual trust, a willingness to learn from failure (rather than punish it), and an emphasis on progress instead of perfection go a long way in this situation.
In third grade, we learned a song that starts out “If you think you can, or if you think you can’t, you’re absolutely right.” The same goes for us adults. The stories we tell ourselves about work – our mindset – are bigger determinants of success than our skills or smarts.
“There’s a lot of research on this,” says MIT professor and digital transformation specialist Blade Kotelly. “The more you believe you’ll be successful at something, the more you will be – which is amazing.” (Apparently, my grade-school music teacher was onto something with that song.)
Succeeding at something like digital transformation is particularly tough because of the sheer magnitude of change involved. There will be uncomfortable decisions and growing pains along the way. People may even be concerned about being digitally transformed out of their jobs as manual processes are automated and legacy systems are replaced with new technologies. Rallying your organization to take it all on and stick with it is tricky. But essential.
According to research by McKinsey, people point to culture as the most significant barrier to digital success – more than any other factor. A 2018 study of organizations undergoing digital transformations found that companies that focused on culture reported 5X greater financial performance than companies that didn’t.
The bottom line is that shaping a culture that will support digital transformation starts with shaping individuals’ mindsets. Let’s take a look at four helpful mindsets and how to help yourself and your teams adopt them.
1. Growth mindset
Characteristics: Persistence in the face of obstacles; bias for action despite ambiguity; willingness to fail (and learn from it).
Why it matters
Digital transformation is a long process, riddled with obstacles and delays. You’ll need patience and determination. But beware of paralysis masquerading as patience! If you wait until all your unknowns have resolved into knowns or until conditions feel just right, you’ll never get off the ground.
A bias for action helps create momentum and gives people the confidence to move forward with incomplete or imperfect information. “You have to have the courage to make small bets and take small risks that reduce uncertainty,” Kotelly says. He advises companies to use a trial-and-error approach, especially when it comes to decisions that are easy to reverse if they don’t work out.
Your team will also need a healthy dose of curiosity and open-mindedness. “The rapid pace of technological change means we need team members who are versatile, have non-traditional viewpoints, and aren’t hyper-focused on a particular technology,” says Pranav Shahi, head of IT applications at Atlassian. The more team members feel they have permission to take calculated risks and admit what they don’t yet know, the more opportunities for learning you’ll have.
How to cultivate a growth mindset
- Throughout the transformation, carve out time for regular retrospectives and incorporate the lessons learned into your plans going forward. A 30-minute check-in with members of the core teams every few weeks is a good place to start.
- Give people an outcome to own and let them figure out how to get there, rather than prescribing each step. This gives them a chance to think creatively and practice working with ambiguity.
- Take a cue from Pranav and treat failures as something to celebrate because hey: you just learned something! “The best way to instill this principle is by talking about your own mistakes and what you learned,” he says.
- Treat failures as systemic failures. It might seem like one person’s fault, but there are almost always issues around technical capabilities, logistics, or other organizational factors that contributed.
2. People-first mindset
Characteristics: Empathy, especially for people who aren’t sure there will still be a place for them in the organization post-transition; customer-centricity.
Why it matters
It’s been said so much that it’s almost trite, but digital transformation is more of a people challenge than a technology challenge. It’s not enough to care about the project’s success. You also have to genuinely care about the people who depend on your leadership for their success.
Here’s Professor Kotelly again: “You need three things in the team: the skills to innovate, the confidence to use those skills, and psychological safety.”
The other people you have to think about are your customers. It’s critical to understand their needs inside and out so you’re confident in your digital transformation strategy before pouring millions of dollars and countless hours into executing on it.
How to cultivate a people-first mindset
- Invest in a fact-finding phase that includes customer interviews. When you and your team hear pain points and preferences from the customer’s own mouth, they become more real. Let them be your North Star.
- Have conversations with the core teams involved to understand whose job will be affected, then have conversations with those people to understand their concerns. You may not have ready answers for them, but at least you’ll know what to solve for.
- Acknowledge where there is tension between what customers want and what employees want. If you don’t talk openly about it, your chances of finding a solution are slim.
“A common misconception is that automation cuts jobs. Truth is, because of Jira Service Management, we can see our resolved vs. unresolved ratio fluctuate and get ahead of it when we need to. I can change an automation to route the requests to different people and reduce workload by 25% almost immediately, or go to our leadership and say, ‘This is the state of play, these are our resources; let’s talk about next steps.’ We’ve actually been granted two new headcount because of this.”
– Alison Wood, Director of Global Copyright and Administration at Sony Music Publishing
3. Abundance mindset
Characteristics: Open-mindedness; optimism; willingness to collaborate; a general rejection of the scarcity mindset (which is characterized by knowledge hoarding and zero-sum thinking).
Why it matters
An abundance mindset helps give you the confidence to pursue and enjoy new opportunities that come your way. It might not matter so much to the people leading the transformation, but it definitely matters to the people whose roles will change. If they believe digital transformation threatens their job security or professional identity, they will thwart it at every turn, consciously or not.
On the flip side, if you can help the digital transformation skeptics understand why it’s happening and what they stand to gain as a result, there’s a good chance they’ll open up to the idea and even get involved. Organizational psychologist Kim Perkins advises leaders to explain the change in terms of market forces so they understand this isn’t driven by one person’s ego, then help them identify the possibilities the change will unlock.
“When you can imagine it for yourself, that’s when the real change happens,” she says. “And that’s when people get on board.”
How to cultivate an abundance mindset
- Listen to and acknowledge peoples’ concerns. Frame digital transformation as an opportunity to up-skill and make an even bigger difference for customers.
- Acknowledge what’s being lost. It can be as simple as taking a moment to publicly thank the team who built and looked after a legacy system that is being retired. Close that door so your team is ready for a new one to open.
- Ask skeptics to list their strengths, then think about how those strengths can contribute to the transformation itself and how they’ll come in handy after the initial transition phase is complete. This will help people feel like they’re in the driver’s seat, even if, in reality, they’re mostly along for the ride.
- Tap into the mind-body connection. Practice breathing deeply and evenly. Get in the habit of assuming expansive seated and standing postures instead of folding into yourself.
4. Ownership mindset
Characteristics: Driving toward outcomes vs. driving toward deadlines; a bias for iteration and evolution instead of sudden, drastic change; willingness to delegate granular decisions about the work; an acknowledgment that the work is never truly “done.”
Why it matters
Digital transformation isn’t a bookended project with a tidy start and end date. Similar to the products and services a company makes – be they consumer goods or B2B software – digital transformation is never really complete. What we tend to think of as “the transformation” is just the initial phase.
Why? Because nobody goes through the effort of digital transformation just to check a box and say they’ve done it. Companies do it to unlock their ability to achieve bigger, better things. So instead of making a series of changes and calling it a day, look at whether the changes produced the outcomes you’re after. If they did, great: now you can keep building on that. If not, try again with a new approach.
That sense of ownership and long-term accountability are critical for success whether we’re talking about digital transformation or business as usual. At Twilio, for example, teams own a customer experience end-to-end and are empowered to take the actions they believe will create the best experience possible. “Our teams are defined by three things,” CEO Jeff Lawson explains, “the customer they’re serving, the mission they’re on in-service of that customer, and the metrics that tell us whether we’re doing a good job.”
Companies that use metric-based goals and keep iterating until they meet them are more likely to have a successful digital transformation. By contrast, companies that set date- or task-based milestones to define the “end” of their transformation are more likely to backslide.
How to cultivate a product mindset
- Define specific results you want the transformation to bring about. Then socialize them around the company so everyone knows why you’re doing this in the first place and the signals that’ll indicate you’re on the right track.
- Delegate ownership of each aspect of the transformation to the people doing the front-line work. Empower those teams with the authority to make decisions and coordinate with other teams independently.
- Those results you want to achieve? Celebrate the heck out of each one when you reach it.