Why Digital Transformations Fail summary

The Foundation stage is where digital transformation begins. This is when organizations start automating and digitalizing processes, using technology to improve efficiency and laying groundwork for deeper change. Many companies stumble right at the start by making a critical mistake: they outsource the problem.

Digital transformations fail when leaders over-delegate. The technology moves too fast for hands-off management. Leaders need personal commitment to generate sufficient momentum for transformation to actually work. Singapore offers a striking example. The country has ranked number one on the World Economic Forum’s digitization index, and former Prime Minister Lee Hsien Loong – a computer science and math graduate – ran all digitization programs directly out of the prime minister’s office. No over-delegation there.

What does committed leadership look like in practice? Leaders must actively translate business goals into actual transformation strategy elements. They also need to engage in barrier busting throughout the transformation. As change happens, barriers inevitably appear – acquisitions create complications, legal requirements shift, tax codes change. Leaders need to push past these obstacles, whether by redesigning financial reporting measures or rescheduling cut-off dates. Whatever it takes to keep up momentum.

Beyond committed leadership, the Foundation stage demands iterative execution. When Amazon launched in July 1995, it was just catalogs of books. The algorithms and slick design we see today emerged through numerous rounds of improvement. They built it step by step. This is the age-old advice of breaking large projects into smaller, manageable chunks.

When transforming an entire organization, create a portfolio of different projects. The portfolio should include some large bets alongside smaller, surer bets. This allows you to hedge your risks, while still generating enough successes to get you to where you want to be. 

Speed also matters enormously. Not just because technology moves fast, but because speed generates motivation, momentum, and the right mindset. Many organizations fail to develop enough velocity because of a “clock speed” issue – the normal pace of decision-making at a company is simply too slow for successful digital transformation. To remedy this, include time goals alongside your digital transformation efforts and actively respect them.

Another kind of velocity impediment is the “two worlds” problem. Existing operational procedures – legal requirements, HR protocols, compliance issues – get in the way of rapid structural change. One solution is introducing a process “firewall” that shields digital transformation projects from the full range of standard operational procedures. This allows the new to emerge without being strangled by the old.