How Human Flaws Lead to Digital Transformation Failure

Written By: Eric Kimberling
Date: February 17, 2022

There are many reasons why digital transformations fail. However, the most common root cause may come as a surprise.

Often when projects fail, aspects like poor project management, customization of technology, and lack of resources come into focus. Unfortunately, many organizations do not understand that the core issue of these failures is human behavior.

Over- Optimism

Humans are optimistic, especially when advancing within an organization. Though a positive attitude is an important asset, there should be a level of rationality and overall awareness of the challenges of changing technologies.

To give an example, if a team is reviewing potential technologies, system integrators, implementation proposals, etc. Software sales reps will over-communicate optimism in order to harvest an organization’s engagement. Even if this isn't exactly actuated.

While optimism is a good sign on the surface, risks may arise at any given moment during the digital transformation. It may sound counterintuitive and uncomfortable, but it is essential to stay grounded and within the reality of the actual capabilities.

This doesn’t make sense, “To give an example: if the team is looking at potential technologies, system integrators, implementation proposals, and sales reps will over-communicate optimism in order to harvest an organization’s engagement. Even if this isn’t exactly actuated.

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Trusting the Experts

When most organizations go through digital transformations, the lack of skill sets within a team is noticeable.  Chances are high it is not in-house, which is when it is time to turn to the experts. Unfortunately, what ends up happening is over-optimism trusting the experts to a high degree.

First, we want to define “expert”. Though a software vendor or system integrator may be an expert in the system, they are not when it comes to your business. These stakeholders are going to say that the implementation will take less time, less money, fewer resources, and less risk. The problem with this I, without the industry knowledge and experience in-house, it’s impossible to call out this over-optimism.

Trusting the experts is good when done in moderation, but make sure they are challenged. It is critical to do what is best for the organization and be realistic about what is going to make the most sense for the future.

Some of the ways this can be done would be these key points:

  • Understand the culture
  • How risk-averse is the current culture?
  • What is the tolerance for risk?
  • What are the change impacts of the organization going to be?

All these dimensions are just a few examples of what will determine the timeline, cost, risk profile, and resource commitments.

Internal and External Bias

Humans suffer from these phenomena of selective hearing. As a result, there are personal biases, and this is true for both external consultants and software vendors trying to sell products and services.

This can also be the case for the internal team. They also have knowledge limitations and hold their own biases of things they have seen work now and in the past. These gaps create a distraction from making a major decision to how the overall strategy is executed. Watch out for those sorts of biases because this is something that can be very destructive and very harmful to a digital transformation.

To give you an example, we have clients looking to deploy single enterprise-wide ERP systems. Their goal is to automate everything from start to finish. They are allegedly providing the silver bullet that will solve those problems. This creates a bias and a blind spot when it comes to executing that strategy.

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Group-Think

Another familiar pain point from the human perspective is the concept of groupthink. Organizations tend to hear from multiple people the same thing. This herd mentality can cause misinformation and ineffective strategies. There could be a project team that is in the war room for months or even years on end and without knowing, the team begins to feed off each other and only hear the perspectives of those around them.

The same cycle may also come from multiple consultants, system integrators, and software vendors. They start telling a pervasive message that supports them and is in their best interest. This then becomes the perceived reality, even when that’s not the case.

This perception breeds failure to see other risks because of groupthink. Everyone is excited about the project and, through working on the design and technical issues, the overall transformation perspective is misaligned. As a result, the likelihood of failure increases.

At that point, usually, those risks are unfixable. It is essential to dig beneath the surface of what is happening outside the four walls with the project team and understand some pitfalls of one-sided thought processes.

"C.Y.A"

Another human behavior component at play in many digital transformations that can lead to failure is this dynamic of covering your own – a%$.

For example, If I am CIO or a project manager and oversee a transformation, I want to make myself and my team look good, and therefore, I am motivated to paint an overly positive picture of the project. Chances are, I might downplay any risks and try to deal with them in secret in order to mitigate any points of concern or fear within the organization, particularly among peers and superiors. This C.Y.A. model is seen throughout organizations. It can be very damaging, and it is a big blind spot for organizations.

Failure to See the Big Picture

When thinking about digital transformations across an enterprise, there are nine issues to be aware of to ensure project teams understand the big picture:

This list must be executed as part of a digital transformation, and if it is not, there is going to be a problem. It is way too much for anyone or even one team to manage. One of the failure points in relation to human behavior is the difficulty grasping all the different moving parts and understanding the big picture of tying them all together.

The vital role that we frequently play with clients is helping them know what that big picture is, how decisions they make might affect downstream choices, how risks mitigated, the flaws in one area, etc. Sometimes, just by having that experience and foresight to understand what is happening within the big picture, is where the improvement ultimately is.

Big picture thinking is another familiar dynamic we see within human behavior. The most significant human dynamic in digital transformation failure is that change is not fun. It does not matter how much involvement there is with change management. In general, the reality is that as humans, we struggle with change.

The core nature of humans is to work to adapt to change. Organizational change management is the single most critical thing that needs addressing as part of a digital transformation. Change is typically resisted, even if it’s unintentionally – it’s simply human nature that change is uncomfortable.

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Resources

I hope this has helped put some things into perspective when it comes to human flaws and digital transformation. These are just a few tips to keep in mind as you begin to implement new technology. I encourage you to download the Guide to Organizational Change Management. This is something that’s very important if you’re a change practitioner, or if you’re trying to understand the people side of change.

Please also download our 2021 Digital Transformation Report which provides best practices for how to deploy technology, including organizational change. If you have any questions regarding the human side of digital transformation, please don’t hesitate to reach out to me directly. I am happy to be an informal sounding board as you move through your digital transformation journey.

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Author:
Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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