Human factor, and digital transformation. Overcoming the mental barriers.

Successful digital transformation starts with people. At least, that’s according to our observations gathered from the hundreds of projects we’ve had the pleasure of participating in. Well-implemented systems and the right processes are of course critical to the success of the transformation, but without the commitment of teams and customers, without motivated professionals, and finally without an understanding of the role of people in coordinating machines and programs, implementing digital change is doomed to fail or achieve only semi-successful results.

So why don’t people engage in these processes as managers would like? What is stopping the company from changing its processes and systems to better and more effective ones? What is the reason for wrong decisions or late decisions in this area? Why do a large number of strategic projects fail? We will look for the answers in the nooks and crannies of human nature which, although the digital world is rushing at an ever-faster pace, changes very slowly, and human emotions and motivations may turn out to be the key to it.

Digital transformation, which is actually what?

Let’s start with the very concept of digital transformation. Digital transformation is a buzzword nowadays used in all cases, spoken hundreds of times at conferences and printed in the trade press. It is making a dizzying career and becoming a new Dotcom, Web 2.0, or IoT in front of our eyes. There is no doubt that a revolution is taking place that is forcing fundamental changes in the operations of all organisations.

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Companies must adapt to changing conditions, adjust to new trends and skillfully use emerging technological opportunities. If they fail to do so, they will disappear from the market even faster than it happened so far with the companies remaining in stagnation.

This transformation affects basically all areas of an organization’s operations, but at a high level it consists primarily in:

  • implementing and applying modern digital systems in a comprehensive manner,
  • adapting internal processes to digital handling,
  • working effectively with data,
  • achieving readiness for automatisation,
  • operationally integrating different departments and teams,
  • unifying customer service across multiple channels,
  • readiness to operate in a rapidly changing world – remote and mobile.

In summary, then, we can say that this transformation is about deep change at the organisational level that allows you to take full advantage of emerging technologies.

Why do companies have a problem with digital transformation?

At the declaration level, everyone today wants to implement such digital transformation and understands its inevitability. The results of surveys conducted among executives show a clear trend and in fact, you can no longer find managers who would not confirm that effective digital transformation is crucial for the survival of the company.

But what does this look like in practice? Much less positively, as many employees probably know from their experience. Many companies are stuck in stasis and taking mock actions. We see transformation in the form of lip service, i.e. superficial actions, oriented towards internal PR in the company. Digitalisation is often done with a “quick hands” method – more and more employees are employed, spending their time in front of more and more computers, into which they enter more and more data, faster and faster. However, this is not a qualitative change but a quantitative one and as such, it can be considered rather superficial. Strategic actions, which can and should transform the organisation, are often delayed, and the excuse is the lack of mature processes or insufficient operational efficiency.

In both cases, however, it is a vicious circle, because if the company operates with difficulty due to ineffective management, it will also find it difficult to change and mature in order to prepare a better ground for transformation. As a result, you are running idle while the market around you and your competitors are moving ahead. But there won’t be a better time to begin the true transformation than now.

Psychological barriers to digital transformation

Of course, no one is claiming that shifting a functioning company – especially a large one – to a different track is an easy task. On the contrary, many companies fail to do so despite their constant attempts. Digital transformation is resource- and attention-intensive and requires competence and time. All specialists know from experience the whole catalogue of barriers that hinder this process.

Among these are:

  • lack of vision and strategy for change,
  • lack of coordination,
  • lack of money,
  • lack of staff,
  • lack of competence and knowledge,
  • lack of procedures that can be automated,
  • lack of data management and processing.
The human factor and digital transformation EDISONDA

Apart from the well-known ones, there is also one that is not so often talked about on a daily basis. When creating and implementing a digital change strategy one very important aspect is overlooked – what is going on in the minds of employees and managers. And particular psychological aspects here are emotions and motivations, which, as far as we can see based on hundreds of delivered projects, are basically not talked about. Or at least not officially.

Mental barriers to digital transformation

These factors – often difficult to capture and measure – often slow down change or cause it to be implemented ineffectively. Without adequate knowledge of human cognitive and emotional functioning, without an understanding of how teams in different business areas work and what they need, and without emotional support at the highest level, digital change is very difficult, if not impossible to achieve. Understanding this aspect has to a cornerstone of any digital change management process.

Mental barriers – where do they come from?

So what is it about emotions? After all, digital transformation is not a Shakespearean drama? I would dare to say, however, that emotions play no less important role in it, and at the same time are highly underestimated. This area of human knowledge still has many unexplained threads. Researchers agree, however, that emotions occur universally regardless of culture or age and have a huge – though often unconscious – impact on our behaviour.

If we realise that companies are essentially organisations made up of many actors – from boards of directors to rank-and-file specialists, we can’t help but agree that how companies operate is indirectly influenced by the emotions experienced by the organisation’s team members and management. And just as in personal life, in companies their influence is often unconscious. These emotions also influence the way digital transformation happens or doesn’t happen because they play a role in the emergence of mental barriers.

Fear, sadness, surprise, and…. contentment

The natural reaction to a difficult situation, often interpreted as a threat, is fear. In the case of failure, sadness arises. In a situation for which we were not prepared, there is a surprise, which can have positive or negative components. Since corporate life is not unique to our psyche, these emotions occur in many of the typical situations that arise in companies. Joy is often experienced with teams together, while sadness or fear prefer solitude or the privacy of therapists’ offices. But let’s go back to situations related to digital change in companies.

One of the emerging reactions, for example, is the fear of automation, or more specifically, of losing jobs to artificial intelligence and robots. It’s hard to predict when exactly – as a species – we will become useless, but it certainly won’t be as soon as the most pessimistic forecasts for us predict, so this fear is hardly justified, but as an emotion, it is very real.

Emotions do not always have to result from objective factors – it is enough that there is a conviction of some danger, and the emotion appears automatically, interfering with the ability to objectively assess the situation. It is not surprising that in the situation of an expected job loss, people will be unwilling to cooperate on a system implementation project which may result in half of them losing their jobs as a result of the implemented automatisation. This might be a case for implementing new B2B eCommerce platform which might result in a making a lot of sales reps redundant (which does not have to be the case if done wisely).

Some projects, however, do not cause such unequivocal fear of the effects of implementation. Often they even involve hope for change. But when there is a desire to act, fear of failure is often another block. It is particularly strong in organisations that reward a more conservative approach and do not encourage experimentation. If employees involved in projects that did not work out are fired or relegated to less interesting positions, it is obvious that it will be harder to find volunteers who will take on transformational projects (often very difficult ones). Procrastination, excuse-making, and covert diversion will occur.

In many cases, however, this barrier can be broken and the project can start, but… it doesn’t work out. This causes understandable sadness, disappointment, fear of the consequences of failure. In the case of inconsistent management in the continuation of the strategy, lack of thorough investigation of the reasons for failure, and too quick resignation from the implementation of changes, after some time a state of permanent doubt may arise. “We can’t do it here” is a deeply rooted belief observed in companies, that no matter what one wants to do, the initiative is probably doomed to failure and the only solution is to stay stuck in the status quo. Lack of hope, sadness, and apathy follow.

EDISONDA-transformation-digital-human-factor

Such a belief – once it has emerged – is very difficult to overcome. It requires a fundamental change of thinking, a huge effort and example on the part of those in charge, or the involvement of “fresh blood” in the form of naive rebels who will come and do something, not knowing that it was supposedly going to fail.

At the end of this list, there is one of my “favorite” barriers, which is moreover difficult to detect because it is hidden behind a facade of reliability and good intentions. It is a situation of procrastination and remaining in a permanent phase of analysis and design, with simultaneous delays in starting the project.

It results from the conviction that the team has to build a great cathedral, and any less impressive and imperfect result will be a total failure. This belief causes everyone to focus on creating the vision, but no one is tempted to dig the cornerstone for fear of doing so in the wrong place. Meanwhile, after a few years, the project is already outdated because no one needs gothic cathedrals anymore – the world has moved on, fashions and technologies have changed.

Sources of belief in the necessity of perfect project implementation – extending the research and analysis phase. Paradoxically, positive emotions can also be a barrier to progress. With a high degree of complacency stemming from the good current business health of the company, the motivation to change is not very strong.

Momentary success can cause companies to settle on their successes and remain stuck in a false sense that their market position is unthreatened. They also sometimes avoid – perhaps through denial or fear – taking a critical look inside themselves, which is not conducive to making needed changes.

These are just a few examples of emotions that arise in projects, but enough to significantly slow down processes in companies. The key question, of course, is how to deal with them. But before I point out some ways of consciously managing emotions, let me also touch upon the concept of motivation, which is the other side of the coin of our mental functioning.

Motivation, or why we do what we do

The reason we act is always motivated by something. People do what they do because they want to or because they have to. Emotions define our attitude toward an object or value, and motivations define the object we pursue or avoid.

We go to work because we need the money, we expect promotion and recognition, but also – hopefully – because it gives us satisfaction, increases our sense of competence, and helps us realise ourselves.

It is worth mentioning here two very interesting aspects that may help to understand how people function in times of change.

The first is the source of motivation – it can be external or internal. The former are, for example, praise, money, or an expected reprimand or dismissal. Such motivation works, of course, but it is much less strong than the second type of motivation, namely intrinsic motivation, which has its source in values or beliefs. This could be, for example, the desire to achieve a high level of competence in a particular field and to be an expert in it. Or it could be the conviction that one’s work makes the environment better and is useful to other people. Apart from the source, motivation also has a direction – here it is relatively simple and we are talking about either pursuing a goal or avoiding it.

And here we come back to the professional situation. Without an understanding of what motivates a person in the context of their personal life, their team or the company as a whole, it will be very difficult to draw them into effective action on difficult projects. Unfortunately, there are no simple solutions here and this is one of the aspects of management that separates good leaders from average ones, i.e. understanding people and selecting them in such a way that they feel that they are fulfilled in what they do and feel motivated to act.

The key factors that come into play here, irrespective of the person, are the sense of purpose, confidence in one’s own competence, sense of autonomy and security, as well as understanding of the rules governing the functioning of the environment and the ability to anticipate. Additionally, a significant role is also played by values – both those officially communicated and those which actually constitute the basis for the organisation’s activity, which sometimes do not go hand in hand.

In essence, we can say that managers are faced with a choice. Either they will make team members find meaning in implementing digital strategy, feel personally responsible for the process, believe that they have the knowledge and competencies to deal with it, and feel the satisfaction of completing new challenges, or they will have to pay a lot of money or face severe sanctions in case of failure to keep the process moving forward. And still the chances of success will be much less than if they were carried along by positive and intrinsic motivation.

Motivation researchers generally agree that intrinsic, goal-oriented motivation is much stronger than external, punishment-averse motivation. Therefore, understanding team members’ aspirations, personal perspectives, interests and needs is crucial in managing a team.

Together and transparently

So what should leaders do to deal with barriers that stem from team members’ emotions and motivations?

  • First, start with research (here I encourage you to read our guide “How do you research employee needs?”). Both interviews and observations to understand where the problems, opportunities and biggest challenges are. In many projects we observe a lack of use of knowledge and experience of people on the front line of operations – customer service employees, salespeople, assistants, workers on the production line really know a lot about the operation of the company from the inside. Conducting reliable in-depth interviews and ethnographic research will not only give us knowledge, but also make us gain allies, because…
  • Second, lead the process collaboratively. A solution handed over for implementation without consulting the team is bound to be met with more resistance. People will not find meaning in it and will not feel ownership of it. From a personal perspective, there will also be a lack of sense of influence and autonomy.
  • Thirdly, change, its causes, and processes should be explained, i.e. adequate communication is fundamental. It is crucial for understanding, and understanding and predictability give a sense of security. The best communication is not announcing but discussing.
  • Number four, especially in difficult times, wise and decisive leadership is needed. Knowing that the captain is on the bridge, knows where we are going, and does not change course every moment, increases the sense of security and makes it easier to coordinate the efforts of the entire team, which knows what to do and understands what is happening.

By following these guidelines, we can reduce fear of change and uncertainty about lack of influence, build a sense of autonomy and meaning, build trust, let go of disappointment, anger, and sadness, and influence motivation in a conscious and wise way. This in turn translates very strongly into the effectiveness of people, teams, and entire companies.

Digital transformation starts with people

Number and computing power of servers, cost of licenses, connection speed, structure of databases and microservices – these are of course very important parameters that a company must take into account when trying to keep up with technological changes and a key issue for achieving digital maturity.  However, often when creating and implementing a digital change strategy one very important aspect of it is overlooked – employees – their needs, motivations and emotions.

And the starting point of digital transformation is neither cloud, nor data, nor computers, but the team that we have, and without which the process of organisational change will probably fail.

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