Humans: The most crucial component of a digital strategy

One of the questions I am most often asked by executives is this: How can I bring about a successful digital transformation in my organization? They ask because digital transformation is one of the top priorities facing businesses today, but it is not that easy to achieve and the costs of failure are high. A 2017 survey of tech leaders by software company Couchbase found that more than half (54%) of tech leaders believed that their company would go out of business, or be swallowed up by a competitor, within four years if it failed at digital transformation.

So what makes for a successful digital transformation? I might surprise you here when I say that it’s not simply about spending millions of dollars on the latest technological innovations. Of course, investment in technology – especially emerging technologies – is extremely important, but algorithms or databases in themselves cannot transform an organization. In fact, the success of a company’s digital transformation rests on exactly the same fundamentals as any other business endeavor: excellent people, caring, committed and competent leaders, and a strong sense of purpose.

Think about it. While the technology that we use today has changed significantly from the technology we used 20 years ago, the fundamentals of what makes a business great haven’t changed at all. Great businesses are powered by great people, who are inspired by the work they do and motivated by leaders who value them as individuals. The companies that really get this point are embracing new technologies today precisely so that they can attract great people. They know that they are competing with the tech companies for the best talent, so they often use the fact that they are employing cutting-edge technology to do new things as an incentive when they are hiring.

So where does purpose fit in? Obviously, digital transformation should not be a purpose in itself. The whole point of technology is that it enables an organization to be more effective at fulfilling its primary business purpose, whether that is delivering organic produce or running a communications network. So every employee must both understand how digital transformation is going to help the organization achieve its purpose and want to be a part of that transformation as a result.

Another key component of successful digital transformation – and one that clearly involves people – is collaboration. For collaboration to be effective, organizations need to acknowledge that not every project they work on is top secret and instead define some areas where it would be sensible to collaborate.