Digital transformation: Why emotion matters

Want to boost your chances of leading a successful transformation? Consider its emotional impact on your team
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In this era of technology-fueled disruption, CIOs and IT leaders play a decisive role in make-or-break business transformations. Success depends not only on traditional factors such as which architecture they develop or the system they deploy but also on how they marshal the most timeless business resource: human talent.

Business transformations are becoming more frequent, and the stakes are higher than ever. According to a survey from EY and Oxford University’s Saïd Business School, 85 percent of senior leaders from a range of industries worldwide say they have been involved in two or more major transformations in the past five years.

However, today’s leaders can be blind to the emotional fallout of transformations among their workers, who often see these efforts as a pretext for job cuts – likely triggering steep employee turnover in a tight labor market.

[ Also read Digital transformation: 3 tips to minimize friction. ]

When leaders appeal to their teams on an emotional level, the research shows a dramatic impact: These leaders are 260 percent more likely to be successful at transformations than those who don’t. And the research identified six key drivers for leaders who did succeed: build, empower, collaborate, lead, care, and inspire.

To better cultivate these qualities and position your people to accelerate transformation, consider these three focus areas:

1. Change is constant, but stress shouldn’t be

Staying still amid constantly shapeshifting economic, geopolitical, and social challenges is not an option for businesses that want to thrive. It is more important – not less – to help mitigate the negative aspects of change instead of accepting them as a given. All the technology in the world is meaningless if leaders don’t change the culture and equip people to adapt to new business models.

Without that proactive touch, the toll on the workforce can be significant. According to our survey, underperforming transformations add emotional strain by 136 percent, including feeling sad, upset, and depressed. In today’s labor market, that can lead to talent loss.

Today’s transformations shouldn’t be a grueling march to a never-defined destination but rather an opportunity to reduce busywork, boost job satisfaction, empower, and inspire. A key difference lies in how leaders support and communicate with their teams throughout the transformation.

2. Our world is enabled by technology – but without trained people, it’s meaningless

Corporate technology investments have shifted from being a side dish to the main course. When properly equipped, leaders can mine more value from data, aid decision-making with machine learning or artificial intelligence, reimagine global supply chains and customer experience, and reduce their carbon footprint.

Convince workers of the company’s vision and the value they add and equip them with a digital mindset to thrive.

Reframe the dialogue around empowerment and collaboration. For instance, robotic process automation can stoke fears about layoffs. But empowering employees with the proper technology training can ease job loss fears, making workers more effective, efficient, and happy.

It’s an equation based on addition, not subtraction. Convince workers of the company’s vision and the value they add and equip them with a digital mindset to thrive.

3. Without a strong culture, transformations falter

Workers and leaders both agree that leadership is the top driver in successful transformations. Fostering collaboration, consensus, and two-way communication with workers from disparate groups is essential.

That may seem like common knowledge, but 50 percent of workers who experienced an underperforming transformation agreed that “transformation” was just another word for “layoffs” – and in follow-up conversations, leaders indicated that they were unaware of the emotional toll this inflicted on their employees.

Business leaders need to be able to answer the following questions before they set off. Are you close enough to your workers to identify early warning signals when things go wrong? Do you know the most effective mechanisms to change their minds or respond to their needs? What is the right balance of delegation, ownership, and empowerment, considering your team's personalities and skill sets?

Change is guaranteed; success is not. An organization’s transformation must center on talent as much as technology – and leaders determine whether they successfully unite or independently falter.

[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]

"As the EY Americas Vice Chair of Consulting, Raj Sharma oversees over 25,000 consulting professionals across the Americas. Together, the team brings forward a shared ambition of becoming the world’s leading transformation consultancy, trusted to help the largest and most complex clients generate defined and measurable long-term value.