Why Digital Transformations Fail: How to Take Off and Stay Ahead

In the spring of 2015, a Procter & Gamble colleague and close friend, Brent Duersch, and I were just wrapping up a conference call with a top-tier consultancy on how to go about disruptive transformation. As Brent reached across the table to end the call, he chuckled, “Either we’re missing something, or none of these guys has actually done true digital transformation.” This was our tenth call in three days with organizations that had either undergone a successful major transformation or supposedly had a proven framework on how to do it.

Brent and I were trying to piece together the “how to” methodology for a disruptive transformation of our Global Business Services organization that had to be successful, sustainable, and scalable. We were starting to realize that although there were some nuggets to be gained via these meetings, perhaps we weren’t going to find the answer we were looking for.

Four years later, I now realize that our situation then is fairly common in today’s world. Executives, business owners, public sector leaders, academics, and even new hires in organizations all fully realize the disruptive power of digital capabilities in today’s world. They know that it is the preeminent disruptive threat of our generation, as well as its biggest opportunity. They really want to transform their work and their lives, but the nagging question is, “How?”

Perhaps you’re a leader who has invested time, money, and personal credibility into digital transformation already. However, you have a niggling doubt that something is not right, because while you see anecdotal success, it doesn’t make much of a dent in your overall business model. Meanwhile, the clock keeps ticking as large-scale disruptions of businesses, industries, societies, and personal lives continue unabated. Iconic names like Sears, Macy’s, Neiman Marcus, Tiffany, Harley-Davidson, and Campbell continue to struggle. It’s up to us as leaders to determine whether our organizations succumb or prevail in the opportunity of a lifetime.

I strongly believe that every change is an opportunity, and by that yardstick this is an opportunity of historic proportions. My P&G career of twenty-seven years provided me with vast experiences ranging from digitally transforming sales in parts of Africa to using AI to automate portions of supply chain operations worldwide. It allowed me to be on the leading edge of industry-shaping multibillion-dollar outsourcing deals and on hard-core organizational change programs such as the integration of the $10 billion Gillette company systems into P&G when I was Gillette’s chief information officer.

These experiences provided a unique foundation for me to tackle how organizations can face up to the biggest change management issue of their lives: transforming the core of their operations into a fully digital backbone.

So, rather than get discouraged by the lack of good insights from our meetings, Brent and I would double down on them. We would meet more than one hundred entities over the next couple of months, including industry analysts, strategic partners, research institutions, universities, peer companies, VCs, accelerators, and more. Mixing the nuggets from these with our firsthand P&G experience gained over time, some clear insights would emerge.

First, there are different shades of transformations possible, and you need to be diligent in targeting a complete and sustainable transformation during these disruptive times. Second, the surprising reason why as many as 70 percent of all digital transformations fail is a lack of discipline. And third, it is possible to apply proven failure-reduction approaches, like the disciplined checklist model from the aviation industry, to significantly improve the odds of success in digital transformation.

If you’re a business leader, a business owner, an executive, or a manager of people; if you work in corporate settings, in government, in academia, or in the nonprofit sector; if you believe that digital transformation is the ultimate challenge of our generation and that the issue is not “whether” but “how”; if you’re interested in hearing about how other organizations and people across generations tackled this issue, then this column is for you.

As my journey through P&G’s digital transformation of its shared services unfurled after 2015, Brent kept joking that I should perhaps document our approach. “Write a book!” he said. I found that amusing. “Me?” I said. “I’m never going to write a book.”

I may have been premature about that.

The book I did end up writing, and from which I'll share extracts via this column, mimics the five-stage model of maturity for digital transformation. Part I sets the stage, first by describing the dilemma faced by P&G’s Global Business Services to drive perpetual digital transformation, then by introducing the five-stage digital transformation model and the specific checklist steps that can be used to deliver success. Following this, part II explores the five stages of digital transformation in detail. For each stage, I describe the two most important disciplines necessary for success. Finally, part III demonstrates how all these disciplines can be assembled together to address the threat of the Fourth Industrial Revolution systemically.

My ultimate goal is to provide practical, tested, and reliable tools and ideas on how to thrive on digital transformation. I'll also share a “Checklist of Surprising Disciplines” and “The Five Most Exponential Technologies” that I think you’ll find helpful. 

[Part I will be covered in Tony’s next column.]

NOTE: This column is an extract from Tony’s forthcoming book, Why Digital Transformations Fail: the Surprising Disciplines of How to Take Off and Stay Ahead, launching this summer. Pre-order here.