Transcript
Host
Next up, we have a dual presentation from Andy and Alan from Daggerwing Group. In this presentation, Andy and Alan will be highlighting why so many transformations fail to reach business expectations and explore how to create success through behavior change by adopting people-centric approaches.
Something we hear a lot of during – in and out of these presentations – that people, the cultural elements. So, we’re going to be diving deeper into those common biases which can impede emotional progress and how leaders affect the success of new programs with their own style and contribution.
So, we’ve got the presentation with Andy and Alan up first, and then we’re going to be joined by both of those for a Q&A session following on from that. So just going to play that presentation now from them.
Andy Rugeroni
Hello and welcome to our presentation that explores some of the factors behind why digital transformation can’t truly happen without emotional change. I’m Andy Rugeroni and I’m a Principal in Organizational Change from Daggerwing Group.
Alan Kittle
My name is Alan Kittle, also Principal, and I’m a Creative Director.
Andy Rugeroni
If you don’t know, Daggerwing Group, hello and welcome. A very quick overview. We’re rated as a top 10 global change management consultancy. Not because of our size, but because of our ability to impact clients’ businesses positively. We focus on the people side of change for just about every type of business transformation, and we’re known for being practical, hands-on, and helping to make sure your change sticks.
We’ve got a lot of experience in digital transformation. Just three examples here at Bayer, we really supported them to implement new multi-channel ways of working across their global marketing organization. And that was around working with the marketers to really understand how the changes impact their roles and to help them live the new behaviors required to use those tools and processes.
At 3M, we supported an enterprise alignment around putting customers at the center of their marketing business model and helping them to adopt an omnichannel approach to reach their customers through new digital sales methods. This involved making some – supporting some structural change, introducing new roles and positions, and helping them with the capability development of their new talent.
And at Nissan, we worked with them and their agency partners to put together a new operating model for how they worked with their agencies around a new approach to marketing. And this really was the full, full range of change management from defining the change strategy and implementing the change plan.
But before we start, I just wanted to pose my colleague Alan a question here: Allen, how many digital transformations do you think failed to generate the returns and exceed the original investment?
Alan Kittle
25%.
Andy Rugeroni
Let’s go higher.
Alan Kittle
Wow, okay, 60%?
Andy Rugeroni
And again, higher.
Alan Kittle
Come on. 80%?
Andy Rugeroni
And the answer is 75% of digital transmissions fail to generate ROI. And if we think about the next question on from that: how many of that 75% do you think fail to get that return on investment because of human centricity, lack of human centricity?
Alan Kittle
Oh, 50/50 I’d say.
Andy Rugeroni
I think you’ve got to go higher again, Alan.
Alan Kittle
I’m such an optimist. 70%.
Andy Rugeroni
You’ve hit that bang on it is in fact, 70% fail based on a lack of user adoption and not having a strategy for behavior change.
So, what’s going on? I think in in 2020, there’s more pressure than ever before for businesses and employees to transform and adopt digital ways of working and tools.
Let’s explore some of what’s happening. You’ve got collaboration in communication with customers and colleagues has become virtual. Meaning getting used to new ways of selling, co-creating and connecting. Agile at speed has come to life by necessity, so new business models have needed to ideate and launch more rapidly than anyone thought they could be.
And your in-flight digital transformation programs have been accelerated and new ones launched. Meaning employees are dealing with greater amounts of complexity and ambiguity than they thought they would be.
But it’s important to note that systems and processes aren’t the defining factor in creating digital transformation. People are. Now more than ever in that situation that I was just explaining, dealing with those human change factors that influence your program’s success is really important.
And what we’re going to do today is explore some of the challenges that focus on behaviors and emotions that are getting in the way of digital transformation success. And we’re going to share some examples and ideas about how you might address those.
So, why do many digital transformations fail to meet business expectations? It’s usually because of human factors like these.
Starting at number one, the urgent reason for change isn’t communicated. So that burning platform isn’t put in place.
And secondly, the destination or the compelling vision for the future hasn’t been properly articulated.
Thirdly, work hasn’t been done to involve employees in sufficient co-creation, meaning that the ownership of the change isn’t there.
And then fourth, some common biases aren’t identified and then addressed.
Number five, leaders aren’t necessarily prepared enough to drive the change.
Six, the organizational systems and other initiatives aren’t aligned with where the change is going.
Seven, you’ve got that focus on building new skills, isn’t there.
And then finally, by no means least, the change flies potentially against some of the organizational culture and is rejected by the by the mass.
We’re not going to speak about all of these today, but we’re going to focus in on these three that we see are really important in this moment in time. So, those three – the common biases not being surfaced and addressed, the fact that leaders are underprepared or unequipped to necessarily drive the change successfully, and the third, focusing in on that culture problem. How can you ensure that your change goes with the organizational culture versus counter it?
We’ve boiled those three areas down into three key questions that we’re going to look at. The first, what emotional biases are getting in the way and how can they be addressed? The second, how would you enable leaders to effectively drive your desired changes? And then third, how do you understand and use an organization’s cultural preferences to remove resistance?
I’m going to take you through number one and my colleague, Alan, is going to take over and take us through two and three.
Let’s start with the first question. What emotional biases are getting in the way? And how can they be addressed?
So, there are three biases that we see time and again as we work on digital transformation. The first of which is the status quo bias, and this is about preferring things to stay the same by doing nothing or by sticking with the decision made previously even when only a small transition or activity to change behavior is required to get the benefit of that change.
So, you typically hear people thinking around, “well, what we have has worked well up until now for our current situation. Why should we adopt new digital tools?” And this is typically one of the reasons that’s quoted when groups want to stay with their old way of working or with their old, customized tools as opposed to trying something new for the benefit of all.
The second one is the loss aversion bias. And this is a tendency to prefer avoiding losses to acquiring equivalent gains. Some studies have suggested that losses are twice as powerful psychologically as gains. So, you can hear people talking about, “we stand to lose a lot more than we do to gain by adopting these new ways of working and tools.” And this is something that you come across against when you’re asking people to give a little in terms of global standardization.
And finally, the third bias that we talk about is the availability heuristic. And this is when people make decisions based on the readily available information or things that they’ve heard frequently or recently. So here, you know, you might hear someone saying, “look, everyone seems to be accelerating in digital to stay relevant. We need to take it seriously.” This is around – this is a bias that instead of the other two that you would really want to leverage.
So how do you overcome or leverage these biases? Let’s take them one by one again.
For the status quo bias, it’s really important that you communicate a strong mission statement from leadership. You can see, for example, there we’ve got our everything is a remix creative identity. One way you can help leaders to communicate that is by involving your creative team – someone like Alan – to ensure that the mission statement really resonates and cuts through all of your organizational communications.
And secondly, it’s about really ensuring that you’re encouraging innovation, co-creation and sharing of ideas. And that’s where ensuring you have sufficient influencers, task forces, and ambassador groups set up to support the change.
The second is they’re dealing with the loss aversion bias, and this is – you’ve really got to focus here on re-addressing that perception of loss to gain. An example here, how you can do that is about using a day in the life approach. So, imagine when you’re walking through what the new reality might look like for digital transformation and you’re showing what the benefits might look like day to day for an employee. Also, you can address within that the perceptions of loss – and do so empathetically because it’s really important that you don’t just focus on the upside, but also address some of those feelings of loss and to really ensure that you’re being empathetic, but also explaining why potentially some of those were things that may seem like losses need to be gone through.
Finally, the availability heuristic and Alan going to come on in and talk a little bit about this one later on. This is about stories and experiences. So, here you have an example up there with the shot of the conference. This is about creating an experience at a moment in time that increases the novelty or drama around an event – so that it becomes more readily available and memorable in people’s minds.
So, that’s it for our first question. Alan, take it away with number two.
Alan Kittle
Thanks, Andy. Now I’m going to tackle question number two, which is how do you enable leaders to effectively drive those desired changes?
The good news is the fundamentals haven’t changed. Everything stays in place. You have to have a clear understanding of that future vision. You have to take your people along the journey with you. You have to give your people the tools and the support that they require and help them to have accountability for the changes to make them stick.
But what feels different now in this new normal? One of the things that we need to absolutely take care of is how we let leaders experience and practice their empathetic skills. It’s more important than ever. When we’re more distanced physically, how do we make sure that people stay close to their leadership?
But, in the same instance, we need to give leaders the space to do what they need to do. It’s important that they maintain their role, that they feel as if they’re in control of what they’re doing. And at the same time, they also have to have space to learn and to feel a couple of times and then to come back again. So, building that muscle, creating a tolerance for failure is super important to them too. And again, when other people are struggling sometimes to retain information, when the world around them is posing some frustrations and confusion, keep things simple and keep things seeming as if they were as small as possible. Break down the parts and the pieces of the journey that you’re going through. Reward the success and move forward in that way.
This is one example that we found, which we think perfectly sums up how somebody even at the highest level of an organization can really infuse a reason to change, drive the change, create the supportiveness required for everybody inside their organization.
So, Louise O’Shea, who is the CEO of Confused.com, she decided that they needed to dramatically change how they were using technology, and that would be their differentiator in this space. Obviously, Confused.com is an insurance marketplace. They wanted to use more artificial intelligence. They wanted to use automation. Those two things were going to speed up that process and give answers to their customers faster, which would make a significant difference to their value proposition.
She also, though, had a fear that if we brought in outside help and it didn’t really support their own employees through the digital changes required, that we’d be left a little bit – as Andy talked about this loss aversion, it would feel more as if, well, “that’s something I’m not able to do. Somebody taking control of that, I don’t feel as engaged with this change as I would like to.” So, she built an internal school for technology which taught each of the different employee groups the specific things that they needed to learn and create more resilience, create more a general understanding of the process. And we scaled them in a way that made a significant improvement to the success of that company.
How do you understand and use an organization’s cultural preferences to remove resistance?
There’s something obviously deeply psychological about an individual’s relationship with their company and the culture. But then all of those things typically roll up into one larger piece. And if we think about the journey that a transformation takes a whole organization on, it starts with the clear articulation of that transformation vision. But then there are typically three stages that we see on that journey. And the key point to remember is that people travel on through these three different stages, at slightly different weights. And so, for us to be able to segment and understand and keep the interactions alive for us to understand who’s at the hearing stage in terms of as we raise awareness of what the business is trying to do to create the new reality, what that means to the company. Or who is in the believing stage, which is about building that trust in that action and calling where we need to go wrong? It’s okay for us to say we’ve moved on a little bit to the belief stage, much closer now across the organization. To finally go to that living stage where truly the organizations are understood and embedded the change that the environment has now become much more supportive of that vision and that purpose. Everything seems easier than it did before. That’s when you truly understand that we’ve come to that rate of change. Again, to make sure that we succeed, the cultural piece of your organization is super important to make sure that you map against those needs how you’ll value in your communications and how to best use that culture to your advantage.
So, just as individuals have personality traits, so do organizations. And if you understand what the personality of your organization is, you can use those things to map out the types of communications that you use, the types of behavior change strategies that you build into your plans to make sure that your digital transformation can succeed.
And there is a color wheel that we use. And again, there’s way more detail in this, but this is a nice simple way to break down an organization. And you can map them out and decide which of these colors they are. So, if we start in the top left-hand corner, for instance, if they’re blue organization, that means they’re probably more interested in the systems and how things work.
And so, they’re more likely to be task driven, and more likely to favor reliability. So, if you think about something like Dyson, there, as an example. Very engineering focused, it’s all about the understanding of how things worked and how that creates a successful outcome.
If you’re looking at something like Uber, for instance, they’re much more in that red space. So, they’re absolutely still about creating tasks and delivering tasks. In this instance, obviously having rights share. But they’re much bolder in their approach. They’ll make a big, bold statement. They’ll create these impressive experiences. And that is the way for them to drive their people and their customers through that change.
If we take something like Virgin and Richard Branson, the classic example of yellow, they love to lead through fame. So, again, they’re very bold in their approach. But for them, it’s much more important that the people are driving the change rather than a series of tasks. So, that’s where they come into their quadrant, if you like.
And the final quadrant is the greens. They’re much more around consensus-driving and creating relationships. So, they will use their people and work with their people to make sure that what they’re doing is favorable to them and to their customers. So, these are examples of organizations and the types of spaces where you think they might fit into. And we’ve got a couple examples now where we’ve used this approach to help to determine how we help follow change through for an organization.
This one is an example of an organization who are yellow and so therefore, again, they are much more interested in how to be bold, how to work with their people to make sure that the transformation is taken through in that way. And so, we helped to create a story visual and a visual metaphor as a way to cement all of the work and to focus people’s attention in on what was changing, why that was changing, and then the reasons and the ways that they would benefit from that.
So, we create a variety of experiences to help to tell the story. And that aided leadership and aided employees to work through – in their own way – what the changes look like for them.
One of the things that we talked about earlier was the availability heuristic. And how do you take a moment in time, such as an event to create some experience that demonstrates the benefits of adopting a new change? In this instance, it was to embed a much more of a customer centric approach within an organization.
Actually, a very blue organization, which is interesting that the creative represented blue as well. But we had a situation where there had already been a model built – a new model for how to become more customer-centric within the marketing arm of the business. And so this was truly a martech transformation. And so the awareness was strong for this new approach. But adoption was lagging behind where we hoped it would be, because people just couldn’t quite let go of everything that they had done before. They were so wedded to the previous marketing approaches, they felt they were very successful. So, we had an opportunity at the global leadership conference for us to bring together an experience which would demonstrate the value of this model.
Now, because blues and their organizations are very persuaded by detail and by data and they like thoughtfulness, and they like to understand how those tasks and how these changes will actually make a difference to them. We created an approach which used them at the heart of the experience. They were effectively part of an experiment that we matched their reviews of the event, and we created an index. And that index was visualized throughout the whole event. And then at the very end of the meeting, when this group who are responsible for the new model had their presentation, they revealed that the organization, everyone in that room had been part of this experiment. They had been shown how being more customer-centric, how using technology, how using creativity actually created a superior experience.
Andy Rugeroni
Thanks, Alan. Absolutely great stuff. I think we’ve come to the end really of looking and exploring those three questions. So, we hope you’ve enjoyed that. Just falls to me to give us a little bit of a summary of what we’ve done.
We’ve been talking today about the fact that there’s more pressure than ever before to adopt digital ways of working and tools for employees. Yet this has come at a time when the speed of change, the complexity, potentially the difficulty of the situations where employees are struggling to adopt new behaviors at home and at work means that this is a difficult time to get change through amongst employees.
And really, it’s about addressing some of the key human factors that can get in the way of your change, that you’re going to have a greater chance of success. So, we looked specifically at three barriers: the fact around some common cognitive biases, the role of leaders, and then how you can address ensuring that your change approaches work with, not against, the organizational culture of your organization.
And we hope you’ve seen some of the ideas and some of the thoughts about how you can take a people-centered approach to deal with those barriers. The good news is we’re changing faster than ever before. I think this year has seen the rate of change really increase.
So, I think what we’re saying is that with some tweaks and some careful attention to the human side of things, as well as the process in the system, we’re going to be geared up to make digital transformation happen quicker and more successfully than ever before.
So, we hope you’ve liked our presentation. If you’d like to discuss or talk about any of these things, please do get in touch with Alan or myself. Otherwise, thank you very much and have a great rest of your day.
Bye bye.
Alan Kittle
Thank you. Bye bye, now
Host
They’re in the room with me, have been communicating with them in the chat room. So, Andy, Alan, if you could, unmute mics and get your cameras rolling. And we’ve got some good questions in from the audience following that.
Alan, I can see you. How are you doing?
Alan Kittle
Good, thank you. You?
Host
Yes, very well. Thanks, Andy. How are you?
Andy Rugeroni
Hi, Chris. I’m very well, thank you.
Host
Good stuff. Well, thanks for that presentation. Some nice insights. And it’s kind of one of the common themes that we hear about within digital transformation. The struggles, the challenges that organizations face. So, really nice to hear your insights in the work and how you are approaching that. So, thanks for sharing those insights.
We’ve had a few quite interesting questions fly in from the chat room on the conference side. So, we’ve got this from Mandy. Do you have any advice for leaders and managers on how to support their teams if they’re resistant to change, or lack digital literacy?
Alan Kittle
I’ll take that one. I think every organization obviously is slightly different. I think that the example we used to share there with Confused.com was a really good one. You know, by my understanding, her team’s abilities and the new skills that were required and the gaps that existed. Louise was able to work with her team to implement that new learning and development support approach.
It entirely depends on where your organization is really on that digital maturity stage. I think it’s – you have to really map it out and assess your people and think through where they are today, where you’d like them to be tomorrow, and what kind of approach you can take to get them there.
And so, for leaders, it is just aligning with the other executives and with your HR department, and with just a skills piece to truly find out what’s required. And kind of support your people. There’s no sense in feeling as if your team aren’t capable. Obviously, they’re highly capable in the work they do today. But when there’s a transformation required and there’s a new type of behavior or new skill set required, then it’s better absolutely to look for a learning development process and upskilling folks rather than think about hiring in new people.
Host
Nice. Yeah. Andy, do you have anything to offer with that one?
Andy Rugeroni
Yeah, I think the part of that is on two items. One is making it bite sized. So, if they’re struggling with digital literacy, then whatever learning solution and approach you adopt, it’s got to be boiled down into short, sharp sort of learning interventions. And particularly one thing that we’ve been doing is sort of combining kind of the leadership angle and those bite sized learning elements. So, you will see one of the leaders of a function potentially is less digitally literate than they would like to be. Being filmed, actually learning how to do something on Teams or learning how to do something on Workplace. And then we’re using that to one – show that it’s okay to be learning. It’s okay to fail and not really have a clue about what you’re doing at the start and two – it’s about people who are able to look at that, get that content just in time, and then to try it themselves in a virtual scenario. So, that’s how we’ve been trying to approach it when you don’t have these big classroom sessions where you can go kind of digital literacy 101.
Host
Yeah, of course. Good answer. And then another one that’s coming from Jean Luc. I have not seen that model of organizational personality using what looks like the insights framework. Are you able to share the structure of the model to find which quadrant an organization is?
Andy Rugeroni
So, let me take this one. So, this is – he’s right in identifying the insights discovery model then. That’s one of the models based on Carl Jung’s psychology theories from back in the 60s. What we’re trying to do there is that this is really a yardstick. So, this is never going to be a 100% accurate approach, because obviously organizations are built from hundreds, maybe thousands of individual personality types. What we’re doing here is trying to use a model like that to give us a clue in how to shape your change interventions in your stream, to make sure that the creative interventions don’t really get rejected and that you’re kind of pushing at an open door with the types of things. So, this work – this kind of approach works better if you know the organization that is going through the transformation.
If you don’t know the organization, then you’ve got to go through some kind of culture assessment of that organization where you look at their processes and kind of try and analyze where they pop out. But it is, in essence, the same framework as the insights discovery framework.
Host
Sure. I think you touched on a little bit there. Do you have any advice on the best ways to overcome bias within the workforce that’s either limiting transformation or adoption of kind of digital tools, technologies, leadership kind of thing?
Andy Rugeroni
I think those – so the three that we really picked out there, the start. Of those three – currently, at the moment in our work, it’s the loss aversion bias is the one that is coming through super strong at the moment, obviously, transformation programs are accelerating. You generally find if you’re – say you’re in a marketing department, say, for a pharma company, not just the one digital transformation you were going through, suddenly you’re going through three all at once. And most of them, if you’re sitting in a country, involves some kind of standardization or globalization of approaches.
So, what we’re finding is really to enable people to give up something that is perhaps more tailored to their needs for the collective good. You really need to stress on the change vision, the vision and the collective benefits of making that change.
So, there’s no super-secret to this. It’s about if your change program doesn’t have a creative aspect that is targeting emotion as well as logical reasons, then people are going to struggle to overcome that bias, because the loss aversion bias is quite – it hits you in the gut.
When you’ve spent a lot of time making your own approach that works for your specific stakeholders and needs. That’s an emotional tug to kind of give that away to something that may not be quite as good in your mind.
Alan Kittle
I think – just to add to that – I think one of the things that we try to do is build a persona approach, which would be very similar to a marketing approach for consumers, for instance. So, as we mark through that process with each of the different persona groups that we choose. Understand the pros and the cons of the change and where they may lose in some places, they are clearly going to gain another. And so how do we emphasize and have more of a positive spin on the things that they will gain, the benefits of the change which we hope, you know, will be enough to persuade them to leave the other pieces behind? It’s very human. Treat all of us to think that often this resistance is absolutely the easiest way. And often there’s a tipping point where you do find one or two things that you can tell a group – can tell what seems like an individual – that sometimes these are the reasons why you should change your behavior, these are the reasons why you have to understand the process for going through and why adopting it is good for you. It comes back down to “what’s in it for me?”
Make those compelling. Make them persuasive. Understand the arguments and try to continue to push those forward in your comms and your interactions with them.
Host
Nice. Look, Andy, Alan, thanks so much for joining us. Thanks for the presentation. Some great perspectives there on the work you’re doing. And thanks for those answers to those questions as well. Good to get an inside view of what you’re doing.
If people kind of have more follow up questions for Andy and Alan, obviously connect on LinkedIn, I think on that last slide as well there are your email addresses. If you take the stream back a bit and pause it on there you can grab Alan and Andy’s contact details and find out a bit more about what they’re doing.
