The Five Stages of Digital Transformation - and how to help your people adapt to change (2024)

The success of the human race has long been attributed to our inherent adaptability. Since the emergence of early hominids from the African plains 5 million years ago, we’ve adapted to new climates, new terrains and new technologies.

But humans’ capacity for adaptability does not mean change is always easy. Often when we are required as individuals or as organisations to move on to something new, we must first let go of how things were before.

Most of the time we navigate change with no more than a passing thought about what we’re leaving behind. But, when change is thrust upon us by outside forces, transformation can feel like a shock to the system, even a threat - and we’re more likely to cling to the old ways for dear life.

McKinsey often cites that over 70% of digital transformations fail. The statistic can be debated, but anyone who’s worked in organisational change will agree, organisational failure to adapt to change is common.

At the heart of failure is often the much overlooked human component. Whether this is introducing a new piece of tech, new workflows, or completely restructuring a business - transformations can feel confusing and chaotic to the humans required to let go of the old and adapt to the new.

I have written before about what can go wrong if we introduce organisational change without ensuring buy-in from all stakeholders. As change makers, it is our job to meet people where they are, without being drawn into their fear or discontent.

By meeting our people where they are on the transformational journey, we can try to understand the emotions and reactions they experience and adapt our actions accordingly.

To help your people adapt to and even embrace change, it’s useful to understand the 5 stages of transformation response.

Stage 1: Shock & Denial

The first reaction to change is shock and then denial. Many people informed of imminent change - a new plan, workflow, or technology - will resist by expressing disdain or simply ignoring the news and bedding more deeply in the status quo. As a transformation leader, your best bet here is to clearly state the headline ambition without letting yourself get too entangled in discussions about WHY innovation is needed and what was wrong with the old way. Criticising the old can sometimes cause people to feel they must defend it, further entrenching resistance to change. What’s important is to communicate that change IS coming and, crucially, that you will be there to support your people through it.

Stage 2: Sabotage

Don't be surprised if you find yourself actively undermined. Employees may ignore a summons to training sessions, and even tacitly opposing board members or senior execs may withhold information or try to undermine your expertise. From silent protests, to covert whispering campaigns and explosive outbursts, hostility to change is not uncommon. It’s not uncommon to experience attritional behaviour, even self-sabotage. Anticipate resistance; communicate clearly, remain sympathetic but stick to your guns.

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Stage 3: the “slow no”

As the initial shock and sabotage efforts have subsided, you might be forgiven for believing that the change you’re tasked with ushering in has been widely accepted. But be aware, this is the moment where anyone with a personal channel to the senior stakeholders may decide to use it. Common strategies include requesting exemptions or special treatment (e.g. “you must let me keep a manual spreadsheet for when your new system fails” or “my team should be exempt from the new processes” etc.). This can take place while overall people seem to be saying “yes” to the change, which is why I call it the “slow no”; you may not even realise it’s a “no” until very late in the process.

You may also find masked objections - for example, where appeals to “higher-ups” ostensibly agreeing that change is required but that the pace of change should be slowed down (e.g. “let's derisk by executing in slower stages so we can PROPERLY evaluate success” or “I believe we can achieve these goals by building this solution ourselves instead of buying it”).

These types of appeals typically mask as rational suggestions, but be under no illusion - they’re often designed to derail change. Prepare all your stakeholders and decision-makers in advance for these likely objections and secure prior clear agreement on roll-out speed, suppliers and costs to prevent your transformation dying the death of a thousand cuts.

Stage 4: Low morale

Not feeling ready for the coming change can manifest as low team morale. Employees, senior leaders and board members alike, especially those with long company tenure, may feel like the change means their experience is no longer relevant or valued by the business. Low morale can be as damaging to the culture as anger. It results in low productivity and high staff turnover. It's important to be sympathetic and to put in extra effort to include people who feel negatively impacted and show them their unique place in the new plan. Celebrating early successes and championing change-makers can help.

Stage 5: Subscribing to the change

At this stage, your people should be getting used to the idea that change is inevitable, even potentially positive, and they should have stopped actively fighting it. There is acceptance of the new transformation and even some positive support, however unevenly distributed. This is a critical point in any transformation. Now identify your supporters and make them your evangelists. By encouraging them to take ownership and share accountability for the project's success, you can win over the last of the hesitant and even resistant people in your team.

Benjamin Franklin said, ‘by failing to prepare, you are preparing to fail,’ and nowhere is this truer than in change management. When we introduce change into someone else’s working life, we need to be prepared for their reaction and attuned to where they are on the journey to acceptance and support. Until we take time to understand normal human emotions in response to change, our people won’t unlock the power of their adaptability and our transformation efforts will fail.

The Five Stages of Digital Transformation - and how to help your people adapt to change (2024)

FAQs

The Five Stages of Digital Transformation - and how to help your people adapt to change? ›

Taken together, we can see how digital forces are reshaping five key domains of strategy: customers, competition, data, innovation, and value (see figure 1.1). These five domains describe the landscape of digital trans-formation for business today.

What are the five stages of personal digital transformation? ›

Here are five key steps from Tony Saldanha's "Why Digital Transformations Fail," guiding businesses from traditional models to fully digitized enterprises.
  • Step 1: Foundation. ...
  • Step 2: Siloed. ...
  • Step 3: Partially Synchronized. ...
  • Step 4: Fully Synchronized. ...
  • Step 5: Living DNA.
Apr 19, 2024

What are the 5 strategic domains of digital transformation? ›

Taken together, we can see how digital forces are reshaping five key domains of strategy: customers, competition, data, innovation, and value (see figure 1.1). These five domains describe the landscape of digital trans-formation for business today.

What are the five forces of digital transformation? ›

Digitalization and its consequences are evaluated through the lens of Porter's five forces: the threat of new entrants, the threat of substitute products or services, the bargaining power of buyers, the bargaining power of suppliers, and rivalry among existing competitors. Content may be subject to copyright.

What are the steps to digital transformation? ›

Let's take a closer look at five steps you can take to achieve success with digital transformation.
  1. Define your vision. Before you jump into digital transformation, think about the experience you want to provide. ...
  2. Get leaders involved. ...
  3. Focus on culture. ...
  4. Gather resources and expertise. ...
  5. Choose the right technology.

How do you structure a digital transformation? ›

Each step includes a core strategy supported by the three most critical key actions to take to drive the strategy successfully:
  1. Define Objectives. ...
  2. Create Core Team. ...
  3. Analyze and Engage Stakeholders. ...
  4. Develop Digital Roadmap. ...
  5. Create Implementation Plan. ...
  6. Execute and Monitor. ...
  7. Track and Optimize.
Feb 9, 2024

What are the five building blocks of a digital transformation? ›

The 5 Building Blocks of Digital Transformation, a set of crucial elements by MIT, includes the Operational Backbone, a foundation of integrated systems and processes to ensure efficiency; the Digital Platform, a repository of components for rapid innovation; Shared Customer Insights, organizational knowledge about ...

What are the key elements of digital transformation? ›

Exploring the 6 Core Elements
  • Leadership and Vision. Visionary Leadership: A clear vision from leadership defining the path and objectives of digital transformation initiatives.
  • Customer-Centricity. ...
  • Culture and Change Management. ...
  • Technology Integration. ...
  • Data-Driven Insights. ...
  • Agile Processes.
Dec 6, 2023

What is digital transformation strategy? ›

Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.

What are the first steps to embrace digital transformation? ›

The first step you'll have to take is to recognize the scale of the project. It's better to determine what digital transformation your organization needs and what it will need in terms of cost and time. After that, It's best to break down your business operations, such as client support, logistics, and more.

How would motivate your employees to cope with the change of digital transformation? ›

5 Employee Engagement Tips to Help Your Workforce Keep Up with Digital Transformation
  1. Consistent Communication. ...
  2. Invest in Your Employee Experience. ...
  3. Commit from the Top. ...
  4. Invest in Lifelong Learning. ...
  5. Help Employees Embrace Agility.
Nov 29, 2023

What is the best methodology for digital transformation? ›

The SQCDP method: streamlining processes for digital transformation. Another methodology to consider is the SQCDP method, which helps you streamline or adjust your digital transformation process.

What are the stages of personal transformation? ›

There are Six Stages of Transformation: Realize, Release, Rebound, Reinvent, Resurrect, and Respond. The beauty in breaking down our transformational process is that you can see where you've been, where you are, and where you're heading.

What are the 5 stages of personal informatics model? ›

We derived a stage-based model of personal informatics systems composed of five stages (preparation, collection, integration, reflection, and action) and identified barriers in each of the stages.

What are the 5 stages of transformation Mckinsey? ›

The answer is to follow a structured process that we characterize as the “5As”: aspire, assess, architect, act, and advance. For each of these stages there are clear frameworks for performance and health that enable leaders to manage both with the same rigor and discipline (Exhibit 2).

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