Opinions expressed by Entrepreneur contributors are their own.
Changing or growing as a leader is a bit like trading out a scooter for a motorcycle — it allows you to personally go further, and do so faster, than if you just maintain the norm. The same kind of power-up happens to your business when you allow the entire organization to transform.
We’ve seen that adopting digital technology can improve efficiency, cost savings, and convenience, no matter the size of your business. During COVID-19, old ways of operating just didn’t match the reality in front of employees and customers.
Do businesses get their transformations right 100% of the time? Not even close. Companies wasted roughly 70% ($900 billion) of the $1.3 trillion they spent on transformation initiatives in 2018, mainly due to communication breakdowns. An Everest Group study further found that 73% of companies failed at providing any business value from the transformations they initiated. With digital transformation spending predicted to increase to $3.3 trillion by 2025, the loss is poised to only get worse.
GE is one of the larger companies some people accuse of being especially wasteful within this group. Investors virtually ignored the fact that the company did in fact establish new models, establish new digital infrastructures, and improve service margins. They pressured GE leaders to leave the business. Issues like the multifaceted nature of the transformations, industry readiness in terms of mindset and resources, and overexcitement about new models have wrinkled transformation at places like P&G, Lego, and Nike, too. Avoiding the same sort of fate, however, is within your reach if you watch out for these common mistakes.
Related: 3 Tips to Build Trust and Drive Business Transformation
1. Not making sure your company is ready, willing, and able
Think about a sports team. What’s going to happen if you’ve got fantastic players but they haven’t trained for months? That’s a lack of readiness. What if they all show up and just decide they’d rather eat lasagna? That’s a lack of willingness. What if they’re in great shape and want to play but don’t have the skills of their competitors? That’s a lack of ability.
Businesses are no different. If you haven’t experienced market loss, or if your culture hasn’t been the most open-minded when it comes to change, you’re probably not ready or willing to transform yet. You might want to move forward but understand there’s a whole lot of skills training you’ve got to suit up with first. Evaluate the strengths and weaknesses inside your company and be truthful about where you’re really starting from.
2. Not educating your people on digital transformation
Employees are more likely to get behind a transformation when they understand not only the logistics involved but the “why” behind your move. They need to have a sense of purpose to build enthusiasm and loyalty for the cause. Within that, they need to know how the transformation directly influences their own lives.
Give information and opportunities to your employees and help them connect the dots. If you’re transforming because revenue has declined for the past three years, tell the team that, then show them that transforming could mean higher pay and better options in their career. When you’re transparent and supportive, employees will likely accept changes much faster.
Related: 3 Signs It’s Time to Transform Your Business
3. Leaving your existing customers behind
Companies that go through transformation can become hyperfocused on the new customers the transformation might provide. They get so excited by the potential for fresh sales and expansion that they stop seeing the customers that are already in their fold. They can also be so determined for the transformation to work that they prioritize only the new aspects of the business and leave old areas to atrophy. Make sure you continue to engage with the people you’ve already got. Otherwise, you’ll lose buyers as fast as you gain them.
Related: Transform Your Business by Encouraging Experimentation and Change
4. Losing faith in your employees’ ability to change
If you don’t believe your workers can get through the transformation, why would they think they can? The more you communicate that they can handle the shifts and even thrive through them, the more they’ll see themselves and the team positively. Invest in them — whether it’s through time, providing courses, or other resources — to make it clear that you have confidence in them. Ask the right questions along the way to make sure they understand and that you’ve got an accurate sense of what they need or want to move forward.
The world and its markets don’t sit still. Transformation is key to being successful in the midst of this unpredictability. Many companies don’t do it well, but recognizing their common mistakes can help you clear your own path. If you make sure your team is ready, willing, and able, educate them, keep an eye on the customers you’ve got, and communicate your faith in what people can do, your transformation results can be outstanding.