Intelligent Change E-Book

Alexander Budzier

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 371

Veröffentlichungsjahr: 2025

Beschreibung

Shepherd your firm through its next digital transformation initiative

Only 1 in 200 digital transformations finish on time, within budget, and realize the planned benefits. To avoid the same fate, you must understand why so many fail, and some succeed. In Intelligent Change: The Science Behind Digital Transformations, a team of renowned project management and digital transformation experts delivers a how-to manual for expansive technology change initiatives at firms of all types and sizes. The authors rely on a systematic review of over 1800 publications, interviews with 160 top-level managers, and fieldwork studying 150 digital transformation projects to bring you research- and data-backed strategies you can implement at your own organization to ensure your own project provides business value.

Learn what strategies work and why. Understand which strategies don't work and what pitfalls to avoid. You'll find step-by-step guidance on how to execute a digital transformation using the keys to successful change initiatives, including:

• Establishing ownership amongst your front-line managers and staff that goes beyond mere support and promotion of the change
• Building trusting relationships between the different levels of your organization
• Creating effective two-way communication between the planners of the technology change and the ground-level staff implementing it

Perfect for managers, executives, entrepreneurs, founders, and other business leaders, Intelligent Change is also a must-read for project managers and IT professionals tasked with shepherding their companies through their next major technological change.

Leseprobe

The Science Behind Digital Transformations

INTELLIGENT CHANGE

ALEXANDER BUDZIERTHOMAS GOTTSCHALCKKIM BJØRN THUESENASTRID LANNG

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To Sarah, Anneliese, and our two cats, the latter of whom have the annoying habit of walking over the keyboard at precisely the wrong moment.

—Alexander

This book is the result of engaging discussions, hard work, and fun times. Thank you, Katrine, Alex, Frederik, Mads, Andreas, and Thomas for great times together. Also, this book is a reminder of how privileged we are to be part of a company that truly values deepening your understanding, widening your perspectives, and getting to work with what lights a fire in your eyes.

—Astrid and Kim

Acknowledgments

Writing a book is a challenging and rewarding endeavor, and we could not have done it without the support and encouragement of many people.

First and foremost, this was a group effort among dear friends. Our combined insight, expertise, and dedication were instrumental in shaping this book and bringing it to fruition. Our unwavering commitment to excellence and our contagious enthusiasm for the topic inspired us every step of the way.

We are particularly grateful to our families. We want to thank them for their love, patience, and understanding. They provided a nurturing environment and a sense of purpose that sustained us throughout this project.

We are indebted to our colleagues and collaborators, who generously shared their knowledge and resources with us. They challenged us to think deeply and critically about our ideas, helped us refine our arguments, and improved our writing. We are incredibly grateful to the hundreds of interviewees who generously gave their time to share insights and tell their stories. Their contributions were invaluable.

We also want to thank Andreas Leed, who assisted with our research. This book would not have been possible without his support and hard work. Frederik Jakob Madsen and Mads Lomholt were also integral to making the research happen through their invaluable efforts throughout the project.

Finally, we want to express our gratitude to you, the readers of this book. We hope that our book will inspire and inform you and enhance your understanding of how to lead digital transformations.

Introduction

Implementing new solutions, systems, and organizational processes is a significant challenge. In December 2005, Queensland awarded IBM a contract worth AUD 95 million (USD 72.2 million) to replace its aging payroll system.

Three years later, the project had yet to make much progress. IBM estimated it would take AUD 181 million (USD 154 million) to complete the project. The project was swiftly descoped to cover only the health sector for AUD 6.2 million (USD 5.3 million).1

In 2010, after 10 aborted go‐lives and two and a half years behind the original deadline, the new system was finally operational at a cost of AUD 25.7 million (USD 23.6 million). However, the system did not work. It produced 35,000 payroll mistakes. At the peak of the errors, 1,010 employees were required to fix the data to make the fortnightly payroll run, at an annual cost of approximately AUD 170 million (USD 156.1 million).

An inquiry into the saga found many failings of governance, technical specifications, frequent scope changes, and a lack of project management capabilities.

Sometimes failure can follow even when the team gets the basics right. For example, the Danish University and Property Agency, known as Bygningsstyrelsen, designed a system that precisely met the specifications, met every deadline, and successfully delivered the requested product but failed to bring about the desired change within the organization.

After Bygningsstyrelsen went live with the new system, employees abandoned agreed‐on work processes and instructions in favor of old, Excel‐based methods during day‐to‐day operations. This failure to make changes caused all benefits of the digital transformation to disappear.

The problem in such situations typically is not technical; there is nothing wrong with the technology or system. The challenge lies with the people, politics, and cultures that must change to bring about the benefits.

Unfortunately, it does not matter how good new systems and processes are if nobody is willing to use them. Any technology endeavor that involves significant changes in people, power, and politics requires work to make those changes happen – not only in high‐level strategies and ambitions but in manifested behavioral change at all levels of the organization.

Without investing effort into effective change management, the transformation risks failure – and most certainly will fail.

However, if change is managed successfully, it can help you secure the project's benefits on the first attempt.2 By ensuring that the project meets the needs of both the organization and the people who will be using and be affected by the new systems, you can minimize the risk of wasting valuable resources on a failure.

The challenge here, however, is that managing organizational change requires a different skill set than managing a technical change. In this case, success requires people skills. Unfortunately, there is no technical solution to people skills; we have checked.

Another unfortunate fact is that there is very little scientific evidence on what digital transformation leaders do to make change management effective. A plethora of case studies and anecdotes exist, many of which suffer from survivor bias. Fortunately, we have been working hard to try to fix that problem.

How?

We know much about what digital transformations should do but little about what successful transformations really do. To build a systematic body of scientific data, we started a collaboration between the University of Oxford's Saïd Business School and Implement Consulting Group, based in Copenhagen.

At the University of Oxford, we were interested in better understanding the dynamics of organizational change and investments in information technology. Our previous research3 shows that ineffective change management significantly contributes to cost overruns, schedule delays, and benefit shortfalls in digital transformations.

At Implement, we focus on ensuring that your efforts develop meaningful change within your organization by supporting you with implementing tools and techniques that have a meaningful impact. We help companies worldwide understand the human perspective and dynamics behind change.

Together, we desire to improve the success of digital transformations. We are basing this book on our combined 50+ years of experience working as consultants for businesses looking to implement change and our in‐depth academic research into how to make sociotechnical change work.

We realized there was a lot of noise, confusion, and competing advice. So, we decided to systematically study existing research, to test, and to gather data on what worked and what did not.

We started by systematically reviewing the existing research and information on organizational and technological change, studying nearly 2,000 publications in the field. Based on this information and our combined knowledge, expertise, and insight, we identified the fundamental beliefs, opinions, and theories we wanted to examine and test in more detail.

We further validated and refined our approach and hypotheses through workshops with change experts. As a result, we identified seven “levers,” or features, of digital transformations that might influence success.

Here are the seven levers of successful digital transformations:

A clear reason to change

is the cornerstone of any successful transformation. It provides a vision, framework, and approach for digital transformations and sets the direction and purpose for the change.

A defined approach to managing change

is the framework and precise plan for the digital transformation down to the last detail.

Early involvement of users

in designing and testing processes and systems is necessary.

Management ownership of the change

is the work of top, middle, and frontline management, not the project, to support, promote, and demonstrate ownership of the digital transformation.

Effective communication

is not just a tool; it's a necessity for securing the commitment of stakeholders to the changes, and it is the transformation's active, deliberate dialogue that ensures everyone is on board with the digital transformation.

Effective training

must equip users with the knowledge and practice of new working methods to ensure that users adopt new systems and processes.

Establishing trust‐based relationships

is not just a goal but a necessity. Digital transformations must create and maintain productive, trust‐based relationships with end users and senior stakeholders.

We then carried out our research by analyzing 155 separate digital transformations. To be considered in our research, each transformation had to:

Implement a technological component.

Introduce organizational change, such as how employees use a system or their processes of work.

Have completed the digital transformation for more than three months so we could evaluate its impact.

To gather our data, we interviewed those involved and analyzed data and statistics regarding how the transformation was managed and its long‐term impact and effectiveness.

We then tested the seven levers to determine which ones are truly important.

We found that all seven levers contribute, directly or indirectly, to the long‐term success of the transformation, though they have varying degrees of impact. These levers can be applied independently or jointly to calibrate your approach and ensure its success.

We discuss each of these levers separately throughout this book – their importance, examples of their applications in action, and common beliefs about them.

Chapters 1 and 2 the nature of change, how we carried out our research, and the value of effectively coordinating the change management aspect of a project implementation. Chapters 3 to 10 analyze the seven levers in more detail using case studies from our research to illustrate our findings.

The Purpose of This Book

In this book, we do not provide the perfect how‐to recipe for digital transformation success. As you will soon discover, while our data show particular elements to be more effective than others, making a one‐size‐fits‐all approach is a fool's errand.

Digital transformations align people's needs and wants with the organization's culture, needs, and wants. Because you will never find two situations in which these things neatly agree – and, most often, they are unknown at the outset – no easy recipe exists to resolve the people, power, and politics of change.

Instead, we analyzed the data we gathered and used case studies from our research, public information, and previous clients to explain how these levers impact and influence the success or failure of digital transformations.

This is not a should‐do book but a what‐works‐and‐why book. By reading it, you will learn the logic behind what digital transformations do, what works, and why. We hope you will discover new answers and inspirations that fit your needs.

Change Jargon Demystified

Digital

– We use the term “digital” to mean information technology (IT) and information systems (IS), the backbone of products, business processes, sales channels, and supply chains.

4

Digital transformation

– We use the concept of transformation to emphasize the element of organizational change required to integrate and exploit investments in new digital technologies through changing organizational capabilities, business models, operational processes, and user experience.

5

Project

– The temporary organization built to design, implement, and successfully deliver technological and organizational change. This organization has its team, resources, processes, systems, deadlines, and goals, and a strategy to deliver the changes. Once the organization has implemented the digital transformation, it typically dissolves, which makes it temporary. We know some companies are moving from projects toward a product‐based approach to developing technology. We also see that transformations require dedicated projects once the changes impact multiple products, processes, and diverse groups of stakeholders and users.

Permanent organization –

The organization or company that owns the digital transformation.

End users

– The employees who work directly with the systems and processes about to change.

Stakeholders

– Our shorthand for senior stakeholders: senior managers and executives of the organization who have an interest or are instrumental in the change.

Communication specialist

– A professional working in communications who might be part of the transformation team or work for the permanent organization in a permanent organization, for example, in the communications department.

Change specialist

– An expert in organizational change and transformation management; in our case studies, variously an internal expert or often a consultant.

Steering committee

– A decision‐making forum for the transformation's duration, typically bringing together the key senior stakeholders to provide governance in terms of setting targets, aligning transformation and business objectives, scrutinizing the transformation, and holding the transformation team accountable.

Manager (frontline/middle/top)

– A simplified view of the different hierarchical layers of management: Top management consists of the most senior executives involved in the transformation, frontline managers are the first layer of hierarchy above the end users, and middle management are the ones in between. We analyze this hierarchy in more detail in

Chapter 7

.

Technical change

– The activities focused primarily on changes to software, systems, products, services, and other assets; in some cases, technical change is even involved in the construction of new offices and the like.

Organizational change

– The activities to manage changes in employees' and customers' behavior, mindsets, attitudes, thinking, ways of working, and the like.

Notes

1

Statistics and conclusions from this project can be found at

http://www.healthpayrollinquiry.qld.gov.au

.

2

Hornstein, H.A. (2015). The integration of project management and organizational change management is now a necessity.

International Journal of Project Management

33 (2): 291–298.

3

Flyvbjerg, B. and Budzier, A. (2011). Why your IT project might be riskier than you think.

Harvard Business Review

89

(9).

Flyvbjerg, B., Budzier, A., Lee, J.S. et al. (2022). The empirical reality of IT project cost overruns: discovering a power‐law distribution. Journal of Management Information Systems 39 (3): 607–639.

4

This definition is adapted from Matt, C., Hess, T., and Benlian, A. (2015). Digital transformation strategies.

Business & Information Systems Engineering

57: 339–343.

5

Adapted from Henriette, E., Feki, M., and Boughzala, I. (2015). The Shape of Digital Transformation: A Systematic Literature Review.

MCIS 2015 Proceedings

. 10. http://aisel.aisnet.org/mcis2015/10. Information Systems in a Changing Economy and Society, 431.

CHAPTER 1What Does It Mean to Manage Digital Transformations?

No organization can avoid change forever – no matter how much it might want to. One of our favorite jokes about Oxford goes, “How many Oxford dons [professors] does it take to change a lightbulb?” The answer is: “Change? Change? CHANGE?!”

Continuing to use the same methods, technology, or approaches eventually means that you get left behind because you have failed to adapt to new realities or opportunities. Equally, however, you cannot embrace something simply because it is that new shiny thing that looks cool but does not offer your organization real value.

The allure of the shiny means that change needs to be rational – actively controlled and coordinated. This paradox of exploring and exploiting innovations, was first discussed by James G. March, a professor at Stanford University. He distinguished the two concepts by the degree of uncertainty of the returns for the organization. The returns of explorations are more uncertain than those of exploitations. But he argued that both are crucial for improving performance and competitive advantages.1 The crucial insight is that every digital transformation must trade off exploration and exploitation. If the focus is solely on exploitation, the transformation misses an opportunity for innovation. If the focus is solely on exploration, the transformation misses the opportunity for relevant learning, changes, and results. All change should be happening with purpose.

Exploring and exploiting is not the only paradox of digital transformations. Organizations must also balance the conflicting and paradoxical demands of stability and change.2 Counterintuitively, stable organizations are more effective at adopting change.3

In 2000, Jack Moran, a distinguished change practitioner in healthcare and adjunct professor at Arizona State University, and Baird Brightman, a clinical psychologist and writer about the human side of work, defined managing change as “the process of continually renewing an organization's direction, structure, and capabilities to serve the ever‐changing needs of external and internal customers.”4

Most people agree that change happens all the time. In the 1980s, leading thinkers on change and organizations identified another paradox between planned and unplanned changes.5 Planned changes are responses to anticipated events. However, not all events can be anticipated, due to the turbulent environment in which organizations operate. Unplanned changes are responses to an unanticipated event that occur after the event happens.

These unplanned changes frequently lead to significant breakdowns, scandals, and organizational failure unless organizations retain an element of flexibility and fluidity to respond to unanticipated events through unplanned change.6

Rare events and crises also trigger organizational change. The argument goes that organizations in crisis failed to change before the crisis and are now scrambling for a response. Had they changed earlier, the crisis would not have happened. The underlying assumption in this argument is that all changes can be planned for. Our research finds that this is not true.7 Thus, the ability to manage change is a crucial capability for every organization.8

But What Is This Managing Change?

According to Jerry Porras and Robert C. Silver from Stanford University, managing change involves:

Using a set of theories, values, strategies, and techniques

Aimed at the planned change of organizational vision and work settings

To generate cognitive changes in members of the organization, manifesting in behavioral change and thus

Promoting paradigmatic change that helps the organization better fit or create desirable future environments.

9

In other words, managing change has become an area of special expertise that links strategic change to the daily tick‐tock of operations. Change management is vital to ensure that organizations do not become victims of change but are change agents.

A more contemporary view makes a distinction between episodic and continuous change.10 Looking at organizations from a macro perspective shows relatively stable ways of organizing work that is interrupted episodically to reconfigure the ways of working. At the same time, small changes happen constantly when the organization is viewed at the micro level. Indeed, the ability to manage small changes consistently is one of the critical characteristics of organizations that work reliably in uncertain environments.11

We are all familiar with the experience of small changes and innovations scaling to reach a tipping point. Consider, for example, the transformation that has, at some point, been nicknamed BYOD – Bring Your Own Device.

The turning point in the history of mobile phones was the release of the first iPhone in 2007. At that time, the BlackBerry dominated the market. The iPhone did not threaten the BlackBerry yet; the iPhone had a minimal battery life and a cumbersome keyboard, and, most of all, it wasn't secure. The core feature of the BlackBerry was security; it could securely operate email using servers that pushed new emails out to devices.

The idea of the BlackBerry was inspired by large companies that used systems like IBM's Lotus Notes, where email systems ran on mainframe‐style solutions. This architecture was highly secure because it was tightly controlled. Back then, the IT department controlled access to servers, and users could get a BlackBerry only from the company's IT department.

The iPhone, however, improved and innovated on the BlackBerry; with a better camera and better internet browsing, it quickly became more attractive, and other devices followed suit. Suddenly, the consumer market offered innovation at a rate faster than the ability of IT departments to refresh their equipment.12 In many organizations, the defined processes to manage technology change were not fast enough to meet end users' requirements for speed.

In some companies, Bring Your Own Device started because employees figured out how to forward emails to personal accounts or how to configure access to a mailbox from their phones.

What started as a small change by some tech‐savvy individuals quickly grew – suddenly requiring a BYOD policy to keep emails secure. Macro changes were being triggered because of continuous micro changes. Many organizations needed to start a project to handle this digital transformation toward BYOD.

Our key observation is that change management is not a question of either/or; change is exploration and exploitation, unplanned and planned, episodic and continuous. Looking across different sectors, we find that the organizational challenge to change has increased in breadth and depth.

Organizations increasingly must collaborate internally to respond to current challenges, which require more depth, and with other organizations, which require more breadth. Again, few organizations find it easy to collaborate across internal silos, levels of hierarchy, and external boundaries with collaboration partners through existing processes and structures. The typical response is to start a project to deliver the transformation.

Not everyone benefits from change. Every change has its heroes, villains, and victims.13 The core challenge for managing change is maximizing the positive impacts of changes on individuals and organizations while minimizing the negative impacts.

Therefore, change management is the set of management activities to plan, organize, staff, lead, control, and implement change so that it is effective, beneficial, and lasting. Often change management is seen as a specific task or project – such as building a house – with defined frameworks, practices, and processes. You can order change to happen, and it will do so successfully.

Unfortunately, change is not so simple in reality.

When an organization's leaders are planning and structuring digital transformations, they might believe they can task a change specialist to come in and restructure or transform how the organization operates and then leave. Once the specialist is gone, the change endures. We, however, know that this approach has not worked; it is said that 80% of digital transformation initiatives fail.14

Our research, which covers more than 6,000 IT projects, shows that if we evaluate projects by looking at how they delivered against the promises made in the investment decision:

59% of IT projects deliver on budget or better,

9% of IT projects deliver on budget and on time or better, and only

0.7% of IT projects deliver on budget, time, and benefits or better.

It is essential to recognize that the literal interpretation of the common term “change management” may not reflect the best approach. Managing change is not an administrative, stable, managerial activity. Experts in this field have started using more active words to replace “change management,” such as “managing change,” “changing work,” or “transforming organizations.”

Similarly, experts have stopped using the phrase “stakeholder management” because leaders engage with stakeholders rather than directly administer them. For this reason, we believe the industry needs to start viewing change management as a tool for leading transformations through others rather than simply administering changes.

We fundamentally believe that change cannot be directly managed and controlled. Data from our research, which we share in Chapters 3 to 10 of the book, have shifted our thinking.

Therefore, change management needs to address the central question and problem: How do we transform through technology successfully? Change also challenges core ideas about the organization – what it does, its purpose, and the identities of the people working for it. There are two sides to this:

Technology change involves identifying what the change should be – implementing a new technical or digital solution or changing products, processes, or how people operate – and rolling it out throughout the organization.

Organizational change involves working with the people affected by the technology change. For any change to succeed, it needs to be accepted and adopted by the people it affects. The journey toward transformation must ensure that the people involved in the change are not left behind. We need to support the people on this journey as best as possible.

However, to understand the importance of people in the context of significant technology change, we need to examine the origins of managing technology and organizational change and how people traditionally have perceived both.

History and Context of Managing Technological and Organizational Change

Awareness of the need to manage organizational changes in technology implementations started long ago. In our literature research, the oldest text we found on this topic was published in 1939 by Elliott Dunlap Smith, then professor of economics at Yale University.15 Smith observed that successful transformations happened only when management (called “the capital” in the language of the 1930s) opened a dialogue and listened to their workers (“the labor”) about the change.

Smith studied multiple cases in textile mills across the East Coast of the United States. All 18 mills he studied were hit hard by the Great Depression in the 1930s and needed to cut costs by 30% or more. The mills’ mottos were uniformly: “Do more with less.” Some mills succeeded and turned around, but the change failed spectacularly in many others.

In these cases, the solution was called the multiple‐loom system – comprising repairing and replacing looms and frames – and a different, Taylorian, style of working, in which tasks shifted from skilled, high‐paid weavers to unskilled labor, and weavers now operated many more looms.

The new multiple‐loom system, combined technology improvements and new organizational practices to transform how the mills operated. However, in some mills workers were not involved in designing or implementing the change; these workers were expected to accept it quietly for the benefit of management. They did not. They sabotaged looms, spoiled goods, and organized walk‐out strikes in protest; as a result, those mills went bankrupt.

Smith's research showed us that labor and technology must be managed together – you cannot simply drop a technology on a large organization and hope it works. Without ensuring that the people affected by a change understand and accept the new technology, you cannot expect them to use it happily and effectively.

For leaders of technology transformations, Smith had these words of advice:

Like marriage, the effort to [transform] … even if this [change] is good, is something to be entered into “soberly, reverently, and in fear of God,” and, I may add, with sufficient financial resources to see through much more expenditure than is superficially apparent.16

The turning point at which change management got put on the map, however, was in 1995, thanks to the work of John Kotter, professor at Harvard and the best‐known author on change. Kotter created a top‐down, eight‐step model informed by many failed initiatives for change. He suggested the eight factors that typically lead to failure and the eight steps to take to avoid them.17

Establishing a sense of urgency

Forming a powerful guiding coalition

Creating a vision

Communicating the vision

Empowering others to act on the vision

Planning for and creating short‐term wins

Consolidating improvements and producing still more change

Institutionalizing new approaches

The eight steps outline a neat process that starts at the organization's top, creating a sense of urgency – often around declaring a crisis or a burning platform. Senior leaders with authority set up a steering committee: the guiding coalition. A vision then needs to be created and communicated.

Leaders empower others to make small changes by declaring a big change. They often use consultants to bypass resistant managers. These changes are celebrated and institutionalized through new policies and standard operating procedures.

While, arguably, knowing the causes for failure does not necessarily mean that avoiding these causes guarantees success, Kotter's work brought change management into the public eye. Since 1995, when Kotter's article first appeared, our understanding of change has moved on dramatically.

Kotter’s insights suggested a process we frequently see being applied in practice. First, you define your vision and objectives and then mobilize employees to create the change. However, Kotter's model does not explicitly advise defining the solution at the top and rolling it out top down. But all too often, when organizational change is combined with technology change, both the delivery of new technology and the organizational change follow a top‐down waterfall approach, an approach that often is inflexible.

Today, other approaches to organizing change, such as lean and agile, offer different perspectives. Their focus is on flexibility of the solution, speed, and innovation.

Since Kotter's article was published, business leaders’ awareness of the value of change management has grown.

Researching successful change has increased; previously, change was not considered a field of study. Now researchers devote time and resources to understand change better. Citation databases, such as Scopus and Web of Science, which track the creation and citation of written materials on specific subjects, are practical tools for measuring this development. Figure 1.1 shows the explosion in publications on change management since 1995.

FIGURE 1.1 Annual volume of academic publications on change management.

A second tipping point happened in the technology community. In February 2001, 17 software developers penned the Agile Manifesto.18 The idea of greater agility – more responsive, flexible, iterative approaches to implementing technologies – was not new, but the manifesto started a revolution.

Today, agile projects are firmly established as practical approaches to implementing digital transformations. Throughout the book, we discuss the value and impact of the agile approach.

Challenges in Managing Change

In our experience, leaders recognize and accept the need to manage change and know the pitfalls. Our results show that two‐thirds of leaders have a structured or defined approach to change. (See Chapter 5 and Appendix B for details.) However, often there are considerable differences in the perceptions of what change approaches entail.

Frequently leaders fail to account for imperfect strategies and imperfect strategy implementation – the inability to adjust for your people and their needs. Some people still vividly believe that change can be controlled – that taking actions A and B always leads to result C. Therefore, once they have planned how to change people and delivered on each step, they expect the result to match their planned and predicted outcome.

While leaders recognize the value of managing change, there is a significant disconnect between realizing the need for it and successfully implementing change. This disconnect occurs because leaders know that managing organizational change is necessary and involves people, but they are unaware of what organizational change requires. They do not understand the practical steps that make the change happen and then make it stick for the long term.

In many digital transformations, leaders view change management as secondary to creating and implementing the technology itself – an extra task to be handled in addition to the primary activities. When they buy a new piece of technology to be used in their organization, they do not place a similar focus on those who will be affected by the change this new technology brings.

These leaders might be aware that change management needs to be accounted for, but they consider it an afterthought. After all, everyone loves a shiny new tool. As they do not understand exactly what change management involves, they outsource – bringing in a consultant to lead a three‐person change management team bolted onto the IT implementation without being properly integrated into the transformation.

On top of this, these leaders approach the role from a technical point of view and come up with lots of theories and anecdotal evidence that they are keen to put into practice.

This technical, rational, Newtonian approach to change management does not work to solve people‐based issues with change, which, as we explain in this book, is one of the most critical factors to success. Organizational and people‐based change both need to be integral parts of your thinking toward digital technologies. Without prioritizing both the organizational and the technological change equally, your organization's transformation is unlikely to be successful.

Case Study: Failure to Communicate

[Tom] A global logistics company started working on a huge transformation by implementing an enterprise resource planning (ERP) solution a year ago. To support the project, the company brought in a change team and have, to date, spent €5 million on the change management effort, which shows the scale and importance of this particular solution.

Due to a communications failure, however, the company is currently in huge trouble.

Leaders are implementing this new solution at a critical strategic location for the global logistics supply chain. However, only recently did the project manager learn that, despite a year having passed, there has yet to be any communication with the business unit running the strategic location in the supply chain. They had not heard anything about the transformation, nor had there been any dialogue about it.

While leaders had started well by hiring a change team, they had not prioritized paying attention to what was happening. They had assumed that having a change team would automatically make change happen.

This situation is a common one in digital transformations – awareness that organizational change is necessary on an intellectual level but failing to translate that awareness into successful implementation.

Flexible Support and Approach