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Analyze current relationships between managers and employees to plan essential transformational changes.

Successful digital transformation depends on the people involved. Its not a new business concept, as managers have long understood that the relationship they have with their employees has a significant impact on overall performance. Companies with positively motivated employees have better performance than those that are demotivated. The extent and impact that employee motivation has on performance varies between companies.

In slowly changing companies, negatively motivated employees will have less impact than in those that are changing quickly. In the slowly changing organization, work is largely repeating things that have been done before and management activity is focused on directing and managing work. This is reflected in the scientific management principles established by Henry Ford and still often used today. For example, most jobs are made up of a narrow range of tasks, requiring relatively little skill, while a smaller number of professionals and managers provide direction and control.Employee participation and empowerment are weak because the form of work organization doesnt require it.

Interest in a new form of work organization, lean manufacturing, grew in western countries in the 1990s, after it was recognized that it achieved much higher levels of performance when applied in Japan. This system required higher levels of employee participation and empowerment than scientific management, because of the flexibility, teamwork, and continuous improvement needed to make it work. Failure to achieve its employee aspects is a frequent cause of failure to transition from scientific management to lean. While it was initially focused on manufacturing, elements of lean models have been introduced in most industry sectors today.

We have also seen growth in the use of agile approaches to work organization that enable more nimble response to rapid market and technological change. The agile system also requires higher levels of empowerment, innovation, and continuous improvement.Again, the system drives the role of the employee and how they are managed. Success in the human elements of this system is varied too and reflected in the success achieved with the agile approach.

Employees and digital transformation

Human elements are often cited as reasons for the failure of digital transformation activity. McKinsey reports that 70% of digital transformations fail due to employee resistance. Endava and IDC also report that 56% result in staff frustration and 50% lead to higher attrition, respectively. Only 21% of employees are engaged at work, according to a Gallup survey.

In companies that are digitally transforming (making changes based on and usually including information-based technologies), the role of employees is fundamentally important. Digital transformation often requires significant changes in the activities of employees. Working practices can change, making jobs more stimulating or boring, giving employees more or less control or discretion over their work activity. Jobs can become more or less well paid or secure and skills requirements can increase, decrease, or change altogether. For employees, the prospect of significant changes in their working lives can be a source of fear.

Digital transformation usually requires that employees are motivated towards its success. Their cooperation is necessary for specification, implementation, and sustainment of new technologies and working roles and practices. Levels of enthusiasm for and participation in continuous improvement for successful technology adoption and implementation are critical. Difficulty in achieving them in rapidly changing employment conditions is understandable.

Success in digital transformation, in most cases, requires significant change in the form of work organization used.

Employee relationships and digital transformation

For digital transformation to be successful, employees should be willing and active participants. They should feel confident about their own ability to transition due to the presence of good education and training. Trust between the employee and the organization should be based on the confidence that organizational decisions on digital transformation will be made transparently and with concern for employee welfare and quality of working life.

Involvement in continuous improvement and innovation is important for better implementation and exploitation of the technology. It is also important because it gives employees the ability to influence the changes that are happening around them. Processes should exist that allow this to happen, while also ensuring that improvement is consistent with organizational objectives.

The employee relationships necessary for digital transformation are usually significantly different than those that exist in many organizations today.

The digital transformation employee relationship maturity model

The Digital Transformation Employee Relationship Maturity Model helps organizations understand the current employee relationship and to plan activity to establish the relationships required for digital transformation.

The model has three levels:

The Traditional level is based on relationships commonly found in scientific management operating systems, but which may also linger in lean and agile systems.

The Progressive level represents what organizations pursuing a lean or agile model aspire to but dont always achieve. It is a step towards the relationship necessary for digital transformation success but is not enough.

The Transformative level represents the relationship needed for success in digital transformation.

The model is intended to be used by a group as a means of developing common understanding of and commitment to the plans you develop for change. Analysis of your current state should be undertaken by your management team. You should consider the model, collectively scoring the elements. This will identify the areas you need to develop. The action plan your team develops based on this will depend on your own conditions.

Conduct your own analysis by reviewing each of the elements of each level and allocating a score of 0 if they are non-existent through to 5 if they are fully present. This will require a candid approach from all involved. Add up the scores for each level the highest score will determine thedominant relationship approach. Next, consider the lower scoring items, from all levels, in the development of your own action plan.

The model can be applied to the organization as a whole or in individual parts. Id love to hear about your experience in applying the model.

The Digital Transformation Employee Relationship Maturity Model

Traditional

Progressive

Transformative

Peter Carr is the author and instructor of the University of Waterloo Watspeed Digital Transformation Certificate Program, available globally online, and focused on overcoming the challenges of successful technological change. The program is jointly offered with the Ontario Society of Professional Engineers.

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The Digital Transformation Employee Relationship Maturity Model - ENGINEERING.com