Understanding cultural resistance in digital transformation

The intersection of digital transformation and operational excellence (OPEX) offers huge opportunity. However, the single greatest barrier to it is not technical but very human: resistance to change at the cultural level.

I recently visited a factory where a $1.5 million digital transformation initiative was quietly failing. The technology was cutting-edge – internet of things (IoT) sensors gathering real-time data, artificial intelligence (AI) powered analytics providing insights, nice dashboards displaying key performance indicators (KPIs).

The operators were still writing measurements onto paper forms, then typing them in later. Supervisors were printing out reports and making decisions based on gut feel, rather than using the predictive models available to them.

This is a typical situation in my consulting experience. Even with millions invested in digital initiatives, organizations still exhibit atrocious failure rates. McKinsey evidence suggests that nearly 70 percent of digital transformations fail to reach their objectives – albeit not as a consequence of technology meltdown, but simply because people weren’t ready to implement it. 

The fear factor: Beyond job security

It is important to understand the unique facets of resistance within digital transformation programs. While job displacement issues remain, digital transformation generates new anxieties.

• Competency anxiety: Employees worry that their skills will become obsolete or that they won’t be able to keep pace with emerging technologies.
• Loss of status: Digital technologies have the potential to flatten hierarchies and redistribute power, threatening those who derive status from current structures.
• Information overload: The constant flow of new tools, platforms and protocols can overwhelm even the most adaptable workers.
• Autonomy fears: Employees may fear that AI-driven decision-making will reduce their autonomy and judgment in the workplace.

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Middle management resistance

Middle managers are usually the most resistant of all when it comes to implementing digital transformations within pharmaceutical and electronics manufacturing environments. This is not surprising, as they are squeezed from both sides:

• Executives push them to implement new technologies rapidly.
• Frontline staff look up to them for leadership and stability.
• They must continue to generate outputs as systems and processes evolve.
• Their own roles may be most likely to be redesigned in a digitally reformed organization.

The “this won’t work here” syndrome

Maybe the most pervasive resistance is that while digital transformation is working somewhere, an organization’s constraints – legacy infrastructure, compliance requirements, customer needs or market pressures – are rendering it incompatible in their case. This is a more insidious form of passive resistance rather than overt denial, therefore incredibly difficult to address.

The bitter truth is that technical proficiency with weak adoption is ultimately just expensive waste. By overcoming the unique challenges of digital transformation through innovative change management approaches that respect human needs while developing new skills, operations leaders can significantly improve the likelihood of successful implementation and enduring results.

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