Less than 30% of all transformations succeed and the number for digital transformations is even lower, according to a McKinsey survey.
But, what’s the reason for such a low digital transformation success rate?
“Well, you can have the greatest of ideas or the best technology to succeed in your digital transformation initiatives but unfortunately, if your people refuse to support these transformation initiatives, they will ultimately lead to failure,” Beth said.
This is why the formula for digital transformation success is:
People * Technology = Success
People usually resist anything new that can change their normal day functioning in any way. This is because:
“As you work on your digital transformation initiatives, push yourself to make sure that what you’re rolling out is better than what people have right now. This will make them adapt and accept the new technology and move willingly to what you’re offering. Once they realize that change is better, resistance will melt away,” said Beth.
This was the strategy adopted by Tesla when they introduced a huge manifestation of digital transformation – electric cars.
The first electric car was introduced with a top speed of 38 MPH and a range of 40 miles and wasn’t very good to look at. Tesla faced a challenge to get people to adopt electric cars when they loved their internal combustion engine and believed that electric vehicles were slow and ugly.
To overcome this challenge, they had to show people that the new technology was better than what they already had. Hence, Tesla rolled out its first electric car which was beautiful to look at and went 0 to 60 miles per hour in 3.7 seconds. It had a range of 245 miles. Although the car was expensive, it did change the mental image people had about the looks and speed of an electric car.
This made people interested in buying electric cars. So Tesla kept building on the same strategy and rolled out their next car – Model S, with a wicked acceleration of 0 to 60 in 4.4 seconds and a range of 265 miles. In addition to this, this model was safer, faster, and smoother. The goal was to show people that it’s better. For people who wanted a safe car, they showed them it was the safest car on the market with a 5-star crash rating in every category. Also, it was the most technologically advanced car that got better over time with technology updates. And once a small bunch of people recognized that an electric car was better, it grew on other people too and the adopters swelled.
Hence, what Tesla concluded with their strategy was that the resistance to change fell because what they were offering was better in many ways.
When people raise concerns or objections, the best approach is to eliminate the concern entirely, so it is no longer a relevant objection.
When Tesla rolled out the Model S, people raised questions about charging problems on longer trips. So Tesla decided to address this objection and rolled out the “superchargers”, which could charge the car half in 20 minutes. These superchargers were deliberately positioned near amenities and along popular routes. And then to over address the objections and concerns, Tesla rolled out these superchargers really fast and made them absolutely free. This investment made all those concerns and objections melt away.
Tesla used these strategies for expanding their digital transformation to buyers but these can also be applied to internal digital transformations. Here are some examples Beth shared on how Tesla applied these strategies internally.
Back in 2011, in the starting days of the Tesla factory, people were working 24 hours a day, which is why Tesla needed to have food options in their factory. Employees demanded a cafeteria in the factory. But the Tesla team knew that a cafeteria wasn’t going to work because they needed a solution that could operate 24*7. Hence, they ended up rolling out a self-serve automated lounge for the employees that was open at all times. The idea here was to give people something better than what they asked for.
Another example is back from 2014 when employees at Tesla demanded for setting up computers in the break rooms. So that they can look things up on the internet like questions about company policies or their benefits. And again Tesla decided to give them something more than they asked for and created an employee application. So the idea here was to put the answers to their questions in the palm of their hand. Also through this app, employees could get notifications for things like safety, video messages from executives, real-time information about the shuttles, etc. This was all better than what they would find on the internet.
Initiatives like this that impact employees are opportunities to do things better than before. And once you show your employees that a change is better for them, resistance fades away.
Align everything related to employees with embracing digital transformations. That is if you put embracing transformation at the center and say we’re looking for people to embrace the transformation, everything else that’s happening has to support that change.
“If your organization doesn’t have everything pointing towards embracing digital transformations, you’re less likely to have people go there. So put in place structures that are going to support your digital transformation. Everything people hear and see around them has to support the types of transformations that you want. They’ve to see that this is essentially non-negotiable.”, Beth added.
So these were the three main digital adoption learnings from Tesla. These strategies will help you get people to want the change you are implementing. And now you’re going to have people at 100, technology at 100 and 100 times 100 will give you the success you are looking for!
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