The $900 billion reason GE, Ford and P&G failed at digital transformation

  • Two-thirds of businesses recognize their company must digitize by 2020 in order to stay competitive.
  • GE, Ford and other major players poured $1.3 trillion into transformation initiatives, 70% of which — or $900 billion —was wasted on failed programs.
  • The biggest reason: failure to effectively communicate their goals, strategy, purpose and outlook with their employees.
Close-up of sign for GE Digital, a division of General Electric, in the Bishop Ranch office park in San Ramon, California.
Smith Collection/Gado | Archive Photos | Getty Images
Close-up of sign for GE Digital, a division of General Electric, in the Bishop Ranch office park in San Ramon, California.

Digital transformation is more than a buzzword for modern businesses—it's a necessity for remaining viable as the future of work becomes increasingly mobile, agile and global. In fact, two-thirds of businesses recognize their company must digitize by 2020, in order to stay competitive.

Despite its critical importance, a surprising number of transformation efforts are failing, even at some of the world's most profitable, innovative organizations. Last year alone, companies poured $1.3 trillion into transformation initiatives — 70% of which was wasted on failed programs at companies like GE, Ford and Procter & Gamble. Among those that didn't fail outright, only 16% saw improvements in their performance and ability to sustain change over the long haul. Even for digital-first industries like high-tech, media and telecom, only 26% saw success.

Much has been written dissecting the reasons for digital transformation failure — most experts have settled on people/employees, organizational culture and leadership as weak links. But few acknowledge the real common thread: communication breakdown.

The truth is, people aren't the problem; it's the organization's failure to communicate effectively with its people that sets them up for digital transformation trouble from the start.

"People aren't the problem; it's the organization's failure to communicate effectively with its people that sets them up for digital transformation trouble from the start."

As many companies have discovered, creating processes, implementing tools and identifying workflows is straight forward. Changing people is hard. And, organizations that are unable to get the right message to the right people at the right time will find it downright impossible. These 6 tips can help your organization overcome communication breakdown to dramatically increase your chances for digital transformation success.

1. Focus on the why

Communicate the inspiration behind the change to ensure everyone is on the same page about why it's necessary and the ultimate goal. Explain how the transformation will benefit the business, why it's critical for future viability, and how it impacts employees. Help them to understand how their contribution is vital to success and why the transformation is important, not just for the organization, but for them on an individual level. When you create a common purpose among the entire team, employees are much more inclined to get onboard.

2. Create personalized communication journeys

Any change is a journey, and personalizing communication for where employees are in that journey is critical. In marketing, this means meeting the customer where they are in the buying process. In digital transformation, your employees are the customer you need to convince to buy into the change. One-size-fits-all doesn't work, and communication is not an event; it's a process.

Personalize the message to address each employee's point of view, to inspire, inform and reinforce it appropriately throughout the journey. What are their concerns and questions? What challenges are they facing? They're likely already very busy and constantly bombarded with information in their personal and professional lives. You must meet them where they are right now with a tailored message that resonates and cuts through the clutter.

3. Create targeted multimedia experiences that reach different groups

Despite our emphasis on digital communication, 75% of companies still struggle with getting the right information to the right person in context. Not only is there so much competition for their attention but everyone absorbs and retains information differently — some are more visual, others learn by listening, and many require a hands-on style. Creating targeted experiences that reach different groups through varying formats and channels, with distinctive tones and styles based on their demographics, can help you make a much stronger, longer-lasting impact.

4. Communicate in context

Thanks to digital communication, we have so many ways to reach people—video, interactive experiences, social channels, etc. However, asking employees who are already overwhelmed with an overflowing inbox and Slack board is a recipe for failure. To get individuals to pay attention, you must reach them within the context of the work and tools they're already using. It must be embedded within their day-to-day work experience. Otherwise, they'll just ignore it because their time or attention spans simply can't afford any more bandwidth. By communicating within the context of work, the information is more relevant, timely and more likely to make an impression.

5. Use data to measure and iterate

How will you know what success looks like if you don't measure it? People often think of communication as the delivery of a message. But communication is really about making sure the message gets through. The only way to do that is to measure audience engagement and response and adjust accordingly.

Measure sentiment for your digital transformation program quantitatively—what messages get opened, what content gets viewed, how do audience actions differ by subgroups—and qualitatively based on their perception of the information provided.

In addition to tracking engagement metrics, conduct simple, quick polls to ask for feedback in real-time. This will allow you to make adjustments on the fly before the message gets completely lost.

6. Become a change-ready organization

This goes beyond being able to deploy a new tool or process — it means building a culture and communication structure that is ready, willing and able to adapt to any change. After all, the rate of change and evolution in business and technology is only going to continue and even pick up speed.

Effective communication is foundational to any successful change, and implementing the right approach and structure positions your organization to be more agile, proactive and ready to come out on top of whatever challenge or opportunity comes your way.

—By Keith Kitani, CEO of GuideSpark, an employee communication platform that drives organizational change through communication

Note: This story has been updated. An earlier version included GE's earnings report, which was not tied to this commentary.