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Ace your digital transformation

Paul Neagu

Going all in on digital can spell trouble if you don’t get it right. Here’s how to avoid some of the common pitfalls.

Ford, GE, Nike, Burberry, P&G and Lego all went big on digital, only for their efforts at transformation to fail – in some cases impacting on stock prices and heralding the early exits of presiding CEOs. But where did they go wrong and how can you avoid making the same mistakes?

Writing for Harvard Business Review, Thomas H Davenport and George Westerman say execs “would be wise to be wary about the siren call of new technological innovation”, and tease out the lessons to be learned from the failure of others.


Digital is not necessarily your salvation, but when things aren’t going very well it can seem as though it offers the answer to all your problems. When Sears invested in analytics, it should, perhaps, have spent the money focusing on its facilities and service. Former GE CEO Jeff Immelt’s efforts to transform the company into a digital industrial giant eventually got him fired – the new CEO, John Flannery, is focused on cutting costs.

There are there are myriad factors that can affect your company’s performance including the state of the economy, the quality and level of demand for your products, and many more. If you treat digital transformation as a cure-all it will surely fail. Get your fundamentals right first.


You can’t just buy digital. Transformation is a messy process involving investment in “skills, projects, infrastructure, IT systems”, not to mention the upheaval and friction of melding people and business practices with machines, and instituting processes for learning and feedback.

Ford, P&G, Lego and Burberry spent a fortune on digital, but “the big digital bets did not pay off quickly enough, or richly enough to counter the drain they represented on the rest of the business”.

Digital transformation provokes major upheaval affecting all areas of your business, and you won’t necessarily see the benefits of your investment for some time.


When P&G invested in digital technologies in 2012 and 2013, it was ahead of the curve in the consumer products sector. But, the writers argue, the firm wouldn’t have lost much ground had it taken a more targeted approach to investment, a lesson the firm learned the hard way:

“[Today] no digital initiative is undertaken at P&G if it doesn’t fit the strategy closely and if it’s not hardwired to value.”

To make digital transformation a success, you have to understand its likely impact on your firm and the market as a whole. You can’t be ahead of the curve if you don’t know what the curve looks like – there’s a learning phase before transformative investment makes sense.

Driven by hubris, the buzz of publicity and the pressure to deliver results in the short to medium term, many top execs fail to understand the pitfalls of digital transformation. But by watching and learning about new market opportunities, getting your own firm’s fundamentals in order and understanding the full implications of going digital, you can get your firm’s transformation right.

Source Article: Why So Many High Profile Digital Transformations Fail
Author(s): Thomas H Davenport and George Westerman