Digital Transformation originally referred to the transition of an organisation towards delivering its products and services via digital or technological means, from a traditional physical or analogue delivery system. For example, Netflix transitioning from posting DVDs to your house, to providing a streaming service. This article will show how digital transformation addresses typical organisational dysfunctions, and why building psychological safety is key to a successful transformation.
Now Digital Transformation, because digital delivery is now largely the norm, refers to the organisational transformation from traditional approaches to work, such as Waterfall project management, top-down hierarchies, command and control management and functional silos, towards more lightweight, value-stream-aligned, long term approaches to delivery and organisational dynamics.
Digital transformation therefore attempts to resolve some of the many typical dysfunctions that we see in organisations, which include the below. This is a non-exhaustive list, and it’s worth noting that these dysfunctions are not discrete; they overlap and interact with each other, and one dysfunction may lead to, or mitigate another. These are simplified examples of frequently observed classifications of dysfunctions that digital transformation intends to resolve.
Digital transformation may address all these dysfunctions, and more still.
Amy Edmondson has defined psychological safety as “The belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes”, and evidence including many research papers on the subject, Google’s Project Aristotle, and numerous State of DevOps Reports have shown that psychological safety is the primary foundation for high performing teams. High performance in a team is simply not possible without psychological safety, and a team without psychological safety will never reach their full potential.
Psychological safety is the outcome of practices, behaviours, interactions, and consistency over time. Long-lived teams possess more psychological safety than short lived teams, and it is highly context dependent. Different teams, business units, hierarchies, locations and more all have an effect on psychological safety. Building psychological safety requires highly capable leadership and management skills and effective management and clarity of organisational priorities and strategy. People need the right processes to be in place, effective tools and equipment, low cognitive load, an ability to see and think long term rather than short term, and speak up when they become aware of opportunities and threats whether they come from inside or outside the organisation.
Processes and cultures that facilitate learning from success and failure are core to building psychological safety, and the explicit permission to make (and admit) mistakes is fundamental, as is the framing of work not as a productivity measure, but as a mechanism for learning how to improve and do it better each time. An experimental mindset, at all levels of the organisation, bestows the ability to deliver incremental value quickly, and use the learning outcomes to build continuously better products and services. This is described in Dr Edmondson’s work “Is Yours a Learning Organisation?”
Further research by Cataldo et al in 2009 showed that “autonomy and structure must be balanced during a change process to enable flexibility whilst maintaining employee cohesion” (and maintain psychological safety). Bresman and Zelmer-Bruhn also showed in 2021 that team structure, autonomy and dynamics encouraged internal and external learning by promoting psychological safety.
Psychological safety therefore fundamentally improves, and indeed is required, in order to mitigate the above dysfunctions and transform away from them. Teams will only deliver high quality products and services consistently if they feel psychologically safe to think further ahead (and avoid technical or operational debt), learn from mistakes and experiments, ask for help when required and highlight opportunities and concerns.
70% of transformation efforts fail. The single most important aspect to focus on in your digital transformation is not detailed planning, financing, or strategy, it is to begin creating and modelling the practices and behaviours throughout the organisation that build and maintain psychological safety for everyone, so that everyone becomes part of the transformation. Deming showed us that Transformation is Everybody’s Job, and it’s about time we learned it.
Organisations are the interrelations of people. Psychological safety is created via the interrelation of people, and digital transformation absolutely depends on a foundation of psychological safety across the organisation.