A fifth of UK digital transformation strategies are thwarted by short-termism

Around a fifth of technology officers in the UK c-suite believe tech anxiety has become more pronounced in their firms, while short-termism is preventing them from tackling issues that could help them better adapt to digital change. A new study from Crosstide suggests leaders could need to offer their staff more certainty when undergoing transformations, rather than capitulating to immediate business needs constantly.

Chief information officers and chief technology officers are embroiled in a constant struggle to keep pace with fast-changing innovations. Many have come to realise that progress is dependent on a company culture that welcomes change. But delivering on that front is easier said than done. 

To help companies prepare for the pitfalls that could de-rail change efforts at their firm, experts from Crosstide have polled CIOs and CTOs to find the key barriers to change. They found that legacy infrastructure was heavily holding back transformations – but tackling that in itself was being held back by attitudes from business leaders themselves.

Legacy trouble

The researchers asked CIOs and CTOs what, if anything, is currently making it harder to fulfil their own role as a leader in their organisation’s digital transformation journey. A 26.8% chunk said that legacy IT systems have slowed their progress, while nearly as many 25.6% felt the poor perception of previous transformation projects and their impact on the business was a source of pain. 

This supports other recent research from Publicis Sapient, which suggests tech debt (the cost and effort required to keep IT systems up-to-date and aligned with business needs) is holding many firms back from adopting the latest innovations. Tech debt constitutes the implied cost of additional work in the future, resulting from choosing an expedient solution over a more robust one: and tech debt comes with interest – as while it can accelerate development in the short term, it may increase future costs and complexity.

Illustrating this, roughly a quarter also told the Crosstide researchers that they were held back by the business’s inability to properly prioritise what should be tackled first. The struggle to prioritise was the number one challenge faced by 41% of those working at businesses worth more than $10 billion. Things only get tougher over time, too. The issue was particularly pronounced among 58% of CIOs and CTOs with more than 15 years’ tenure in their current role.

Consistent leadership

So, how can firms overcome those factors, to build a more change-friendly culture? One in five of the CIOs and CTOs the researchers spoke to felt that their organisations’ road to digital transformation had been hit by a focus on short-term results over long-term strategy. In particular, 48% identified fickle leadership priorities – with bosses constantly capitulating to immediate business needs – as something undermining change efforts. A further 40% blamed the pressure to demonstrate return on investment (ROI) for this.

According to Crosstide’s research, companies can help to change this from the top-down, as when the ambition to embrace change is driven consistently from the top, “it creates psychological safety”. With this comes a confidence from staff to do things differently, because they know they have the backing of their bosses. 

Francesca Lavey, chief commercial officer at Crosstide, explained, “All businesses need a North Star, a longer-term vision outlining a shared goal that all stakeholders buy into. This underlines what and why particular investments will need to be made in new skills, technologies etc - and what cannot be sidelined. Transformation isn’t linear, and a pivot at some stage is almost inevitable, but what’s key is people need to know there’s an underlying plan and that they aren’t moving backwards.”