Job Title Confusion: Digital Transformation vs. Change Management

What Is The Difference Between Digital Transformation & Change Management?

Let's first define digital transformation. I like the definition that Salesforce uses: "The process of using digital technologies to create new – or modify existing – business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation."

So, what's change management? You'll receive different replies depending on who you ask. For example, project managers view change management as the process of obtaining approvals for project scope, schedules, or budget changes. IT professionals look at change management as the process for approving, testing, and installing new hardware or software. Prosci, the global leader in change management solutions, views change management from an organizational and people perspective. Their definition of change management is "applying a structured process and set of tools for leading the people side of change to achieve a desired outcome." For purposes of this discussion, we will focus on the organizational perspective.

The Most Magical Place On Earth And Digital Transformation

Now that we've defined digital transformation and change management, let's start with a great example of a company that successfully implemented a digital transformation. But first, let me challenge you to guess who the company is. I'll give you a hint: their motto is "The Most Magical Place on Earth." You guessed it. The company is Disney World.

The Disney MagicBand, introduced in 2013, was part of a robust technology revamp to the guest experience, allowing guests to manage their reservations, make payments, and access their hotel room. Continuing on their transformation journey for guests, Disney announced in March 2021 the MagicMobile service, which operates like the MagicBand but on a mobile device. Disney indeed has reimagined their business in the digital age to meet its customers' changing needs.

As George Westerman, MIT Center for Digital Business, says, "When digital transformation is done right, it's like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar."

Microsoft's Reinvention Through Organizational Change

Now, let's look at Microsoft's change management relative to the organizational structure. When CEO Satya Nadella came onboard in 2014, he announced that its ability to change its culture would be a leading indicator of its future success. This type of message coming down from the CEO is both powerful and essential to successful organizational transformations.

As he shared his new mission, one of the key changes he wanted to champion was to create a more collaborative and imaginative environment. He would do this by first removing the barriers created by a siloed approach. And thanks to Satya's leadership, Microsoft has been successful in its organizational changes, as shown in its stock prices and employee morale. Continue to watch Microsoft as they change and adapt to the markets they serve.

Sarah Clayton, Senior Partner at Korn Ferry, shares, "Few things are more important during a change event than communication from leaders who can paint a clear and confidence-inspiring vision of the future."

Change Management Interlinked With Digital Transformation

As you can see, organizational change management is vital for the successful implementation of digital transformation initiatives. While each term has its unique definition, the very nature of digital transformation necessitates change management protocols. Think about the Disney World example. When they executed their digital transformation to MagicBands and MagicMobile, they prepared their organization for the change, crafted their vision and plan, implemented the changes, and embedded the changes with their processes and, most importantly, their culture. They continue to review progress and analyze results to ensure they are providing guests with the ultimate customer experience.

Digital transformation will continue to be an essential strategy for companies and their C-suite teams, especially if they want to remain competitive in this rapidly changing environment. Take a look around and watch the companies that embrace change management. These companies view change management as an essential tool that ensures a successful digital transformation.

P.S. If you liked this article, check out the previous article in the series that explains the difference between strategies and operations.