The fact that the world is speeding up is self-evident. It is also more interconnected resulting in an avalanche of change all around us. In the world of business, digital transformation (DX) is the high-level response to this challenge of fast-moving change. While DX initiatives are massive with over $1.3T invested in this work globally last year, most of these projects fail to deliver on their expected results. Why? Because digital transformation is not about shiny new technology or clever ideas. First and foremost, digital transformation is a mind-set and culture shift. The promise of dramatic leaps in efficiency or customer intimacy can only be realized if teams are rebuilt from the ground up to embrace rapid learning, agile methods, data driven innovation, creative confidence, and radical transparency.
DX is an all-encompassing change in culture, mindset, decision making, planning, operations, customer engagement, and staff skills. A historic shift in business operations and management is happening across all sectors from banking to healthcare, from retail to entertainment, and now increasingly in nonprofits. For nonprofits, digital transformation is critically important to increase program impact, deepen relationships with donors, and lower stress on their staff.
What is Digital Transformation for Nonprofits?
Nonprofits are poorly positioned to take advantage of digital transformation due to scarcity of time. We are all working harder and harder to achieve the mission impact often with little regard for the stress we place ourselves under. Sadly, we are literally killing ourselves with stress-induced hormone imbalances that result from using outdated business processes and methods amidst this storm of change all around us. Something has got to give because the needs of the world are only increasing while resources remain generally flat.
Nonprofits dearly need the positive effects of digital transformation.
The good news is that DX does not need to be massive undertaking in all areas of the nonprofit at the same time. One can start with fundraising, back-office, field programs, or within smaller teams. For a nonprofit, digital transformation requires both a shift in mindset and culture to embrace rapid learning and failure with grace and empathy AND a re-imagining of the money to mission linkage. To achieve this, nonprofits need to adopt deeply data driven decision making based on impact data, lean and agile processes that are not stymied by consensus-heavy collaboration, creative confidence that avoids overly bureaucratic compliance cultures, and radical transparency with both donors and beneficiaries.
Digital transformation for nonprofits seeks to dramatically increase mission impact dramatically (10X or even 100X) while also achieving levels of operational performance that are far more efficient (10% to 40%). While this may appear to be impossible on the surface, DX is at the heart of nearly all major business transformations in the US and around the world. Today, nearly 25% of large international nonprofits are beginning their DX journey through a mixture of internal operational redesign and/or re-imagining their constituent journey for donors and beneficiaries.
DX for nonprofits require executive support across key areas of the organization. While DX is often cited as a strategic goal of the Board or CEO, the hard work often falls to the COO, Chief People Officer, and leaders in fundraising and/or programs. When DX is treated as a task to be led by the CIO, it is likely to yield little results as culture and mindset changes require broader change management support. Tackling the DX change process is a group effort focused on getting small groups of internal leaders positioned for the future. Done right, digitally transformed teams have a more joyful experience at work and, as a result, both mission impact and efficiency are positively affected.