9 reasons why governments fail digital transformation

There are many reasons that hinder innovation and future thinking in our governments

What happens when nothing happens? Governments are extremely complex systems and there are major reasons why most governments fail digital transformation.

We constantly hear about how technology changes the world; how new business models emerge and what we all need to do to keep up with the fast pace of these changes. The same was also true for basic narratives in the economy. Since big tech (Apple, Google, Facebook, etc.) came into play, we challenged a lot of our old assumptions, and we learned that with the age of digital life, social media, and interconnectivity the world played along with other rules.

But do our governments keep up with it? – I would say a definite NO! In the last years, I have seen many governments and government agencies trying to transform. But most of the time I found that there are always the same problems occurring and the same basic underlying narratives that destroy every transformation effort. This is why I now outline 9 of the most commonly found digital transformation killers for governments.

9 reasons why governments fail digital

1. Risk-averse – “We have always done it that way

I know, this is not specific to governments, but it’s a very concerning topic. Due to the systems in place, we see a very slow adoption as risk-taking is not favored by people. The system favors steady outcomes and no challenges to the status quo. Because every move away from “normal” is then a potential to fail and also a big risk for re-elections, own personal careers and maybe also bonuses which were made for different goals.

2. Strong influence of lobbies

It is no surprise, that this is also on the list. We see it very well when topics like “green energy”, “sustainability” and even “digitalization” are discussed. The power of the lobby is always in the old economy, the representation of new and disruptive companies is almost non-existent and so the main influence comes from existing organizations. These companies do everything to bring their interest into place so nothing changes. This is why a lot of governmental power is shifted towards the interest of the lobby. As the system is most of the time-dependent on these lobby activities (party financing, board seats, access to jobs, etc.) this is a strong incentive to leave things as they are and never change even it would make more sense.

3. Underqualified personnel

As in every industry, the required skill set is about to change drastically. This is also true in governments and ministries. But due to the special dynamics of public administrations, it is hard to upskill the management or replace it when necessary. So, the people might feel threatened by changes and their intrinsic motivation is to keep the current position and status, so they must block every initiative pushing for new perspectives and the usage of new technologies. This leads to wrong incentives within the system that lead to instant failure when changing the status quo.

4. “Company” politics

As mentioned before, the people who are blocking the change are the key source for failed transformation. It is the lack of skills and the lack of understanding that frightens them and the role in the company politics. They usually form strong allies within the system to systematically influence decisions made or also the outcomes of certain projects. As this political minefield is especially hard to tackle, it is very important to find out key decision-makers and their fears about the change. These fears can root from existential fears to perspective fears (no promotion etc.) up to personal financial impacts.

5. The power of pretending

For decades there are “digital agendas”, “digital roadmaps” or whatever out there from many governments around the world. The sad thing is that these promises are mostly only made for political reasons and for agenda-setting to establish a party as a “driving force for the future” but are not a strategy to actually change something. This lack of commitment combined with the power of media to be “satisfied” with a new headline, leads to a focus on “showcase projects” instead of tackling the real problems.

We see that show-off-projects mentality almost worldwide where governments start with some siloed project that has a strong public opinion and is easy to communicate. The problem with this approach is that there is a lot of promise combined with constant under-delivering and a huge loss of money. Most of the systems are built like an island and there is almost always a lack of a holistic picture.

6. Federalism – “We are better here”

In my many years talking and advising governments and ministries around the world, I experienced one phenomenon which is really wasting so much money without any outcome – federalism for projects. There are tons of projects every country, every region or even sometimes every city needs to “reinvent”. The lack of a holistic approach and a lack of combining resources leads to a lot of stand-alone solutions, a waste of money but also very low adoption rates as the network effect will never really work.

Especially when looking at solutions that need new disruptive solutions and also the power of digital ecosystems, this lack of holistic approach hinders growth in the big picture.

7. Focus on “Legal compliance” instead of “Customer Success”

What happens when solutions are only developed with the fear of problems in mind? – They cease to exist.

Exactly this is true when it comes to innovation in most government agencies. The fear for legal problems and legal pitfalls is so big that the outcome and the gains for their “customer”, us people, are totally left out. They focus on producing legally acceptable solutions, but they forget what the customer actually wants and when to use them. This is a wrong view of the solution, and it should be changed with a “customer-centric” view on the problem.

It is not about unlawful behavior but especially a new way of thinking. A process where the problem is tackled and solutions are brainstormed before the “fear of legal” are blocking all innovation. Legal must be a part of the process, but it comes after finding the right solutions without blocking the solution-finding-process itself.

8. Low adoption rates – wrong scopes

“Customer Centricity” is a huge problem as outlined before. This leads also to slow adoption rates and most of the time even cancellation of the project. This is a vicious circle as more failing projects give the decision-makers more “power” in saying “we have always done it like that, don’t change anything, digital is not working”.

The low adoption is mostly not because they lack money for marketing or support from the outside as most projects get strong backing from other parties involved. It is due to the misconceptions around what the citizens want and how this solution can deliver an added value for many areas and not just for 1 specific problem.

9. Lack of a digital ecosystem plan

The most fascinating finding was that there is barely a plan to create a government ecosystem. We see such systems being implemented in some countries around the world, but it is still quite concerning to see how many countries lack innovation and government digital ecosystem plans to actually incorporate digital services as the new standard.

This missing link and the missing holistic approach are most of the time dooming projects from the beginning. So even before starting a project, this could be a strong indicator that none of the above-mentioned points needs to be there to indicate that the transformation projects will fail.

A new way of thinking is needed

Politics used to be a reactive model. It needs to be bad before it can be good or people even speak about it. But we need to think about the role of the government differently. Where are externalities in the future, where are market inefficiencies evolving and what is the best for the whole society. Digital innovation and especially disruptive new business models bring a lot of fortune to a limited number of companies and people, global warming will affect countries around the whole globe, overfishing and resource depletion will affect every economy worldwide. The global competition for low taxes, the carbon emission evasions, global resource shortages, and also social problems are on the brick to become a real threat to the stability of the world.

When we want to prevent chaos, we need governments to lead the way and not to wait until it’s too late. Collaboration on big scales, internationally and with many stakeholders, and also global holistic thinking are key to a successful and prosperous future.

Changing Complex Systems – 3 Key Steps For Facing Complex Problems

Outlook on governments and digital transformation

We see that there is a long list of things that can go wrong when trying to transform governments and the way they serve their citizens. Changing so complex structures is a task that is usually not only performed from within.

There needs to be a structural change in how the governments, ministries, and agencies work together and what the main incentives need to be. Technology is all around us and not only companies need to change but also governments. Despite the potential cost savings and the better adoption to a changing economy, it is also important to have this governmental change management in place when we need to tackle new challenges of the future like a hypermobile workforce, online-driven value chains around the world, sustainability, resource allocation, social security and much more.

CEO & Founder of MoreThanDigital. Serial entrepreneur since he successfully founded his first companies at the age of 13. He has always questioned the "status quo" and is committed to innovation, disruption and new ideas. As International keynote speaker, consultant for companies and governments & states, lecturer and published digital transformation expert, Benjamin tries to advance the topics of digitalization, digital transformation and innovation internationally.

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