Why So Many High-Profile Digital Transformations Fail

In 2011, GE embarked upon an ambitious attempt to digitally transform its product and service offerings. GE also went to work on transforming internal processes like sales and supplier relationships. However, investors didn’t seem to acknowledge its transformation. The company’s stock price has languished for years, and CEO Jeff Immelt — a powerful advocate of the company’s digital ambitions — recently departed the company under pressure from activist investors. GE is hardly the only company to run into performance issues and sooner-than-expected executive departures in the midst of a huge digital transformation effort. Lego, Procter & Gamble, Burberry, and Ford also spent millions to develop digital products, infrastructures, and brand accompaniments, and got tremendous media and investor attention, only to encounter significant performance challenges, and often shareholder dissent. Perhaps companies would be better served by making smaller, more incremental digital bets that are more certain to pay off — and less likely to fizzle out.