Why Digital Transformations Fail: Putting People at the Centre of Change
Date Posted: Monday, 12th May 2025
Digital transformation has become a strategic imperative for UK organisations across every sector. From financial services to manufacturing, healthcare to retail, companies are investing unprecedented resources in cloud migration, data platforms, AI integration and modernised infrastructure. The commitment is substantial, with UK businesses continuing to increase their digital transformation spending year on year
Yet despite this, the success rate remains alarmingly low. Research consistently shows that approximately 70 % of digital transformations fail to achieve their stated objectives or deliver sustainable value, with Boston Consulting Group’s April 2025 analysis of 1,700 global programmes finding that only “about one-third accelerate growth in a value-accretive way.”
For UK organisations specifically, many business leaders report their transformation initiatives as "not fully meeting expectations" in terms of ROI, timeline or business impact.
This article examines why so many transformation initiatives underperform despite significant investment, highlighting how talent factors often determine success or failure. By understanding these underlying causes, organisations can develop more effective approaches to digital transformation, approaches that balance technological innovation with the human capabilities essential for sustainable change.
The Missing Link: When Technology Isn't the Problem
The conventional narrative around digital transformation emphasises technological innovation, implementing new systems, migrating to cloud environments, developing data platforms and integrating AI capabilities. This technology-centric framing dominates boardroom discussions and implementation roadmaps.
Yet when transformation initiatives falter, technology implementation rarely appears as the primary cause. Post-implementation reviews of unsuccessful transformations frequently highlight people-related factors as significant contributors to underperformance:
Capability gaps in teams implementing new technologies
Resistance to change among employees and middle management
Leadership misalignment on transformation vision and priorities
Talent shortages in critical technical and change management domains
Knowledge transfer failures between external consultants and internal teams
This pattern appears consistently across sectors. As an example, the UK financial services industry has invested heavily in digital platforms, yet many technology modernisation initiatives in banking deliver below-expected value, with integration challenges and adoption issues frequently cited as contributing factors.
Research consistently indicates that human factors, change management, skill development and organisational alignment all play a more decisive role in transformation outcomes than technical implementation challenges; the World Economic Forum’s Global Lighthouse Network: Mindset Shifts Driving Impact and Scale in Digital Transformation (Jan 2025) highlights that the newest Lighthouses overcame the “digital scaling slump” specifically by “partnering with their frontline workforces to localise adoption.”
The message becomes clear: while technology enables transformation, people determine its success.
The Capability Crisis: UK's Digital Talent Challenge
For UK organisations, the people dimension of transformation is particularly challenging due to a persistent and growing digital skills gap. This talent shortage creates a fundamental constraint on digital ambitions that technology investment alone cannot overcome.
The Scale of the UK Skills Gap
The dimensions of this talent challenge are substantial:
A significant proportion of UK job postings now require digital skills to some degree
Many UK businesses report difficulty hiring for technology roles
Organisations face increasing costs for digital talent acquisition and retention
Key transformation roles in data science, cloud architecture, cybersecurity and product management often remain open for extended periods
This national skills shortage creates particular challenges for transformation initiatives, which typically require specialised capabilities beyond general digital literacy. The most critical transformation roles combine technical expertise with business understanding and change leadership, a combination that remains in short supply across the UK talent market.
Transformation-Specific Capability Gaps
Successful digital transformation requires specific capabilities that frequently remain underdeveloped in UK organisations:
1. Translational Leadership
Transformation demands leaders who can bridge business strategy and technical implementation with individuals who understand both commercial objectives and technological possibilities. Gartner’s 2025 CIO & Technology Executive Surveycalls these hybrids “digital vanguard” leaders, noting they “co-own digital delivery end-to-end” and meet with CIOs four times more often than their peers to keep technology aligned with business value.
The shortage of professionals with this hybrid expertise creates a critical vulnerability in many transformation initiatives. Without effective translation between business and technical domains, organisations often develop solutions that are technically sound but commercially irrelevant, or strategically aligned but technically impractical.
Transformation fundamentally involves changing how people work, new processes, tools, decision frameworks and collaborative approaches. Effective implementation requires specialists who understand the human dimensions of change, including:
How to communicate transformation vision effectively across different stakeholder groups
Techniques for building adoption through targeted training and support
Methods for measuring and accelerating behavioural change
Approaches for addressing resistance and building commitment
These change enablement capabilities remain underdeveloped in many UK organisations, with fewer UK companies maintaining dedicated change management resources for digital initiatives compared to international counterparts.
3. Integration Specialisation
In established organisations, transformation rarely occurs on a greenfield basis. Instead, it requires careful integration with legacy systems, processes and organisational structures. This integration demands specialised expertise combining:
Deep understanding of existing technology landscapes
Knowledge of modern integration approaches and technologies
Stakeholder management skills to navigate complex organisational boundaries
Risk management capabilities to ensure business continuity during transition
The professionals who possess this integration expertise are in high demand across the UK market, yet their contribution often determines whether transformation value is actually realised.
4. Technical Specialisation in Transformation Technologies
Beyond general digital skills, transformation requires deep expertise in specific technical domains such as:
Cloud architecture and migration strategies
Data engineering and analytics implementation
API design and management
DevOps and continuous delivery implementation
AI and machine learning operationalisation
The UK faces significant demand for these specialised technical areas. Government and industry studies continue to flag acute shortages of cloud engineers and data specialists: a March 2025 Public Accounts Committee report covered by The Guardian warned that the civil-service ambition to scale AI is “compromised by legacy systems, low-quality data and a scarcity of suitably skilled staff,” noting competition with the private sector for cloud-migration and data-engineering expertise.
This talent gap creates a fundamental constraint on digital transformation ambitions. Without these essential capabilities, even the most sophisticated technology investments struggle to deliver intended outcomes.
The Organisational Disconnect: How Companies Undermine Their Own Success
Beyond the external talent challenges, many organisations inadvertently undermine their transformation success through internal approaches that fail to address the people dimension effectively.
Transformation as a Technology Exercise
Despite evidence that people factors significantly influence transformation outcomes, many organisations continue to frame digital initiatives primarily as technology implementations. This framing has significant consequences for resource allocation and priorities:
Transformation budgets often allocate significantly more to technology and systems integration than to developing internal capabilities, leadership development and change enablement
Business cases focus predominantly on technology costs and benefits, with minimal analysis of people-related investments or risks
Governance structures emphasise technical delivery metrics over adoption measures or capability development
Leadership attention concentrates on technology selection and implementation timelines rather than workforce readiness or cultural adaptation
This technology-centric framing creates a predictable pattern: substantial investments in sophisticated platforms that remain underutilised because the human elements weren't sufficiently addressed.
The Staffing Afterthought Pattern
For many organisations, staffing considerations emerge as an afterthought rather than a foundational element of transformation planning. This reactive approach to talent manifests in several ways:
Transformation roadmaps define technical milestones without identifying the specific capabilities required to achieve them
Recruitment for critical roles begins only when their absence becomes a visible project blocker
Skills development investments focus on technical training for new systems, neglecting the broader capabilities needed for successful transformation
Knowledge transfer from external consultants to internal teams occurs late in implementation, often with insufficient structure or time allocation
In contrast, successful initiatives integrate workforce planning directly into transformation roadmaps rather than treating hiring as an afterthought.
The Structural Limitations of Internal Hiring Approaches
Many organisations attempt to support transformation hiring through traditional internal recruitment functions, despite evidence that this approach creates significant risks. Conventional recruitment processes are often misaligned with transformation talent needs:
Internal recruitment teams typically lack the technical depth to effectively evaluate specialised digital capabilities
Standard corporate recruitment timelines often prove too lengthy for competitive transformation hiring
Volume-oriented recruitment metrics incentivise breadth over depth, whereas transformation hiring requires intensive focus on candidate quality and precise role alignment
Internal systems often lack visibility into passive candidate communities where transformation talent resides
These structural limitations create serious impediments to securing the capabilities that transformation requires. When internal teams are overwhelmed or simply not configured for specialised digital hiring, the recruitment process becomes reactive, inconsistent and ultimately risky for transformation outcomes.
Leadership Bandwidth Constraints
Digital transformation places extraordinary demands on leadership time and attention. Many initiatives struggle because leaders find themselves caught between strategic direction setting and operational talent management:
Senior technology leaders often spend substantial time on recruitment activities during transformation, distracting from strategic priorities
Hiring managers lack capacity for deep market engagement while simultaneously leading implementation efforts
Knowledge transfer and team integration receive insufficient leadership attention due to competing priorities
Talent retention strategies become reactive rather than preventative as leadership focus remains on immediate delivery challenges
This bandwidth constraint forces difficult trade-offs between transformation guidance and talent management, often compromising both in the process.
Flipping the Odds: Building a People-First Transformation Approach
Despite these challenges, organisations can significantly improve their transformation outcomes by adopting people-first approaches. Research indicates that transformations emphasising people and change management outperform those that treat change as a purely technical rollout; Forrester’s Digital Transformation Services Landscape, Q2 2025 shows programmes led by providers with “dedicated organisational-change offerings” deliver 23 percentage-point higher ROI than tech-only engagements.
1. Elevate Talent Strategy to a Core Transformation Pillar
Successful transformation begins with recognising talent strategy as a foundational element rather than a support function:
Include workforce planning as a distinct workstream within transformation programmes, with dedicated leadership and resources
Ensure talent considerations receive the same board and executive visibility as technology decisions
Incorporate capability requirements and talent risks into transformation business cases
Establish talent-focused KPIs alongside technical delivery metrics in transformation governance
This elevation ensures that people considerations influence transformation planning from inception rather than emerging as afterthoughts during implementation.
2. Map Critical Capabilities with Precision
Move beyond generic digital skills requirements to identify the specific capabilities that will determine transformation success:
Conduct detailed capability mapping for each transformation phase, identifying not just technical skills but the full spectrum of expertise required
Differentiate between capability types needed for successful transformation
Transitional capabilities needed primarily during implementation
Specialised capabilities required intermittently or for specific challenges
Leadership capabilities to guide and sustain transformation momentum
Identify critical roles that disproportionately influence transformation outcomes, focusing recruitment and development resources where they will create maximum impact
Define success profiles for key positions that address technical expertise, business understanding and cultural alignment
This precise capability mapping creates the foundation for effective talent strategy, ensuring resources target the most critical needs.
3. Develop Multi-Channel Talent Approaches
Recognise that no single talent source can address all transformation needs:
Targeted external hiring for critical capabilities unavailable internally
Upskilling programmes for internal talent with transferable skills and learning capacity
Strategic contractor engagement for specialised or temporary requirements
Partnership relationships for capability areas requiring external expertise
Create structured knowledge transfer mechanisms ensuring that external specialists build sustainable internal capabilities rather than creating dependency
Establish governance models that enable consistent experience across different talent sources, maintaining coherent transformation vision despite diverse resourcing approaches
This multi-channel approach provides both effectiveness and efficiency, targeting different talent sources based on transformation requirements rather than defaulting to a single approach for all needs.
In a talent-constrained market, attraction strategies must extend beyond compensation:
Develop transformation-specific employer value propositions that address what motivates digital talent
Articulate how transformation roles contribute to both organisational and personal growth
Showcase transformation leadership commitment through authentic communications and engagement
Address potential concerns about organisational readiness for change directly rather than avoiding difficult conversations
This authentic approach to talent attraction proves particularly important for senior transformation roles, where candidates carefully evaluate organisational readiness alongside role specifics.
6. Build Sustainable Internal Capability
While external hiring often provides immediate capability, long-term transformation success requires building sustainable internal expertise:
Develop transformation academies focused on building critical capabilities through structured learning journeys
Create apprenticeship models where experienced specialists mentor internal talent, accelerating capability development
Establish communities of practice that foster knowledge sharing and continuous development
Implement retention strategies specifically designed for transformation talent, addressing their distinct motivations and career aspirations
This capability building approach ensures that transformation creates lasting organisational value rather than temporary change dependent on external expertise.
Conclusion: People Determine Transformation Success
Digital transformation represents both opportunity and challenge for UK organisations. The potential value is enormous, enhanced customer experiences, operational efficiency, data-driven decision making and innovative business models. Yet realising this value demands more than technological investment.
The evidence points consistently to the critical importance of people factors in transformation outcomes. The organisations that succeed approach transformation first as a human challenge enabled by technology, not a technological challenge with human implications—echoing Harvard Business Review’s February 2025 essay “Why Digital Transformation Starts with People,” which argues that cultural readiness accounts for “over half the variance” in digital-value capture.
They recognise that no platform, system or algorithm can deliver sustainable change without the right capabilities surrounding it.
For executives leading transformation initiatives, this perspective prompts essential questions:
Have we integrated talent strategy into our transformation planning from inception?
Do we understand the specific capabilities that will determine our transformation success?
Are we investing proportionately in the human dimensions of our transformation?
Have we established the right partnerships and approaches to access transformation talent?
The answers to these questions often determine whether transformation investments deliver their intended value or join the many that fall short of expectations.
In the digital age, competitive advantage emerges not from the technologies organisations purchase but from how effectively their people leverage these technologies to create value. By placing talent at the centre of transformation strategy, organisations can significantly improve their odds of success, turning digital aspiration into sustainable business value.
Looking to develop a more comprehensive approach to your transformation talent strategy? Our guide on People-Powered Digital Transformation provides a complete framework for integrating talent considerations into your digital initiatives.
Written By:
Lara Webb
As a founding member and Director of TRIA, Lara has been instrumental in shaping its strategic direction and ensuring its commitment to client success. Her expertise in the recruitment industry is matched by her dedication to fostering a collaborative and innovative work environment.
