Today, technology has become central to how every business competes. Futuristic advancements like artificial intelligence, big data and cloud computing are no longer pie-in-the-sky propositions, but mission critical initiatives that leaders are racing to implement within their organizations.

Unfortunately, most  of these initiatives fail. In fact, McKinsey found that fewer than a third of organizational transformations succeed. That’s incredibly sobering. Imagine any other initiative with that type of expected return not only getting consistently funded, but enthusiastically viewed as a smart bet on the future.

Yet digital transformation doesn’t have to be a sucker’s bet. The truth is that digital transformation is human transformation and that’s where you need to start. Initiatives fail because organizations habitually get blinded by the “gee-whiz” aspects of technology, don’t focus on clear business objectives, scale too fast and then declare victory way too early.

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In 1980, a young Harvard Business School professor named Michael Porter published Competitive Strategy, which drove thinking on the subject for the next 30 years. In essence, he argued that you build sustainable competitive advantage by maximizing bargaining power throughout a value chain.

Yet more recently, that kind of single firm level analysis has been called into question and leaders have learned to look more broadly at ecosystems. In fact, a recent report by Accenture Strategy found that because business models are being constantly disrupted, ecosystems have become a “cornerstone” of future growth.”

While value chains are strictly defined by “primary activities” such as “inbound logistics” and “support activities” like technology, ecosystems have mostly been a nebulous term. Clearly that’s not good enough. If we are going to compete in an ecosystem-driven world, we need to understand how they function and how we can leverage them to drive a business forward.

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When Amazon announced it would pull out of its HQ2 project in Long Island City due to local opposition, many were shocked. How could local residents oppose a deal that would generate 25,000 jobs and $27 billion in tax revenues for a relatively meager $3 billion in tax breaks? It just seemed illogical and bizarre.

Yet look closer and the concerns do not appear to be completely unfounded. You only have to look at the recent situation with Foxconn in Wisconsin, where massive tax breaks led not to prosperity, but to a string of broken promises, to see the perils. While the Amazon deal was vastly different, the pitfalls of these kind of transactions are very real.

At the same time, New York doesn’t seem to have trouble attracting businesses without sweetheart deals, despite high taxes. In much the same way, technology and entertainment companies continue to flock to California. So the real question is not the merits or demerits of any particular deal, but how does a region become an industrial center in the first place?

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Over 50% of startups fail (and that number goes up to 75% for venture backed startups). The same is true of about three quarters of corporate transformations, which is probably why the average lifespan on the S&P 500 continues to shrink. These statistics tell a humbling story: few significant endeavors ever actually succeed.

So it’s probably not surprising that we’ve come to glorify failure. We are urged to “fail fast” and are cheered on when we do. Failure, after all, is hard evidence that you’ve tried something difficult and paid the price. Yet failure, as anyone who actually experienced it knows well, is a horrible, painful thing.

As I explain in Cascades, great transformations are achieved not by glorifying failure, but when we learn from mistakes and begin to do things differently. That’s how great enterprises are transformed, industries are disrupted and then remade a new and seemingly all powerful tyrants are overthrown. Failure is something we should never accept, but rather overcome.

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We live in a transformational age. Powerful technologies like the cloud and artificial intelligence are quickly shifting what it means to compete. Social movements like #MeTo are exposing decades of misdeeds and rewriting norms. The stresses of modern life are creating new expectations about the relationship between work and home.

Every senior manager and entrepreneur I talk to understands the need to transform their enterprise, yet most are unsure of how to go about it. They ordinarily don’t teach transformation in business school and most management books minimize the challenge by reducing it to silly platitudes like “adapt or die.”

The truth is that change is hard because the status quo always has inertia on its side. Before we can drive a true transformation, we need to unlearn much of what we thought we knew. Change will not happen just because we want it to, nor can it be willed into existence. To make change happen, we first need to overcome the myths that tend to undermine it.

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Imagine yourself as the CEO of a Dow component company in 1919. You are fully aware of the technological forces that would shape much of the 20th century, electricity and internal combustion. You may have even be an early adopter of these technologies. Still, everything seems like business as usual.

What you don’t see, however, is that these inventions are merely the start. Secondary technologies, such as home appliances, radio, highways and shopping malls, would reshape the economy in ways that no one could have predicted. Your company has a roughly 50% chance of remaining on the Dow a decade later.

We are at a similar point today. New inventions, such as quantum computing, neuromorphic chips, synthetic biology and advancements in materials science already exist. It is not those inventions, however, but the ecosystems they spawn that will shape the decades to come. We’re all going to have to learn how to compete in a new era of innovation.

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One of the questions I get asked quite often, both at conferences and when coaching executives, is what type of personality is best suited for innovation so that they can optimize their hiring. Are technical people better than non-technical people? Introverts better than extroverts? Is it better to hire foxes or hedgehogs?

The first thing I tell them is that there has been no definitive research that has found that any specific personality type contributes to innovation. In fact, in my research I have found that there is not even a particular kind of company. If you look at IBM, Google and Amazon, for example, you’ll find that they innovate very differently.

The second thing I point out is that every business needs something different. For example, Steve Jobs once noted that since Apple had always built integrated products, it never learned how to partner as effectively as Microsoft and he wished it would have. So the best approach to hiring for innovation is to seek out those who can best add to the culture you already have.

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In 1957, Ken Olsen founded Digital Equipment Corporation (DEC) with his MIT classmate, Harlan Anderson, and by the 1960s, the company had pioneered the minicomputer revolution. Much cheaper than IBM mainframes, but still powerful enough to be useful, these machines helped make DEC one of the world’s leading technology companies.

Hailed as a visionary, Olson was named “America’s most successful entrepreneur” by Fortune magazine in 1986. Yet as AnnaLee Saxenian explained in Regional Advantage, by that time the minicomputer industry was already being disrupted by PC’s and DEC would never recover. It was acquired by Compaq in 1998.

The truth is that everybody gets disrupted eventually, even a visionary entrepreneur like Olsen. What makes the difference is whether you are able to chart a new path. That takes more than merely being smart and ambitious, you need to empower change from within. It’s never easy, but there are some basic principles that can help you reinvent your organization.

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In 1980, IBM was at an impasse. Having already missed the market for minicomputers, it was now seeing a new cadre of competitors emerge. Fledgling companies like Apple and Commodore were selling stripped down computers for personal use and the market was growing quickly. It looked like IBM would miss out again.

So the company’s leadership authorized Don Estridge and Bill Lowe to set up a skunk works in Boca Raton, FL and begin work on what was to become the PC. Working largely in secret and eschewing many of IBM’s traditional standards and processes, the team would bring the PC to market in just a year and change computer history.

Today, the computer industry is at a similar impasse. As Moore’s Law comes to an end, there is an urgent need to introduce new computing architectures, one of the most promising being quantum computing. However, this time, rather than working in secret, it has embarked on a highly collaborative journey to advance the technology and bring it to market.

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I was recently invited by Accenture Strategy, along with other thought leaders such as Bruce Weinstein and Andrew Winston, to discuss its research on trust and competitive agility. In a study of 7000 companies the firm found that trust among a diverse ecosystem of stakeholders is increasingly becoming a competitive advantage.

One of the most interesting aspects of the discussion was how crucial trust is for driving transformation and change. We tend to think of trust as static, but Accenture’s research, as well as that of the participants, made it clear that trust is especially important when you need to drive an organization to do something different.

All too often, transformation is seen as a simple matter of strategy and tactics, but it’s far more than that. Nobody can really drive change alone. You need buy-in from a variety of stakeholders, such as customers, employees, suppliers, analysts and investors to make it work. So before you set out to transform your organization, you first need to build trust.

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