Digital transformation is imperative for all businesses – from the small to the large enterprise – that want to remain competitive and relevant as the world becomes increasingly digital. It requires the integration of digital technology into all areas of a business, resulting in fundamental changes to how businesses operate and how they deliver value to customers.
Beyond that, however, it’s a cultural change which demands that organisations continually challenge the status quo, and experiment often.
“Without the proper framing and orchestration at the overall company level, the best initiatives will fail to get the attention and investment they need. While it is important to encourage local ownership of ideas and projects, turning them into game-changers requires clear, sometimes ruthless direction from the centre around which projects to scale and in what order. Only the CEO has the power to provide this kind of direction across the entire enterprise. To do that effectively, CEOs need a holistic view of the digital threats and opportunities facing key parts of the business, and a way to link them to an overall vision for how digital is reshaping the competitive landscape.” – Harvard Business Review
According to the IDC report, ‘FutureScape: Worldwide CIO Agenda 2016 Predictions’, “One-third of the top 20 firms in industry segments will be disrupted by new competitors within five years.” It’s a ‘matter of transform or perish’, says the report. Yet, the same report goes on to predict that, by 2018, ‘70% of siloed digital transformation initiatives will ultimately fail because of insufficient collaboration, integration, sourcing or project management.’
Ad-hoc and uncoordinated digital transformation efforts are a major threat to business sustainability, and only the CEO can change that. Forbes magazine points out that because digital orientation requires companies to understand consumer behaviour, educate and train its leaders, invest in organisational culture, and take advantage of merging platforms, and synchronisation at all levels, the CEO needs to be at the helm of digital transformation with the support of the C-suite.
Executive support is critical, because CEOs need a holistic view of the digital threats and opportunities facing key parts of the business, and a way to link them to an overall vision for how digital is reshaping the competitive landscape.
3 ways to manage digital transformation
“Becoming a digital leader isn’t simply a matter of technological savvy,” according to Harvard Business review (HBR). “It’s about creating an agile organisation that can detect what type of change is essential and respond quickly with the most competitive solution.” The problem is that different areas of an organisation are aware of where digital threats and opportunities lie within their own sphere, but they often lack the ability to apply this knowledge to the organisation as a whole. To bring order to the chaos, HBR says there are three ways to best manage the digital transition.
DID YOU KNOW?
Climate change is forcing the energy industry to make dramatic changes. ENGIE, an international provider of power, natural gas, and energy services, is leading the transition to a more sustainable, de-carbonised world. CEO Isabelle Kocher has called climate change “a fundamental and general invitation to every one of us…to invent something completely different.” She believes energy and digital are ‘inextricably linked’, and because of that connection, ENGIE is developing renewable energy solutions and taking advantage of IoT to help customers streamline and optimise energy consumption. ENGIE exemplifies how the latest technology can help you boost revenue and revolutionise your products, while also enabling you to help build a more sustainable world.
Define where change is needed most
Four critical areas are impacted by digital technology. These are customer engagement, digital products and services, operational performance, and disruptive new business models. “Developing a clear point of view on the opportunities or threats in each area will suggest which capabilities need the most attention and where to concentrate investment,” says HBR.
Choreograph the change
Each effort to transform a company requires its own set of steps and should follow a thoughtful sequence. ‘Even the clearest digital strategy will fail if your people are unprepared to embrace it,’ says HBR. ‘Ensuring that change sticks involves the hard work of defining new roles, adding new skills and adopting new ways of working. And it is important to carefully choreograph the change, defining who will lead the effort and how it will be sequenced.’
Start by identifying areas of high value to the business that can be addressed in a short period of time. When you think about that value, ensure that you review things that are good for your business but also for your customers. Make sure you get through this first phase and celebrate the success. This will give the digital transformation leaders the credibility and confidence to embark on the larger more complex changes.
A word of caution form HBR: ‘Mobilising for this kind of change inevitably means shaking up the status quo and leaders themselves need to be prepared to manage the company differently.’
By connecting employees beyond the boundaries of their geographies or departments, the digital workplace empowers your people to direct their efforts from the bottom up, build communities of interest, drive knowledge management and collaborate in ways that make sense to them and delivers measurable business value. The digital workplace gives employees the tools they need to improve their communication, collaboration and connections with each other. Implemented effectively, it also allows organisations to mitigate common risks, adhere to their regulatory compliance mandates and ultimately realise enhanced business value.
Deloitte shares tips to transform your employees’ working experience:
- Ensure senior ownership. Manage the digital workplace at senior and strategic levels.
- Build strategic alignment. Align your digital workplace strategy with your business direction and strategy.
- Think holistically. Consider a holistic digital workplace rather than simply implementing individual technologies.
- Understand culture. Understand and support the existing organisational culture. Build an environment that supports the needs of your team.
- Deliver business value. Focus on driving business growth rather than technology implementation.
- Research technologies, your account manager can organise a meeting between your solution architects to build the best technology roadmap for your company’s needs.
- Make it easy. Introduce effective but easy to deploy ways for employees to do their work with widespread operational impact.
HBR advises that leading digital models have been distributed globally throughout an organisation via “digital relays” or champions within each geography and business unit. It’s a project team approach that relies on empowering people at every level of the organisation to work together to devise and implement solutions. It’s clear that only the CEO can manage the process of empowering people and democratising access to information. It’s the CEO who has to demolish the boundaries, give teams permission to set new rules, and delivers the strategic framework to underpin the new way of doing things.
To change the organisation, change yourself
There is no substitute for CEOs rolling up their sleeves and getting personally involved when significant financial and symbolic value is at stake. To create a supportive environment during the journey to digital transformation may require the CEO to undertake a personal transformation journey too. These actions will encourage employees to support and practice the new types of behaviour.
According to McKinsey, this involves ‘360-degree feedback on leadership behaviour specific to the program’s objectives, diary analysis to reveal how time is spent on transformation priorities, a commitment to a short list of personal transformation objectives, and professional coaching toward these ends.’
The role of CEOs is unique because they lead the organisation, and all other employees take their lead from them. A CEO who merely pays lip service to transformation will find everyone else doing the same. ‘Those who fail to model the desired mind-sets and behaviour or who opt out of vital initiatives risk seeing the transformation lose focus. Only the boss of all bosses can ensure that the right people spend the right amount of time driving the necessary changes,’ McKinsey cautions.
Digital transformation is a massive undertaking, especially for larger, established companies. When done right, it will result in a business that is more aligned with customer demands and resilient in the fast-moving digital future.
1. Make the transformation meaningful. People will go to extraordinary lengths for causes they believe in, and a powerful transformation story will create and reinforce their commitment. Success depends on the CEO’s willingness to make the transformation personal, to engage others openly, and to spotlight successes as they emerge.
2. Build a strong and committed top team. To harness the transformative power of the top team, CEOs must make tough decisions about who has the ability and motivation to make the journey.
3. When a CEO’s version of the transformation story is clear, success comes from taking it to employees, encouraging debate about it, reinforcing it, and prompting people to infuse it with their own personal meaning.