At Its Core, Digital Transformation Is About Change Management
“Digital transformation” is a big buzzword these days. As companies realize the value of integrating technology in everything from shipping to sales, we’re seeing more businesses step away from the traditional ways of operating and toward more efficient, lower-cost systems and processes.
Where many fail is in assuming that a company that embraces digital transformation requires technologists at the helm. In fact, that’s much less important than other characteristics of a successful digital transformation.
You need an appetite for risk
There is an inherent risk when you shake up the old way of doing things. Will it work? Will people embrace the new technology? For your organization to succeed with digital transformation, you must be willing and able to accept this risk and have a plan to mitigate it.
To mitigate some of that risk, you’ll need to make decisions faster to react nimbly to changing conditions. That may mean reassigning decision-making from those high-up leaders to the soldiers on the front lines, so to speak. They’re the ones seeing the day-to-day issues, so empower them to come up with iterative solutioning.
At the end of any successful transformation, the lasting value will come from cultivating digital acumen across the ranks of your organization so you invest in smarter ways of working that leverage distributed decision-making.
Be willing to experiment
Along with that risk comes a need for rapid experimentation. Your digital transformation project is unlike any other, and you don’t yet know what’s going to work. So there should be a lot of throwing pasta at the wall and seeing what sticks.
And experimentation is a lot less scary than it sounds if you’ve got technology on your side. You’ve got ample data to assist you in making informed guesses about what will work as well as a myriad of tools and accelerators to spin up proof-of-concepts.
The key is to try something, and if it doesn’t work, move on quickly to the next experiment. Don’t get too invested in any one solution until it’s proven itself. It’s that idea of failing fast that ensures, not that you’ve gotten it perfect, but that you’ve gotten it good enough to move forward.
Well-trained teams are crucial
Nothing gets done by any one person these days. More and more, companies rely on teams spanning the world in different functional areas. The good news is that you can get the very best talent in a field, regardless of location. The less good news is that sometimes it’s like herding cats to manage them all.
You may need to invest in recruitment like never before to ensure you have the right people and consultants on board for the success of this digital transformation project.
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Remember, getting people to work faster, smarter, and more accurately requires training, coaching, and empowerment. It doesn’t happen by magic, so you’ll need to invest heavily in training throughout the digital transformation project, not just on the technology, but on how to work effectively across functions and groups, how to break down problems, and how to make decisions in the face of ambiguity or uncertainty.
And when you do deploy your new digital capabilities, every team that will need even the smallest access to a new system must be apprised on how to use it, how and what data drives those operations, and how each function connects together to drive value across the organization. It may be a good idea to invest in regular refreshers and incorporate feedback from the teams about what works and what doesn’t, and evangelize continuous improvement as a culture.
Flip the leadership pyramid when needed
Before you fire your execs and replace them with technocrats, realize that there’s room for both.
Seasoned leadership brings something to the table, even if it isn’t a deep understanding of cutting-edge technology. You still need folks to look at the big picture, the day in the life of your people, and how this digital transformation will impact the future of the business. Oftentimes it takes a non-technical point of view to ensure that technology will drive actual value instead of perceived advantage.
Yes, you do want people across your organization who understand technology, though that can be outside consultants as well as strategically seeded tech experts in each department. But break down the demand for technical literacy into specific needs of the business. There is more value in the workforce understanding how a given business process is realized in a technology tool, and how that tool works with other tools to make your business run, rather than having everyone go deep on the tech stack.
And, as I said earlier, you can and should empower those frontline employees to make decisions, rather than having to bubble up all decisions to senior leaders, discussing the issue, then recommending a solution for next quarter. By then, the issue may have catapulted into catastrophe. Instead, give managers and team leads the power to make certain executive decisions, then step back and trust them.
These lower-level leaders should excel at not just technology but also soft skills. They should know that Ethel on the supply planning team is quite resistant to the software you’re integrating, and may need to partner with Joe, who has her wrapped around his finger, in order to get her on board. They should understand what the customer impact will be if X, Y, and Z features on a new platform are not implemented, and have the drive to ensure they are.
Transformation projects should be the “hands-on” school for your next-generation leaders. The people who roll with the punches on this project will be well adept to lead future digital transformation efforts, so keep your eyes out for those who excel and nurture their professional development.
Bottom line: You need digital acumen
So, to summarize: It’s less important that leaders are experts in technology and more important that they have digital acumen. Unfortunately, according to Harvard Business Review, less than 20% of companies have that rare combination of digital and management skills.
Digital acumen, to me, anyway, means leveraging that data and pattern recognition you have access to, thinking end-to-end across value streams, and taking personal responsibility for the collective mission. It is understanding how, in the long run, this digital transformation will impact the organization as a whole and generate lasting value.
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