This is part 1 of a 4-part series on organizational transformation.
These days, “digital transformation” is an increasingly popular phrase in the business world, and it is challenging organizations to carefully consider how to retool their strategies. Digital transformation doesn’t simply mean to digitize information or move services from manual/analog into digital format. Rather, digital transformations are an entirely new step change enabled by disruptive technologies. For example, the Internet of Things provides exponential growth of data to mine and empowers smart devices, and autonomous vehicles are shifting the driving and car purchasing habits of consumers. By another name, these are business transformations that are digital at their heart, and they require businesses to rethink and change the core of their operations, marketing, services, and products. They can create new industries and drive customers into new markets.
If applied strategically, disruptive technologies allow businesses to transform, to lead, or to keep pace with others within their industry, else play catch up to a digital strategy that someone else has defined, or worse, fade in the business landscape. There is a growing sense of urgency in companies to develop and enact digital transformation strategies that will spring them into their next chapter.
Of the many challenges that businesses face in determining what will be needed to sustainably transform – strategy, operations and processes, technology and data, and people – arguably, the most challenging are the organizational and people-related aspects. If you’re working with an existing culture, people must “unlearn” the old processes, thinking, values, and behaviors. Here are some organizational challenges you may face and how you can approach them.
- Is the culture set to enable the strategy? Cultures oftentimes turn a dynamic strategy into concrete blocks. Consider the following when approaching the “digital culture” of your organization:
- Core Values: It may be an optimal opportunity to redefine the core values of the organization to align with the transformation.
- Change as a Journey: Find ways to open the culture to the change that lies ahead. Recognize that everyone will be at different points on the change journey, but challenge and invite them to contribute and fuel the transformation. Each person should be able to identify their role in enabling the strategy.
- Cultural Acceptance: Recognize the acceptance of changes within your organization. This signifies that it’s safe to proceed or if you need to retreat and reevaluate.
- New Ways of Thinking and Working: Create a culture of openness to new ideas, mindsets, people, and services from external companies and people you may not have known even existed. Create the understanding with your organization that competing in the same playing field as your competitors may take new kinds of talent and disciplines, smart machines, open innovation, gamification, agile methodology, etc.
- Is the leadership ready to help drive the transformation? All levels of leadership have roles to set the direction and model the behaviors that drive the digital transformation. A few ways to establish a leadership model that will help your organization take the next step on the digital journey are:
- Whether it’s the board of directors that is needed to recheck the core of the business and balance the need for action/change into digital, the COO that needs to establish a new operating model, or the chief data officer who needs to bolster and exploit data for the company’s shifting strategy – it takes all levels of leadership to establish, communicate, and drive the transformation strategy and evaluate progress.
- Ensure that leadership understands the digital transformation. Leaders must be digitally savvy and able to connect new technologies to the business value. Build a program to raise their awareness of the changes and continually revisit the program to ensure the new thinking and behaviors are sustained.
- All leadership must be able to clearly articulate the transformation to the organization. This helps separate the reality from the hype, and the clear opportunity from the vagueness and uncertainty of a changing landscape.
- Leaders must model the behaviors needed for a culture that enables the digital strategy.
- Consider new leadership positions, such as a Chief Digital Officer, to accelerate the development of the digital strategy, or a Chief Data Officer to ensure the best data is available to drive business decisions.
- Is your organization’s capability up to speed to enable the transformation? This doesn’t simply mean IT infrastructure or operations; it also means the core competencies that are needed for a new digital era. And don’t forget the following people-related aspects of a solid technology platform that will support a true digital transformation:
- Core competencies must be augmented so that everyone is fluent in both business and technology. New integral components now required are cloud and mobility, cybersecurity, and analytics and data science.
- Right-size the agility and responsiveness of your organization. If your organization has been IT cost-managed, an investment to rebuild technology as a core competency is required.
- As you are building new competencies and changing the organization, be sure not to create new silos.
- Find the right talent to build these core competencies, and let them flourish as high-performing, outcome-based teams. This will complement and encourage an open culture based on mutual respect, rather than organizational line of reporting. They will bring different sets of thinking and diverse experience to the table.
When embarking on a digital transformation, many organizations focus solely on the latest technological advances, “bleeding edge” innovations, or an increased focus on research and development. While these are all important areas of emphasis, it is equally important to remember that a true digital transformation must be approached as a change effort. And as with any change effort, the organizational aspects of culture, leadership, and core competencies cannot be ignored. For it is an organization’s people that will ultimately advance this type of transformation, or decide that the status quo is sufficient. Does this sound familiar?
How can you tell if your company is focusing on the right organizational aspects to make your digital transformation successful? Stay tuned for the next part of this blog series, where we will provide a framework for a health check.