Your organization’s journey to digital transformation must start with you, the leader.

Digital transformation pundits often draw great attention to the ‘digital’ piece of the equation.  But while technology admittedly is a primary enabling factor, it is most important to realize that this is a transformation – not just an ordinary change.  And it is a fundamental transformation of your business – potentially requiring changes to your business model, organization structure, incentive plan, culture, business processes, leadership and more.

Any organization is a reflection of its leadership past and present.  The successes it has achieved, the trials it has overcome, the failures it has experienced are attributable to the leadership it has received.  Of course, an organization does not completely change as soon as you walk in as a new leader, but after you have been in place for a period of time, you must assume responsibility even for issues you have not yet addressed.

Let’s face it.  Your organization is not going to transform unless you transform as its leader.  Your personal transformation will affect the way you spend your time and what you talk about.  You must develop a laser-like focus on speed, flexibility, and customer obsession.  And these tenets will also change the way you lead.

Earn Their Heads and Hearts Too

Too many employees are giving their time, but not their energy or passion, to their jobs.  They are doing just enough to get by and are unwilling to take risks or commit themselves fully.  Studies consistently show that less than a third of all employees are actively engaged.1  And although these studies are well-known, leaders have not taken the steps necessary to improve the situation.  In the digital era, it will not be sufficient simply to have an employee’s hands.  You also need their heads and their hearts.  This can only be achieved by transforming the way you have been leading.

Empower Decision-Making at All Levels

Implementing new technologies will not radically speed your organization if decision-making is bottlenecked.  Decisions must be pushed down to the people who have the most knowledge and are closest to the work.  This requires leaders to give up much of the control so common in an industrial age organization. You must ensure the vision and direction of the organization are clear to all.  Every individual must understand how to best contribute to the achievement of the organization’s goals and be empowered to act.  You must be supportive of their efforts while ensuring they receive the necessary coaching and mentoring.

Prioritize and Focus Efforts on Growth Initiatives

Company operating models often are rigid without the capability to flex for cost reduction or for growth.  According to an Accenture Research survey 2, 82% of companies are working to reduce costs in order to free funds for growth initiatives.  However, the majority of businesses have identified so many growth opportunities that they fail to focus, instead opting for a shotgun reinvestment approach – often at the discretion of individual budget managers.  This approach sub-optimizes growth.  At the same time, too many companies continue to hold on to business activities that do not truly add value to the bottom line.  This diverts both costs and management attention.  In fact, only 22% of executive respondents to this same survey agreed that their company’s operating model is aligned to fuel strategic growth initiatives.  Digital era success will require you to proactively eliminate non-value-added activities and their costs on an ongoing basis.  The resulting cost savings will be reinvested in growth initiatives prioritized at a corporate-level.  These initiatives will be divided into manageable pieces to promote agility while also ensuring the desired value is achieved.

Reimagine your Organizational Structure

Industrial age organizations are organized around functional departments.  Employees often feel more alignment with their functional area than with the company as a whole.  The goals of one department may conflict with those of another.  Patrick Lencioni wrote: “Silos—and the turf wars they enable—devastate organizations.  They waste resources, kill productivity, and jeopardize the achievement of goals.” 3  Obviously this is an impediment to achieving the speed, agility, and customer obsession required for success today and in the future.  As you identify and eliminate activities that do not bring value, spend time reimagining the structure of your organization.

Encourage Innovation from Every Employee

Innovation was likely one of your company’s drivers when it was a startup.  Then processes were implemented to gain efficiencies.  Nonconformance grew to be frowned upon.  Risk-taking began to be discouraged.  Failure – even in small things – became unacceptable. Gradually innovation dissipated among the rank and file.  Some companies addressed this by establishing an R&D department with an associated budget, but generally innovation was not encouraged elsewhere.  However, innovation is a hallmark of the digital enterprise.  Your company needs to be firing on all cylinders for success, and this requires the creative spark of each employee.  While processes and efficiencies are still important, you must also balance this with an encouragement of risk-taking along with celebration of – and learning from – failure.  Time and budget must be available to explore innovative ideas.  You must exhort employees to look outside the company for potential sources spurring innovative thoughts – to their industry, other industries, and even the startup community.  Excite them about generating ideas that will truly disrupt.  And of course, you will need a method to prioritize, test and implement your new solutions.

The biggest challenge of your business career is staring you right in the face, and it requires swift, decisive action.  The success – or failure – of your company depends upon its response to digital transformation.  And the transformation must begin with you.

Sources:

1 Adkins, Amy. “Little Change in U.S. Employee Engagement in January.” Gallup.com. Gallup, n.d. Web. 04 Apr. 2016.  http://www.gallup.com/poll/189071/little-change-employee-engagement-january.aspx.

2 Pearson, By Mark, Bill Theofilou, and Kris Timmermans. “The Broken Link: Why Cost Reduction Efforts Fail to Fuel Growth.” The Broken Link: Why Cost Reduction Efforts Fail to Fuel Growth (n.d.): n. pag. Accenturestrategy. Accenture. Web. 15 Mar. 2016.  https://www.accenture.com/_acnmedia/PDF-4/Accenture-Strategy-The-Broken-Link-Point-of-View.pdf.

3 Lencioni, Patrick M. “Silos, Politics and Turf Wars: A Leadership Fable About Destroying the Barriers That Turn Colleagues Into Competitors.” Wiley:. Jossey-Bass, Feb. 2006. Web. 30 Mar. 2016. 4http://www.wiley.com/WileyCDA/WileyTitle/productCd-0787976385.html

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