Boost your digital transformation with Forward-thinking digital leadership

Why are only a handful of businesses at the forefront of their respective industries when digital technologies are readily accessible to all? This sobering question was raised during a recent EDX digital transformation leadership program.

Perhaps you can relate. Your company has attempted many times to transition to a digital business. By now, you hoped to be a digital powerhouse. You've invested a substantial amount of money, time, and effort into your digital projects, but the results have been unsatisfactory. You've seen some benefits but can't scale them. You are dissatisfied with the slow pace and apparent lack of benefit. Some reports say 70% of organizations fail at digital transformation. It's unsettling to think that your company could be one of them.

Despite this, you likely know of organizations whose digital transformations have yielded tangible results. “What distinguishes them?” you wonder.

Read on to learn what research has proven to be the basis for becoming a digital leader.

In 2012, the Capgemini Research Institute and the MIT Center for Digital Business collaborated on a study to investigate what distinguishes digital masters. They wanted to know which companies are leaders in their sectors. I believe that the study's findings are still useful for businesses looking to maximize the benefits of digital transformation today.

Digital mastery, according to the study, results from two factors: digital capability and leadership capability. The ability of an organization to use digital technology to improve customer experience, business models, and operational efficiency is referred to as digital capability. Leadership capability, on the other hand, is the ability to set and achieve strategic goals consistently. Leadership ability creates the conditions required to drive organizational-wide digital transformation. These include a well-defined digital transformation goal and strategy, the governance and key business partnerships needed to achieve the goal, and employee buy-in for the journey.

Organizations must address both components to achieve digital mastery and deliver effective digital transformation. The ability to design and implement a digital transformation roadmap is just as important as the ability to use technology effectively.

When the two aspects of digital leadership and digital capabilities were combined, the study came up with four categories:

1. Beginners who regard digital transformation as a technological initiative rather than a company-wide shift. Their digital tools are mostly isolated from the rest of the company and are maintained by the IT department. Not surprisingly, they have a low mastery of both digital tools and leadership skills.

2. Fashionistas who are enthusiastic about modern digital tools but lack leadership abilities. They have not, however, developed a digital strategy that aligns with their overall business strategy. They also lack a framework for digital governance.

3. Conservatives who excel at leadership but lack the necessary digital tools. They've created a digital strategy that aligns with their overall business strategy. Their weakness is their inability to make quick decisions. They have a risk-averse culture and a rigid governance structure. Consequently, they are behind in adopting digital technologies.

4. Digital masters have a high level of mastery of both digital capability and digital leadership capabilities. These organizations have successfully combined the two capabilities, effectively tuning digital technology into a competitive advantage. Every organization that is undergoing a digital transformation, in my opinion, should strive to join this group.

Which of these categories does your organization fall under?

Capgemini's research has shown over the years that digital masters significantly outperform the other three groups. Often, this is because digital masters start by honing their digital leadership abilities. Developing leadership skills for the digital age enables you to select the appropriate digital technology, integrate it into your organization's strategy, and implement it. Your digital transformation efforts will have a greater impact as a result.

Does your digital transformation show the digital leadership that's needed to make sure it's more than just putting technology tools in place?

A recent EDX program on digital leadership taught me how to demonstrate digital leadership. Here are the highlights:

1. Be responsive, customer-focused, and think from the outside in. This means staying in touch with customers and the internal and external ecosystem that serves them. Fast delivery of affordable, high-quality products and services isn't enough in today’s competitive world. Therefore, the ability to successfully respond to shifting customer demands is a crucial business advantage. As a digital leader, you must lead beyond the confines of your department or organization in order to gain insight into changing customer preferences. Leading beyond the boundaries of your organization enables you to respond quickly to rapidly changing customer needs, leverage the resources of others to be agile while maintaining scale, and rapidly enter new markets. The digital leader must be able to collect and use customer data to offer value and a great customer experience.

2. Be able to build and maintain strong relationships of trust. We understand that to meet the needs of our customers, we must collaborate with people outside of our own functions and organizations. To be successful, a leader must be able to build rapport and trust with those over whom they have no formal authority so that they are willing to collaborate with you and other team members. We can't rely on top-down leadership in the digital era. Customers and stakeholders, likewise, must be willing to share their needs, priorities, and perspectives. This requires a great deal of trust. The leaders must demonstrate their trustworthiness to build strong trust-based relationships. In the digital age, leaders need to stay in touch with customers, stakeholders, and competitors to make the best decisions.

3. Be able to effectively form, lead, and work in distributed cross-functional agile teams. Agile teams have replaced traditional teams that had stable membership and well-defined processes. In today's highly competitive digital world, team members come from a variety of functions, geographies, and even separate businesses. Now, the leader is responsible for guiding those over whom they have no formal authority. The leader must be able to quickly assemble and maximize the performance of a virtual team, knowing that leading a virtual team requires more than simply adding online meetings to a traditional team. To be successful with agile and virtual teams, the leader must take the time to develop a team charter, common purpose and goals, team roles, and operating principles, as well as a clear communication process. These ensure that teams are better equipped to form and carry out their goals.

4. Be capable of collaborating and co-creating with others to achieve mutual benefit. The leader must build and keep trust among collaborators, set clear roles and responsibilities, and use each partner's unique capabilities. They must also support the co-creation community with effective systems and processes. For successful co-creation, the leader must ensure that mutual value is established early and used throughout the process. Co-creation will fail unless all participants see benefits.

5. Be able to learn on the fly. The digital age brings complexity, uncertainty, and change. Continuous learning and growth are crucial for survival and performance. Experience, every encounter with others, observation, experiments, and everything else must be used to build a personal and organizational learning system. As a digital leader, you must cultivate your capacity to experiment, learn, adapt, and innovate continuously. This will improve your current performance while also laying the groundwork for future success. Amazon's Jeff Bezos once remarked, "What matters is, companies that don't continue to experiment and that don't embrace failure, eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence."

Following technological trends and deploying technology tools will never unlock the full potential of digital transformation. Develop digital leadership skills to scale your digital transformation efforts. You do not need to reinvent the wheel. Instead, to ensure a successful digital transformation, learn from the digital masters.