How to Lead Digital Transformation: “Be open-minded, learn and take risks every day, be customer obsessed, and BE the change.”

One of the best parts of my job is sharing ideas with partners about how to build a better world. Today I had the chance to do just that on stage in front of 3,500 people and a live webstream audience from the Digital Innovation Summit 2019 in Barcelona, where energy and technology leaders are discussing the impact of innovations on production and consumption around the world. There, I joined Jean-Pascal Tricoire, Chairman and CEO of Schneider Electric – one of the world’s leading providers of digital and automation solutions – for a fireside chat.

We had a great conversation about digital transformation, partnerships and how culture empowers employees. Simply put, companies have no choice but to focus on digital transformation in a world where a new generation of building blocks like Artificial Intelligence (AI), the Internet of Things (IoT), edge computing, virtual and mixed reality, and quantum computing serve as key drivers of progress. The opportunity is staggering. By 2030, AI alone could raise global GDP by 14 percent, adding almost $16 trillion the world’s economy, and it is predicted that current and emerging digital technologies could generate business opportunity worth $100 trillion.

But digital transformation isn’t solely a business necessity. Advanced digital technologies offer powerful new tools and approaches for addressing some of humanity’s most urgent challenges, including sustainability and climate change.

 Embracing Digital Transformation

We already live in a world in which computing is deeply in embedded in almost every aspect of our lives. Increasingly, every interaction – whether it’s commercial or social and whether it’s evident or not – is digital. Every industry is being transformed by digital technology. This means that to succeed, every company must become a software company. It’s not just a matter of adopting the latest technologies. Rather, it requires a comprehensive approach to change that starts with an organization’s mission and purpose and includes a willingness to embrace cultural transformation, redefine innovation strategies, rethink operations and business models, and foster talent and skills development.

This change begins at the top. Leaders must start by looking at our company’s mission and long-term purpose and thinking carefully about how they align with strategy and whether they are truly centered around our customers’ needs. At Microsoft, this process led us to shift our mission from “a computer on every desk” to “empowering every person and every organization on the planet to achieve more.”

Transforming Culture and Investing in People

Transforming culture goes hand-in-hand with redefining your mission. The goal is to create an environment that supports strong change management, fosters an appetite for risk, encourages speed and agility, and pursues a test-and-learn approach to new ideas. I believe that collaboration and a coaching mindset are critical, and that an external, customer-based orientation is more important than ever. 

Clearly, cultural transformation at this scale can’t happen overnight. At Microsoft, we’ve been working with managers to help them focus on being role models for change, being better coaches for the people on their teams, and ensuring that they care about the things that matter to every single person. These steps are in service of a broader cultural shift at Microsoft where we have moved from a “fixed mindset” to a “growth mindset.”  

As companies move through this process, they can explore how best to use modern tools to support cultural change and empower employees to do their best work. For example, on my team, we’ve been using new technology tools to measure the effectiveness of meetings and provide data that salespeople can use privately to see out how time they spend interacting with colleagues versus engaging with customers.

The Importance of Tech Intensity

Another key aspect of digital transformation is something we at Microsoft call “tech intensity.” What we mean by this is that companies should adopt the latest, most effective solutions – not just technology for its own sake, but as a platform for building their own digital capabilities and creating their own technology innovations. This is the key to differentiation and long-term success. One of our most important goals at Microsoft is to create the platforms that our customers can use to build their own digital capabilities. We don’t want our partners and customers to be dependent on us – we want them to be independent with us. In the process, we can support them in their efforts to become technology companies that continually develop innovative solutions that enable them to generate new opportunities to drive growth and profitability.

The Power of Partnership

Our partnership with Schneider Electric is a great example. Founded by two brothers, Schneider started out as a pioneering French steel manufacturer during the height of the First Industrial Revolution nearly 200 years ago and it has been a leader in industrial technology ever since. Over the past decade, Jean-Pascal has led his company through a far-reaching digital transformation that has put Schneider at the forefront of a new industrial revolution driven by advances in cloud computing, AI, and other emerging innovative technologies. Today, Schneider Electric is using AI and IoT technologies to help its customers drive efficiency, optimize processes, enable predictive maintenance, and much more.

For instance, Schneider’s Realift Rod Pump Control is a breakthrough solution for the oil and gas industry that uses the predictive analytics capabilities of Microsoft AI and IoT services to assess the performance and maintenance needs of oil field equipment, even when it is miles underground. With Realift, engineers can pinpoint abnormalities and identify potential problems before they occur, reducing maintenance costs and downtime, improving worker safety, and increasing productivity.

We’ve also joined together to launch a new business accelerator program that will help promising start-ups use AI to transform the energy sector in Europe by decreasing consumption and increasing efficiency. At the Digital Innovation Summit, we were delighted to announce the first six companies that will participate in this new three-month program.

Ensuring that Technology Empowers Everyone

Of all the building blocks that are driving the current digital transformation, AI is the one that offers both the greatest commercial opportunities in today’s fast-changing economy and the greatest opportunities to address many of the world’s most difficult and pressing problems. But to realize the full potential of AI, we must recognize that we have a responsibility to ensure that technology empowers everyone.

This will take trust. Trust that technology creates equitable growth and economic opportunities. Trust that the benefits of the current digital technology transformation are available to all. Trust that AI solutions are human-centered, safe, and secure. The decisions we make now will define the future so we must start with principles that reflect deeply held ethics and values to guide the choices we make. At Microsoft, for example, our decisions are shaped by a set of six principles: safety and reliability, privacy and security, fairness, inclusiveness, transparency, and accountability.

Ultimately, how we move forward with the digital transformation of our economy is a shared responsibility that requires partnerships across industries. Working together – business leaders, policymakers, researchers, leaders from civil society, and concerned and interested citizens – we can achieve great things and shape a better future for everyone. The opportunity is ours to create.