Leading Digital Transformation

In the past articles we’ve concluded the first step of our journey, exploring why Digital Transformation is necessary, as well as its usual triggers:

• a lack of operational efficiency
• a need to power up or complement an existing value proposition
• a need to explore what’s beyond the business as usual

It’s impressive that we got here without a precise definition of Digital Transformation, but I believe definitions are of greater use after you get your hands “dirty”. The topic is a highly complex one, and I confess that I’ve looked into several definitions, but there was always something missing. As such, here goes my humble contribution…

Digital Transformation is a journey that aims to unlock an organization's full potential by deploying technology cross organization in a human centered approach. Technology capabilities, when applied through a human centered design lens, provide organizations the agility to rethink their strategic options, empower employees to become agents of change, foster closer relationships with customers and unlock new ways of working and collaboration.

Yes, technology has a central role as an enabler, but as all the tools its impact is about mastery. One has to deeply understand the ramifications of technology capabilities and elaborate a vision to its potential considering the organization industry and culture. The key word here is culture.

An organization’s full potential is reached when each employee reaches its full potential. By full potential we mean that time is applied in collaborative problem solving and co-creation for new ways to delight customers. Technology is meant to be that assertive silent partner that provides the tools, data and automations, leaving humans to do what they do best.

Digital Transformation forces a paradigm shift.?

We have not reached the singularity moment where AI surpasses humans, but rather a realization that we can move away from the Taylorism mindset. Through Digital Transformation employees are expected to no longer be a cog in a bigger machine, but rather a creative and problem solving force to be reckoned with.?

This paradigm shift deeply affects organizations and employees, from top to bottom. Leading, managing and operating has been changing radically through the last 20 years. Linda A. Hill (Wallace Brett Donham Professor of Business Administration and faculty chair of the Leadership Initiative at Harvard Business School) and her team did terrific research and surveyed over 1,500 senior executives from more than 90 countries. Here are a few insights uncovered about the paradigm shift forced by Digital Transformation:?

• 97% respondents “agreed” or “strongly agreed” that organizations will not remain competitive unless they radically adapt to the demands of the digital era
• 60% respondents whose organizations have been on the digital transformation journey for 1-5 years
• 47% respondents believe their organizations have the right talent to compete in the digital era.

Linda goes further, stating that “Companies trying to digitally transform must change employees’ hearts (why they do their work), heads (how they see their work), and hands (how they do their work). It is no wonder leaders and employees often feel overwhelmed by the adaptations required of them individually and collectively in the digital age.”

The implications of Digital Transformation to people, organizations and society are immense and it is required that leaders emerge to deal with this change. Bear in mind the word “leaders” is being used carefully, as...

?“leadership is about coping with change, whereas management is about coping with complexity”. One cannot manage through Digital Transformation.

The only way to lead and navigate through these troubling times is to ensure that there is a guiding vision within the organization. In theory, strategies and operations are developed to help organizations reach/deliver a defined vision, but in practice most legacy organizations do not have a clear vision. Unfortunately, these statements were often created only to be stored away in an intranet forgotten page or the “about us” section in corporate websites.?

While the world is changing, a vision is an immovable target. The more clear the target, the better. Strategies will be tweaked as external and internal conditions (opportunities, threats, strengths and weaknesses) change, tools will also change as technology capabilities evolve at an exponential pace. What is left is the realization that we are working towards a shared vision.

A framework to help us navigate towards a shared vision

Assuming your organization has a vision/ mission or something close to that, the question that remains is how can we engage the organization and lead through these troubled times.

“One of the perennial puzzles in business is how established companies can maintain their core while simultaneously pursuing new growth”. This sentence by Clayton Christensen is on the back of a book that has shaped how I lead Digital Transformation, the book is “Lead and Disrupt” by Charles A. O’Reilly III and Michael L. Tushman.

“Lead and disrupt” introduced to me the concept of ambidextrous organizations that are able to balance two very different operating models: Exploit and Explore. Let me explain:

• Exploit - this engine has brought the organization to this day and sustains the business as usual. This operation is optimized to avoid risk and ensure short term growth;
• Explore - this engine aims to guarantee that the business is testing risky ideas, be it new business models, products/ services, technologies, operational tools or processes changes. This operation is optimized to accept risk, mitigating it while maximizing growth and impact for the organization in the long term.

I have been making efforts to implement this framework and from my experience I believe the Explore engine is the right way to frame the work of a Digital Transformation team. This engine:

• Is aligned with the corporate mission
• Is part of the organization, not a new department with the “cool kids”
• Has a clear purpose to help the organization improve the business as usual (strategy & operations)
• Has a strategic position and human centered design at heart, enabling cross organizational journeys and blueprints (it’s a silo destroyer)

Implementing the Exploit and Explore framework requires an acknowledgment from every employee that change, brought by Digital Transformation, is now part of the daily life. What sets this framework apart from many others around innovation or change is the fact that it enforces the recognition of the business as usual (exploit), and the need to handle change at a strategic level (explore). Traditional innovation is often pushed within silos or sponsored with a specific goal in mind, which often fails due to internal power struggles, prioritization or objective misalignment.

To wrap it up, technology is opening new doors and the rhythm of change is only going to increase. Digital Transformation is forcing a paradigm shift and leaders across the world recognize both the shift and the struggle to manage organizations. Leading with a vision is the only way to guarantee that your organization will be future ready. Regardless of the current “Business as Usual”, organizations need to become ambidextrous, making sure to be exploiting and exploring along the way. Exploration must happen on a strategic level and with human centered design at heart.