Leading And Organising For Digital Transformation Success
The following draws upon the work of several thought leaders/experts in their field including James Macaulay, Frank Mattes and Lee Bryant. The purpose is to share with you some insights into how to lead and organise for successful digital transformation.
Digital transformation is a challenge of scale and complexity and according to IMD, 95% of transformations fail. The same is true for large scale innovation efforts, with Frank Mattes author of Scaling Up citing the economic cost of the problem globally equivalent to that of the GDP of Germany.
Research conducted by IMD Business School found the biggest reason for the failure of transformation efforts is that frequently they are fragmented and pursued in a very silo’d approach. Leaders and managers are often well aware of the opportunities and threats of digitisation and work hard to incorporate new technologies, AI and automation within their functions but without a coordinated and synchronised approach, these initiatives are tactical in their impact and do little to create a competitive advantage.
“True digital transformation meaning changing your business model, your strategy, how you create value for your customers. How you go to market, how you make money, how you leverage the talent in your organization. These big fundamental changes – that’s what we think of as digital transformation.” – James Macaulay
Even functional leaders who understand the strategic importance of digital transformation come up against barriers intrinsic to the organisational design. As Lee Bryant notes in his article: “I almost never come across a group of senior leaders that is not passionate about digital transformation, change and leaving behind a better organisation than the one they inherited. But I also never come across a group who feel they have the agency and the freedom to do it, except in situations of crisis.”
Organisations today often find themselves too large, too complex with layers of process and procedure, the way we’ve always done things engrained, calcified (Lee Bryant) and almost impossible to change at scale. Exactly how the business operates, its reason for being and importantly its core strategy, how it creates and sustains value better than the competition is no longer clear.
Digitisation and an environment of exponential change lays bare the inflexibility of monolithic organisations that are no longer fit for purpose. Yet they must redefine their strategy, adopt new ways of working right across the organisation at a pace that few could have envisioned in the past.
It’s clear from the above that digital transformation requires fundamental changes that will affect the whole organisation across functions, departments and hierarchies. It is the most complex of change initiatives that don’t have a beginning and an end in the typical linear sense of change initiatives, rather it is an all-encompassing overhaul from within, impacting the entire business.
James Macaulay co-author of Digital Vortex and Orchestrating Digital Transformation recommends that successful digital transformation starts at the absolute top.
