Digital transformation is fundamentally a leadership challenge

4 Jul 2022

George Westerman. Image: IMI

David Larkin reflects on his learnings from a George Westerman masterclass in achieving digital mastery.

Digital transformation remains a fascination in the collective consciousness of the business world. As the pace of technological progress rapidly increases, organisations have realised that being digital-ready is not just a ‘nice to have’ element of their fundamental structure, but rather an essential pillar around which the business must be built.

Business leaders had the opportunity to reflect upon their current digital transformation strategies at a recent masterclass event at the Irish Management Institute, hosted by George Westerman. A senior lecturer at the MIT Sloan School of Management, Westerman and his colleagues have researched digital transformation for 12 years and have produced pioneering research along the way.

Business leaders who attended the event walked away with numerous key insights, preparing them to reframe their challenges and reflect on how best to deal with them moving forward.

Think again about digital

Westerman emphasised that the trajectory of technological advancement has followed Moore’s Law, which states that digital technology tends to double in performance every 18 to 24 months. As this is an exponential process, our brains struggle to grapple with it and the enormity of the associated challenges.

Nevertheless, he argued, the business community must think differently about its relationship with technology and conduct experiments to provide more optionality for the future. The MIT research revealed that digital is not the problem at all; transformation is.

He pointed out that the First Law of Digital Innovation states that technology changes quickly, but organisations change much more slowly. In that sense, he added, this is not a technical challenge, but a leadership one.

Digital mastery is about trial and error

The work that George and his colleagues carried out showed that very few organisations were consistently hitting the mark in terms of what he calls ‘digital mastery’. Many companies included in the research were implementing innovation initiatives rapidly – and often successfully – but there was not an integrated approach to fundamentally change the experience of the business.

Others, he said, were overly cautious and were limiting their progress as innovation was stalled over concerns of capital. There were other companies that simply had not put a roadmap in place yet, putting them behind the curve in the technological sweepstakes.

What the digital masters did differently, he explained, was innovate and integrate their processes, creating an iterative and sustainable feedback loop of trial and error. If something didn’t work, there were no alarm bells ringing. These companies were willing to fail fast and learn fast from their experiments, refining the process throughout.

The digital masters not only put a more coherent digital infrastructure in place; they were also able to convert this into value-adding opportunities to the business’ bottom line.

20-20 vision

If your business doesn’t have a clear vision of its future direction of travel, Westerman said, it will be doomed to repeat the same mistakes again.

What is needed, he explained, is not a prescriptive and concrete vision, but simply an achievable final product that an organisation can aspire towards.

A strong vision that evolves and is tied to the customer is a huge step towards successful digital transformation, Westerman said.

Improve in the right way

The research conducted at MIT also identified multiple opportunities in the digital transformation space. One that particularly stood out was the customer experience, whereby digital tools can instantly solve problems and deal with client concerns.

Westerman challenged the business leaders at the masterclass to identify the ‘low-hanging fruit’ in their organisations. That is, areas where introducing digital enhancements could rapidly transform the company’s offering for the better.

Build it up from a firm foundation

Without a solid platform of systems and processes, a digital transformation project will stall quickly, Westerman said.

He explained that, for many organisations, unfortunately, no such platform exists. For many, each department has its own way of doing things, a legacy problem from when the technology was originally put in place.

The problem, he explained, is that a disconnected jumble of processes leads to major connectivity problems. If one side of the business can’t talk to another from a digital perspective, chaos ensues. George noted that by revamping a business’ systems and processes and building them in a structured, clearly defined way, the digital transformation journey becomes much smoother.

To become a fast-moving culture based on integrity, Westerman concluded, businesses must be willing to build new things, preserve the elements of change that deliver most value, reorient based on customer and client feedback, and be more flexible in their approach.

Companies don’t need a digital strategy, he said. What they need are the capabilities for digital to thrive within the business, which powers the strategy.

By David Larkin

David Larkin is content, brand and PR manager for the Irish Management Institute (IMI). The recent event featuring George Westerman was part of IMI’s masterclass series, which  is delivered in partnership with Mason, Hayes and Curran.

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