People and how you work are the real keys to digital transformation
Updated: May 20, 2021
Digitizing is so much more than introducing new technology. It is about putting people at the very center; about creating a culture to take full advantage of technology, and about creating real business value.
Many business leaders have recently gained a more realistic view of digital transformation. They are beginning to realize that the answer is not just better technology, but it is about everything around technology and what we can do with the technology we invest in. Unfortunately, many organizations still lack a cohesive strategy, which instead of focusing solely on technology, also starts with the people in the organization, the organization's culture and its working methods to move the organization forward.
Many organizations lack a coherent strategy for their digital transformation
According to the Harvard Business Review, organizations that focus on cultural transformation are more than twice as successful when looking at operational capability, competitiveness and the ability to retain their customers. But at the same time, they see that the challenge of transforming a culture is much more complex than previously understood.
Digital transformation is first and foremost about people, the dynamics of the organization and how people work. Just focusing on choosing and implementing the "right" technology will never be successful, neither in the short or long term.
Digital transformation is not just the job of the IT department; it requires redefining how to use technology to drive business results, which is a matter for the entire organization.
The best way to respond to digital disruption is by changing the culture to become more purpose-driven, customer-centric, agile, cooperative, risk-tolerant, and experimental. Everyone in the organization (and outside the organization) needs to understand what value the organization intends to deliver (i.e., the organization's purpose). With a clear purpose we can create meaning and commitment among our employees, and also help people to make the “right” decisions. We need to focus on our customers (and the value we intend to deliver) in everything we do and also invite the customer to participate in the business and product development at an early stage. At the same time, we must become more mobile and fast-footed, better at collaborating inside and outside the organization, and brave enough to try and experiment, and to learn from our mistakes. Of course, we also need to develop the organization's digital maturity, i.e., the ability to take advantage of opportunities offered by new technology.
In the end, the goal is not to become a digital company for its own sake, but to help create an organization that can operate sustainably and efficiently in the ever-changing future of work.
Every organization must find and understand its "digital DNA" in order to stop "doing digital" and instead start "being digital”.
A critical mistake that is often made is designating digital transformation as a program or project, rather than an ongoing top-down and bottom-up journey. As we mentioned earlier, this isn't just about the adoption of a new technology; it is about organizing, operating and behaving effectively in this new world of work.
Only by fundamentally changing the way the organization works - by flattening out hierarchies, pushing out and speeding up decision-making, helping employees develop the necessary abilities and skills, and successfully understanding both the opportunities and threats posed by the environment – can an organization truly adapt to a digital world. Organizations simply need to become more innovative and entrepreneurial.
The true challenge of digital disruption facing organizations comes from people, not technology.
Digital transformation can't just be a top-down mandate to change. Instead, it involves creating the conditions in which existing employees start thinking and working differently, driving change from the bottom up as well. The organization needs to create new competencies and skills for competing in a digital world by empowering employees to think, learn and work differently.
How is digital business different?
- What is characteristic of an organization that has successfully adapted to the future?
Fast moving (speed, rate of change, adaptability)
The ability to quickly adapt and transform existing ways of working in order to meet changes from the outside world.
Growth Mindset (experimenting, learning, risk taking) Creativity, learning, experimentation and risk-taking characterize the organization's culture, both in the individual and the team.
COMMENT: You need to be aware and manage so-called competence traps that may exist at the individual level, especially in established companies. By competence traps, we mean employees who have succeeded using a particular way of working in the past, but may be reluctant to change those ways of working in the future.
Flexible and distributed workplace (collaboration, decision-making, transparency)
Organizational structure: the need for a flexible, distributed workplace: Collaboration within and outside the organization, how teams are organized and focus on the team instead of the individual. How decisions are made and that decisions are pushed out to where they belong in the organization. Leadership is open and transparent
Focus on value creation (value creation, purpose-driven) Focus on what value the organization delivers instead of efficiency and cost savings.
COMMENT: If an organization is really going to improve its performance, we need to stop focusing just on efficiency. The more it focuses on returns and cost efficiency, the more difficult it will be to succeed in the future. Instead, the organization needs to focus primarily on what value it delivers. This is a shift in mindset, i.e. to let go of the focus on efficiency and instead focus on delivering value.
Digitizing is so much more than acquiring and introducing new technology. It's about putting people at the very center; it's about creating a culture to take full advantage of technology and it's about creating real business value.