AMPLIFY  VOL. 37, NO. 12
  

Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how it creates and delivers value to customers while realizing internal operational benefits. And yet, only one in three digital transformations succeed.^1,2

Where many organizations and leaders fail is in the implementation. The strategy could be rock-solid, but without a mindset shift that ensures the organization and its people are evolving at the same rate — bought in and committed to being part of the solution—execution often just fizzles out. Obviously, this is a serious problem for companies hoping to thrive in the fast-changing era leading up to 2030.

As “The Digital Leadership Specialists,” Robin Speculand and I surveyed 2,138 leaders across four continents and 18 countries. Our research paper “The Digital Leadership Perspective 2024” identified a significant gap between the perceptions of the board/senior leaders and the rest of the organization regarding digital transformation progress.³ We call this “digital detachment.”

Despite the unfortunate prevalence of digital detachment, digital transformation has created successes and efficiencies for many organizations. Our research found that:

• Many organizations are on the right track. There is progress in digital transformation in organizations around the world.

• More leaders are digitally confident. Almost two out of three of the leaders we interviewed said they believe they can guide their organization through its digital transformation.

• New measures are being adopted. Leaders recognize the importance of creating measures to precisely track digital transformation value.

For others, digital detachment is an issue, alongside three other factors:

1. Senior leaders tend to overestimate the state of their organization’s transformation.

2. Many leaders are not starting and ending their digital transformation with the customer in mind. In fact, our research shows that their focus remains predominantly on internal efficiency.

3. Senior leaders do not clearly understand why the organization is transforming — a critical stumbling block. Having a clear purpose for digital transformation (i.e., a digital ambition) helps companies start their shift with the end in mind.

Case Study: Customer Focus & Digital Ambition

Singapore’s DBS Bank states its digital ambition as “Make Banking Joyful.” The bank’s leaders recognized that no one wakes up on a Monday morning wanting to do banking and that it is a painful experience.⁴ This led to a strategy that leverages technology to make the bank “invisible” to its customers and, thus, makes banking joyful.

Implementing this strategy transformed DBS and resulted in it being named the best bank in the world for five consecutive years. Internally, it inspired employees to take consistent, purposeful actions that enhanced customer experiences. They became “customer-obsessed,” identified the jobs to be done, participated in hackathons, and then leveraged technology to make banking invisible.

DBS CEO Piyush Gupta explained that the bank’s philosophy is customer-employee performance. A passionate focus on putting the customer first gives employees purpose, which leads to them delivering the best possible products and services.

Other Survey Findings

Additional insights uncovered by our research include:

• Digital is not being used for the good of the customer. Despite the importance of placing the customer at the center of digital transformation, an alarming number (half) of respondents do not believe their digital transformation improves the customer experience. Leveraging digital for the good of the customer remains a huge opportunity representing immediate competitive advantage for leaders with the courage and tenacity to transform their organization around their customers (an outside-in approach rather than an inside-out one).

• Leaders are not effectively leveraging data. Our research found that 60% of leaders are struggling to become data-driven and use data to make more effective and impactful decisions. Our previous research in 2019 found that 70% of leaders were not leveraging data at any level to inform more rapid decisions. This includes a lack of progress around data visualization, data analytics skills building, and the need to ensure the used data is current, cleansed, and value-adding.

• There’s a lack of cultural alignment. Organizational culture-building continues to be a missed opportunity when considering successful digital transformation. Only one in two leaders believe their culture underpins their transformation, and this alignment lack holds back many organizations. Our 2019 research found that one of the top three reasons that two out of three organizations fail in their transitions is that they have not changed their culture. Five years later, this has become an even more urgent need.

• Acknowledgment needs to convert into leadership action. Just over 70% of leaders recognize that digital transformation is a top concern. They understand there’s a pressing need to become deeply data-driven, including putting in place measures to track progress daily. This reinforces the point that leadership must move from focusing on what needs to be done to how to implement and track while ensuring customers and employees are on board.

Moving from Digital Detachment to Digital Determination

Given all these moving parts, it is easy to see how leaders can become detached. Transformation can be overwhelming, especially for those in lagging industries, leading to denial, immobilization, and frustration (the classic change curve). Unfortunately, in this speed-as-a-competitive-advantage era, procrastination is a fast route to short-termism, knee-jerk reactivity, and failure.

Thus, the question boards and C-suite executives must answer is not “What can digital transformation do for our organization?” but “What is our strategy to meet and exceed customers’ needs and expectations in a digital world, and how do we execute it successfully?”

Digital transformation involves much more than just technology, and this is where many companies and leaders are going wrong. Digital transformation is a cultural change, a way of working that requires organizations to continually challenge the status quo, experiment, and get comfortable with setbacks — learn, adapt, and go again.

Antony Edwards, COO of software testing and monitoring company Eggplant, gets to the heart of it:

Too many people treat digital transformation as something around infrastructure and IT. It’s not; it’s about the company culture, it’s about DNA, and it’s about business models. And if you don’t approach it from that kind of business and customer perspective, it’s going to fail.⁵

Businesses that don’t look holistically at the business model transformation at hand can end up investing in the wrong technology and/or doubling down in the wrong areas. This results in the rest of the organization being pressured to recoup costs. When employees are starved of the resources required to service customers effectively, they become frustrated and question the capability of their leadership. In a world where employee choice is more powerful than ever, this is a dangerous moment for boards and leaders still trying to figure things out.

Today’s leaders face a broader set of transformational challenges than during previous industrial revolutions. Industry 4.0 has three core shifts: digital, workforce, and “leadershift” itself. Leadershift refers to new capabilities that boards and executives must cultivate, adopt, and practice in a digital world. In many ways, leaders have the steepest learning curve of all and can easily become overwhelmed and immobilized by the sheer breadth of the tasks at hand.

Accelerating Progress

We know something is not working. It’s a combination of leadership mindset, implementation orientation, and culture building at the same rate as business model transformation. It’s a people play as much as it is executing on technology and technology ecosystems that enable great customer and employee experiences.

In addition, organizations with poor data and data analytics, legacy technology architecture, and increasing tech debt are increasingly immobilized, as they simply don’t know where to turn and what to tackle first. Building out a short- to medium-term roadmap to bring everything together is the first important step in helping to visualize the scope, scale, and journey required for leaders, boards, and the rest of the organization.

And then, with the question having shifted from “what we need to do” to “how to execute successfully,” leaders and their teams need a way to start. We suggest a compelling digital ambition. For many lagging companies, especially those in lagging industries, a digital ambition is the key to a clear path forward and requires five crucial steps:

1. Identify your digital ambition. Understand what digital transformation means to your customers and articulate your transformation strategy in a way that helps customers buy into it. This will make it easier to bring employees on board.

2. Work from the inside out. Create the purpose that drives the transformation. Many organizations enter digital transformation with plans for productivity improvements, cost savings, and the like. This is an inside-out view that considers the impact on the customer second. An outside-in view is required if your digital transformation aims to provide the best customer journeys and experiences. Of course, when the voice of the customer is loud and clear, internal benefits will follow.

3. Cultivate a transformation culture. Ensure the culture is evolving at the same speed that your organization is transforming. This ensures alignment between the board/senior executives with leaders across the business, resulting in stronger engagement and mobilization of the entire organization in the implementation journey.

4. Leverage a data operating model. A solid data-operating model is critical for fast, considered decision-making across the organization. (Better data = better decisions = better performance.) For many organizations and leaders, this is a bigger job than expected: there is a need to review, qualify, and clean legacy data and understand which data will be of greatest value to customers and the business going forward (keeping the digital ambition in mind). Done well, it leads to better decision-making and speed of execution and links directly to performance and future growth (e.g., the ability to monetize data as a consulting-led revenue stream).

5. Move from awareness to action. Align the whole organization behind taking the right actions and clearly articulate the why, what, how, when, and what next. Use language that everyone (customers and employees) can get behind to engage and mobilize the entire company, not just the leadership team or a few project leads tasked with taking things forward.

These steps ensure everyone at the board and executive levels is on the same page, aligned behind a digital purpose and able to drive the right digital expenditures, investments, and implementation steps — with the rest of the organization engaged and mobilized for the journey.

Over the next five years, boards, leaders, and organizations struggling with transforming for a digital world must get fully in the game, moving from digital detachment to digital determination with a clear, forward-looking plan and commitment from all levels, to ensure their long-term viability and success.

References

¹ “BCG: Only 1 in 3 Digital Transformation Projects Are Successful.” Consultancy.com.au, 21 April 2021.

² Blain, Jeremy, and Robin Speculand. “The Digital Leadership 2024 Perspective.” Performance Works, 2024. 

³ Blain and Speculand (see 2).

⁴ Speculand, Robin. World’s Best Bank: A Strategic Guide to Digital Transformation. Bridges Business Consultancy International, 2021. 

⁵ Lawton, George, and Mekhala Roy. “11 Reasons Why Digital Transformations Fail, Explained by Pros.” TechTarget, 20 October 2023.