Business Transformation Requires Transformational Leaders

Beyond buzzwords, what we are seeing is a seismic shift in the role of technology in organizations. Technology is more and more embedded in everything we do as we move into an increasingly hyper-connected digital world, a world in which technology is driving significant social, organizational, and industry change.

The discipline of business architecture, which sits between strategy and execution, interprets the strategy to identify tangible changes to the business and guide design that will realize the desired future.

Digital transformation leaders and enterprise architects have a choice to make in developing their digital backbone. The digital backbone can be an asset in ensuring that digital transformation efforts are carried out in such a way that they align to the enterprise and its approach to transformation. This Executive Update explores how it is essential to ensure that the methodologies, skills and talent, and technology tool chain and infrastructure are created in such a way that they can be easily consumed and adjusted as the company changes.

The following is a “Tale of Three Companies” in which I had personal experience leading/managing their outsourcing efforts at some level. In this tale, I offer an overview of key areas and some observations concerning those three experiences and then provide a brief conclusion.

It is evident that traditional process- and workflow-oriented leadership styles are not enough to make organizations successful in their digital transformation journey. Digital leaders should have an entrepreneurial mindset, believe in collaboration, and exhibit the qualities of an adventurer. Below are the key differentiating qualities that digital leadership should have to carry out digital transformation and operations successfully.

Organizational change management is about changing the way that people think and behave — in that order. Unfortunately, change management programs that are begun after the digital transformation has been designed focus primarily on behavioral change. They neglect to engage people in changing their mindset and way of thinking. Any behavioral change that is not preceded by a change in thinking will not last. As soon as the pressure is off, as soon as managers turn their backs, people will revert to the way they’ve always done things. And the way they’ve always done things is ­continually reinforced by the organizational culture.

This Executive Update describes six leadership strategies essential to successful Lean-Agile transformation, together with one bonus strategy (the “+1”). All seven strategies describe patterns observed across a range of organizations in the public and private sectors. They and their accompanying pitfalls highlight the need for a number of specific leadership behaviors.

This wave of digitization is fundamentally rewriting the rules of competition across industries: the charac­teristics that made firms successful in the past are not the same characteristics that distinguish winners from losers in the digital era. One of these fundamental changes is the steadily increasing importance of innovation and continuous improvement. Research shows that the more digital an industry becomes, the more rapid the speed of change in the industry. There is no such thing as a sustained competitive advantage in the digital era. However, digitization does not only create challenges for actors in affected industries. Digitization in itself also provides the keys to tackling the changing competitive dynamics. Because most firms still do not leverage the opportunities, the quickest ones to learn how to exploit them will be the ones that come out on top.