Digital transformation has become the new normal and is seemingly universal across organizations no matter of their size, structure or maturity. Most organizations are grappling with multiple transformations at one time.
However, digital transformations often wobble or fail completely. This is because there are three approaches that organizations tend to forget during these major transitions, and these are crucial to keep in mind when undergoing a digital transformation. The three areas are strategic alignment, agility and the important role of human resources.
To understand what is best for businesses undergoing transition, Digital Journal spoke with Janice Miller, Product Director, Leadership Programs, Corporate Learning at Harvard Business Publishing. The company was founded in 1994 as a not-for-profit, wholly owned subsidiary of Harvard University.
Digital Journal: Why do some businesses fail, or at least stutter, when it comes to digital transformation?
Janice Miller:Digital transformation journeys often fail due to lack of a clear transformation strategy: An organization’s approach to digital transformation needs to work across the board, at every department and level, within the company. Plus a lack of CEO sponsorship: It’s important that leadership within an organization spearheads a coherent strategy for digital transformation initiatives and continues to keep and communicate the vision relentlessly.
There’s also lack of focus: Organizations need to focus on seeing each single transformation through from beginning to end and not delving into too many transformations simultaneously. Plus, resistance to change: Employee buy-in is paramount in the digital transformation journey.
DJ: You’ve written about three key approaches that companies need to keep in mind. The first is strategic alignment. What do you mean by this?
Miller:Regardless of the nature and direction of a strategic change an organization wants to make, senior leaders throughout the organization must be aligned with it. In organizations that achieve alignment, senior leaders are accountable for helping execute the new strategy. They understand why the new strategy is needed, what changes will be required to execute it, and what benefits it will garner for the organization. What’s more, they know what they must do to put the strategy into action.
Strategic alignment delivers important advantages. Specifically, it helps organizations execute its strategy with speed, proficiency, and broad impact – so it doesn’t miss out on valuable opportunities or get blindsided by emerging threats. And in aligned organizations, the strategy is more likely to deliver anticipated results when they’re needed.
DJ: The second is agility. Please can you expand on this.
Miller:Organizations consider many definitions of the word agile: from agile methodology to agile principles that are prevalent in the organizational culture. Regardless of which context is used, it is clear that organizations are reshaping how they work to become more agile to both create and execute strategy. In a transformation, agility and speed are critical. If it takes several years for an organization to steer itself in a new direction, leaders will have to shift or adjust their approach to adapt to new market realities emerging in that time frame before they can fully implement the initial strategy.
At many organizations, there has been a shift from a formal three-to-five-year strategy statement to a high-level purpose statement that articulates “why we exist.” As a result, leaders must act as strategic thinkers who are more responsible for scanning, synthesizing, and adapting strategy in line with market trends. Better collaboration is needed to successfully execute an agile strategy. From agile teams working on new product development to strategic networks that require individuals to collaborate across the business, leaders today need stronger strategic networks and alliances internally and externally.
DJ: With the third approach you mention the critical role of human resources. Why is this?
Miller:HR – or more specifically, L&D – plays a critical role in the business and has a strategic seat at the table to influence organizational strategy, culture, capabilities and agility. L&D leaders today are driving transformation by creating leadership alignment by coaching executives to share authentic, compelling stories more often; encouraging leaders to become teachers and lead by example; developing new capabilities for emerging business trends, from personal adaptability and resilience to a growth mindset and commercial acumen; and moving away from detailed competencies and job descriptions to create flexibility for innovation outside of formal roles
DJ: Is culture related to this?
Miller:Yes, culture is certainly related to digital transformation because it impacts the speed at which this approach occurs. Digital transformation also presents the opportunity for organizations to change the culture and adapt new ideas and approaches.
Creating a work culture that supports the change can help to alleviate some of the obstacles companies often encounter in a strong, shared sense of purpose vs. weak, inconsistent sense of purpose; freedom to experiment vs. absolute compliance to rules and processes; distributed decision-making vs. centralize, hierarchical decision-making; and being open to the influence of the external world vs. highly internally-focused.
DJ: How else can businesses realize their organizational capabilities?
Miller:Businesses must focus on the top three to five capabilities essential for the organization’s near-term and future success, instead of using the massive, more static type of competency model that is common today. These capabilities should be reevaluated each year to ensure they align with new business initiatives to improve organizational performance.
In a follow-up interview, Janice Miller discusses why leadership matters for digital transformation. See: “Q&A: Why leadership matters for digital transformation.”
