“Digital Transformation is not about Technology” is the headline of a recently-published Harvard Business Review paper (published on hbr.org; 13 March 2019). When we consider that 70% of all digital transformation initiatives do not reach their goals, this means that we are burning $900 billion out of the $1.3 trillion we are investing in digital initiatives during the last year. Behnam Tabrizi was looking at the inside of these digital change processes. Tabrizi is teaching Transformational Leadership at Stanford University’s Department of Management Science and Engineering. He is without any doubt a leading expert on organisational and leadership transformation. Tabrizi’s conclusion on successful digitalisation processes is that, for these organisations, it worked because their leaders went back to the fundamentals: “They focused on changing the mind-set of theirs members as well as the organisational culture and processes before they decided what digital tools to use and how to use them”.
If we are honest, we all do not really know what digitalisation will mean for us. Once a Bank Manager said in a discussion about the digitalisation in the banking segment that all that we know at the moment is the taste of the appetiser; we only have some idea about the rest of the menu. I would say that meanwhile we smell the soup and we wrongly believe that we know what we need to do. As stated above, digital transformation is not about technology. In many discussions about digitalisation, I recognise that we are talking about the IT strategy. Instead, we need to understand that digital transformation is a simple change management process – just triggered from a technological side. But, as in all change management processes, we better look at the people side. It is imperative: It’s all about people, the rest is technology.
Behnam Tabrizi has stated five lessons about successful digitalisation processes. Let’s start with Number 1: “Figure out your business strategy before you invest in anything”. Digitalisation is not the end in and of itself. Through digitalisation, we aim to enhance our organisational performance through the use of technology. Tabrizi said that “digital transformation should be guided by the Boarder business strategy”. It is always essential to understand the whyof the transformation and this is a purely strategic discussion. When I recently hosted a management workshop on the defining of the digitalisation strategy in the health care segment, we recognised how difficult it is to identify the reason for the transformation. If we do not know the why, how can we then define the how(methods) and set the what(task level)? Every task we perform has to have a link to our why; meaning that we need to be aware of what contribution the task has to fulfil the why.
Organizations that seek transformations (digital and otherwise) frequently bring in an army of outside Consultants who tend to apply one-size-fits-all solutions. Thus, Behnam Tabrizi’s Lesson Number 2 was: “Leverage insiders”. When I support such processes in the health care segment as mentioned above, my intention is to empower the people internally to lead the process – the staff members who have intimate knowledge of what works and who know the organisation much better than I ever could.
Lesson 3 was defined by Behnam Tabrizi as: “Design the customer experience from the outside-in”. I completely agree with this expectation regarding the customer experience. But once you have a clear understanding of their expectation, design your transformation processes from the inside-out. To respond to customer requests is a critical success factor, but, at the end of the day, the people internally have to drive the change and this brings us to Lesson 4: “Recognise employees’ fears of being replaced” – especially if digital transformation processes turn out to be ineffective because we simply ignore their fears. Digitalisation will automate business processes which are today managed by human individuals – that’s a fact. But Tabrizi mentioned that “a digital transformation process is an opportunity for employees to upgrade their expertise to suit the marketplace of the future” – thus, we have to work at this in the future together with our people affected by the digitalisation processes.
Lesson 5 stated: “Bring a Silicon Valley start-up culture inside.” The way to an effective use of digitalisation goes only along the innovation path. We therefore have a need to increase agility. We have to speed up the learning processes and adjust quickly to the outside during these change management processes because so many digital technologies can be customised. And it goes without saying (because we have discussed this already several times) that this requires a new type of leadership. Digital transformation has worked for organisations because their leaders have gone back to the fundamentals. As Behnam Tabrizi said, “They focused on changing the mind-set of their members as well as the organisational culture and processes before they decide what digital tools to use and how to use them.” Living in the Digitalisation Transformation Era is extremely exciting for us, but, also being a leader in a business organisation means that I have to work on myself. Digitalisation is therefore much more than just applying IT: It means indeed changing our operating system, but ultimately also changing ourselves. Therefore: Let’s talk about digitalisation and let’s do it as well!
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