How Digital Transformation Can Affect Leadership Strategies
Tags: Leadership, Digital Transformation, Project Management, Industrial Digitalization, Leadership Strategies

The benefits and advantages of digital transformation are many; hence, the large number of companies are now opting for such a revolution. However, it would be prudent to say that some of these companies experience difficulties developing a strong-hold during the transition period.

As such, you need to come up with ways to overcome such challenges and also to have the right methods of implementing digital transformation strategies. So, what impacts does the digital transformation have on leadership strategies? We find the answer to this and more in this post.

In today’s world, it is no brainer that advanced technology solutions enable companies to achieve and maintain a competitive advantage in their industry. By leveraging the available tools, one can increase staff productivity while still decreasing operational costs. This means that your business enjoys a higher operating capacity while delivering an exceptional customer experience.

There are many ways to go about digital transformation. Still, the effective use of the latest digital solutions such as mobile, social, cloud, and analytics, which can help fast-track your business success, is the best bet.

Regardless of the sector, you operate in; there are many technological solutions that you can take advantage of to make work (and life) easier — by increasing operational efficiency. Before delving deeper in understanding how digital transformation can affect leadership strategies, it would be a good idea to first understand what this entire concept entails.

What exactly is digital transformation?

In layman’s terms, digital transformation is the integration of new digital trends into existing business strategies, impacting how it operates and how it adds value to its clients. Such a shift brings about change within the organization, as it works to challenge the company’s status quo and bring new ideas on board.

The business community has not seen a more powerful impact on human behavior than the effects of digital transformation. The shift has brought about a significant change in leadership roles and responsibilities, no matter what field one works in.

Digital transformation has also brought forth numerous changes in leadership development, including the ways of thinking, how to look at innovation using a fresher perspective, and how to make the most out of technology to boost business operations.

Integrating digital transformation in an organization could be focused on transforming the core of the business — changing the traditional ways of doing things, or it could be operational — improving the way things are done to get faster results and cheaper costs.

A key thing here is that before a business can successfully undergo digital transformation, its culture needs to evolve. The employees ought to have the right mindset and skills necessary to drive digital innovation to success. If you’re the leader, you need to ensure that there is a clear strategy on how to develop and implement the new structures.

You may need to get all the support you can, more so from the tech-savvy people, who understand in general the need for digital transformation and can assist in championing for change across the organization.

The digital transformation approach requires a closer look at various aspects of businesses such as:

Customer experience

Operational agility

Culture and leadership

Workforce enablement

Digital technology integration

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The impact of digitalization on businesses

The impact of digital transformation on your organization vary, but will often lead to the following benefits of digitization:

Increased revenue — the main aim of digitizing operations is to increase revenue while reducing human labor. Digital transformation creates avenues that businesses can use to increase their revenue turnover. For instance, if the business was using manual strategies to work on claims, they can triple the number of orders made when using a digitized platform.

the main aim of digitizing operations is to increase revenue while reducing human labor. Digital transformation creates avenues that businesses can use to increase their revenue turnover. For instance, if the business was using manual strategies to work on claims, they can triple the number of orders made when using a digitized platform. Effective communication — one of the main hindrances toward business success is poor communication. However, the digital transformation has brought about various, and more effective, channels of communication and collaboration that makes work easier.

one of the main hindrances toward business success is poor communication. However, the digital transformation has brought about various, and more effective, channels of communication and collaboration that makes work easier. Decreased operating costs — once you embrace digital trends, you will enjoy lower operational costs. This is because you can get one system that perfectly handles the work that was previously done by more than two individuals while taking a longer time.

once you embrace digital trends, you will enjoy lower operational costs. This is because you can get one system that perfectly handles the work that was previously done by more than two individuals while taking a longer time. Improved customer satisfaction — digital innovations have made it easier for businesses and manufacturers to know what exactly their customer base wants and incorporate their ideas when creating products or services. This improves the customer satisfaction rate, unlike before, when there were no mechanisms to evaluate how satisfied the customers were towards a service or product.

digital innovations have made it easier for businesses and manufacturers to know what exactly their customer base wants and incorporate their ideas when creating products or services. This improves the customer satisfaction rate, unlike before, when there were no mechanisms to evaluate how satisfied the customers were towards a service or product. Optimized operations — you get to only focus your energy and resources towards processes that only bring better results and greater customer satisfaction.

you get to only focus your energy and resources towards processes that only bring better results and greater customer satisfaction. Droves of data — digitizing your business operations makes it easy to obtain and store valuable customer information that will help you in improving your business model.

The 4 main types of digital transformation on a business

There are many opportunities created by newer technologies every other day. However, organizations that do not recognize and pursue transformation in a multi-dimensional way will find themselves lagging behind and missing out on the opportunities available.

There are four main types of digital transformation that you may consider:

Business process

A business process covers the major aspects of your business operations, from the people, processes, and the applications used. In this context, transforming business processes into a digitalized mode means that you use technology to leverage the skills, opportunities, and successes of the team.

2. Business model

Source: Wikipedia.org

Transforming a business model means integrating current techniques with technology to enable it to improve on the customer experience and to drive in more revenue. This is a better approach, instead of just implementing the new technologies for the sake of it. Transforming a business model looks at the infinite possibilities you can turn to. For instance, you can see how Netflix transformed into the streaming service we know of today, from a mailbox DVD business.

3. Domain

A business domain transformation occurs when one business wishes to involve itself in another field of work without completely neglecting its primary role. Take an example of Amazon. The company decided to slide into the streaming business by creating its own streaming platform (Amazon Prime) and AWS (Amazon Web Services), which has now become one of the largest cloud computing services.

When you look at it, both of these domains were formerly dominated by other companies. However, thanks to the great financial backing that Amazon had, it was able to make a huge headway when joining these new domains.

4. Cultural & organizational

Different organizations use different approaches to situations. However, to get everyone on the same page as you, you ought to embrace change, even though the road to achieve it might get challenging. If your brand delivers a better outcome to customers, then the transition becomes worth it.

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The reinvention of the ‘people’ part in digital transformation

The people or customer aspect of digital transformation is as important as the processes and technologies involved. A big part in the development of an organization lies in the measures put in place to boost customer-employee relations and what has been put in place in terms of learning and personal development.

In the digital era, company executives are facing pressure to improve learning opportunities and to empower their employees. According to a recent study, 72% of HR and Learning & Development professionals believe that employee development is a vital consideration for the success of the business.

So how do organizational leaders drive the ‘people’ aspect in digital transformation? In this next segment, we will explore the three elements that’ll answer the question: through the mindset, skills, and toolset.

Mindset

According to recent research by McKinsey, 84% of CEOs get committed to transformational change, while only 45% of frontline employees from a larger company find it challenging. There are two directions you can use to solve this conundrum:

Communication

Empowerment

Communication

Effective communication is one of the main factors to consider for a company to succeed. If senior company executives communicate more effectively with all employees, they are eight times more likely to achieve transformational success, unlike those that do not employ it. Some of the things to consider in terms of communication are:

Regular access to information

Visible engagement from senior management

The leadership’s clear engagement with the transformation

Clear communication on the objectives of transformation

Digital technologies can be leveraged to engage organizational staff through dedicated channels such as change management apps, feedback tools, and social media platforms.

Empowerment

You may find that most senior organizational leaders understand their roles when it comes to the transformational process; however, other frontline employees might find it hard fitting in. Employee empowerment is the best way around this predicament as it not only engages them throughout the entire process but also allows them to see how it impacts the success of the company.

To pull this off, it would be prudent for the executives to involve the HR to help streamline this process. This is because they are better placed to understand the capabilities of each individual and where the skill gaps are.

Employee empowerment is a powerful tactic to build your business, as those that feel valued by their employers are more satisfied with their jobs — hence better productivity.

Skillset

The truth is, there aren’t enough people within a workforce with the right digital skills. There is still a substantial gap that needs to be filled. Still, as digital technologies continue evolving, the skills needed to harness such evolutions have to get boosted continuously. This will help filter the initiatives that work from those that don’t.

Toolset

People are different, and they also learn in different ways. Some of them still hold value for a classroom setting while others prefer to learn at their own pace through online courses and learning platforms.

With the recent developments in the field of digital technologies, professionals have turned to upskill through virtual & digital learning. As things get more demanding and every second that passes being too precious, people want to be able to learn at their own speed and get access to content whenever they wish.

Tips for digital transformation

Here are five steps that companies can follow to implement the digital change they desire successfully:

Align the objectives with business goals

The first thing to consider is the outcome that you wish to achieve not only for your business but also for your customers. Some industry leaders will tell you to identify the “why” and the “what” before launching any steps. This way, you’ll have defined what you need to do and why you need to do it, for you to achieve your ultimate goals.

To make work easier, you can opt to follow your customer journey map as a guide.

2. IT and business must co-create

The digital transformation of a business is highly dependent on how savvy the IT department of a company is. Apart from working only to fix broken services, the IT department needs to team up with other members of the company to solve problems and deliver value for their customers.

3. Embrace adaptive design

The days of having rigid key performance indicators are over. If businesses wish to succeed in their digital transformation, they ought to embrace adaptive designs. This enables them to make more regular tweaks to their transformational strategy, such as reallocating talent.

4. Adopt agile execution

The way to success is to encourage taking risks, even though you might fail. Employers need to encourage their employees to take reasonable risks by making certain decisions, and even though they might fail with the first try, they will always learn from their mistakes and come back stronger.

5. Courage

Being a change agent isn’t the easiest thing one can do. It is a personal experience and those that resist this transformation, can either passively or actively undermine the change.

The Bottom Line

With all this in mind, you could conclude that there is actually no ‘done’ in the digital world. New technologies and platforms are constantly emerging, and company executives must be prepared to continue exploring trends and best practices.

Digital transformations are lagging for many reasons, such as poor employee engagement, poor leadership, a disconnect between IT and the business, etc. Apart from reassessing talent strategies, leaders and tier organizations also need to look at other aspects such as role definition and retention to help the company through digital transformation.