Most businesses, be they small or big have acknowledged the urgent need for organisations to adapt to the digital trends as they recognise that the alternative of not doing so would be to perish. As a result many of these organisations are developing strategies to take advantage of the potential of digital technologies to take their businesses to a new opportunity zone. Some of the businesses are focussed on building and enriching customer relationships with the help of new insights they are able to elicit with digital technologies as witnessed in the retail segment; those in the manufacturing and product development businesses are reengineering their processes to rethink supply chain, inventory management and after sale service to their customers on the strength of redefining their networks.
There are other businesses which are rethinking their business models as has been witnessed in the financial services sector, an example of which is the current debate about the future of the brick and mortar retail banking outlets and which of the current standard offerings would become extinct in the next few years. Each one of these strategies calls for taking certain risks and embarking on a bold, new, hitherto not treaded path. Hence it would be pertinent to consider the challenges that are likely to be faced and the leadership imperatives to be successful in the digital era.
While embarking on the journey of digital transformation, out of the various options of digital pathways available, the first decision point for leadership is to arrive at the key thrust area which would create distinctiveness in the marketplace and strengthen its market positioning. Related to this question is sizing up of the investment required for the change and justifying the investment in order to get a buy-in for the digital transformation proposition.
Reallocating the available resources and budgets to showcase proof of concept and its benefits would be a good way to test out initial hypothesis and that could help in finetuning the roadmap that could be rolled out. Further to the pilots, zeroing in on the areas of maximum impact resulting in either savings or expansion of business volumes as a result of the proposed investment would be essential to create ownership with all stakeholders of the transformation journey.
The proposed change and the objectives thereof need to be articulated as part of the vision for the digital transformation journey and all actions and further investments have to be centered around this vision. Translating vision into action is possible by nurturing a strong digital culture in the organisation. Imbibing digital culture relates to being harmonious with the use of digital technology in the daily routine. Coping and adapting to the change in processes or the redefined jobs, readiness to think digital and helping employees and other stakeholders envision the change would pave the way for embracing the digital culture. The fundamental change that digital era is bringing about is the need to work more and more collaboratively as opposed to working in functional silos. This calls for new organisational design thinking and also encouraging people to reach out to pockets of expertise inside and outside the organisation for superior output. This is a drastic departure for the existing work flow systems, the system of recognising individual contributions and performance management systems that organisations have been accustomed to for several decades and would be important to manage the transitions with sensitivity and through consensus building.
One significant advantage businesses have while making the transition is the fact that as consumers every business professional has been exposed to the evolving technology advancements in everyday life and experiencing the changes, particularly with reference to the advantages of collaboration that digital technology has to offer.
Businesses can take advantage of this positive experience and extend it to the corporate environment and help employees correlate their experiences as consumers to the transactions in the business world and the importance to adapt.
In the past when new technologies were introduced in the businesses, by and large, the framework of regulations and business conduct that organisations had to comply with, did not undergo significant changes. In the digital context, organisations deal with plethora of data from multiple sources which raise questions around ownership, confidentiality and Intellectual property rights on creation of new ideas/products. Hence one of the key challenges of doing business in the digital era is to rethink terms of employment and terms of engagement with customers and vendors thus ensuring fairness and integrity in transactions.
While the opportunities offered by going digital are immense and businesses may be ready to make the necessary
investments to reap the benefits, one of the key constraints is how to deal with the legacy systems and the limitations posed by them to access free flowing data critical to making real time impactful decisions. Since the digital technology advancements are impacting the customers faster than businesses are able to cope with, businesses have to deal with the myriad changes in customer expectations taking pace at a rapid pace and have to drive changes required to replace or modify legacy systems with swiftness as well as pick the relevant priority applications for replacement.
At the same time, the newly designed systems for doing business in the digital space would bring about further changes in the customer behaviour in the new connected world and organisations should be prepared internally to deal with the ongoing changes in customer behaviour. Therefore leadership success lies in not just the ability to paint the future but get the organisations to be prepared to develop resilience and speed in learning and adapting to the new expectations of the customers as well as to take advantage of the unexpected opportunities that may emanate from unknown quarters due to the tectonic shifts and the several moving parts of the connected world. The journey of digital transformation is indeed exciting—but the critical success factor lies in the quality of leadership and its ability to win over all its stakeholders to commit to the journey.
The writer is CEO, Global Talent Track, a corporate training solutions company