With so much literature and data supporting the need for digital transformation, it might seem like all modern companies are making the leap. Nothing could be further from the truth. Only 3 percent of CEOs say they’ve successfully completed digital transformations. Why? They might be standing in their own way.
All too often, the lack of digital adoption stems from lack of leadership — specifically a C-suite that hasn’t created a framework for success before and during a digital transformation.
Like any major cultural shift within a company, digital transformation is a top-down initiative, and without executive support and adoption, it will fail. CEOs and executive leadership play a critical role in digital transformation and should understand both why digital is important and how they can ensure its success.
Why Does Digital Transformation Matter?
Digital transformation is the application of digital tools to improve business operations, increase efficiencies and maximize revenue.
The term has largely been associated with sales and marketing, but true digital transformation — as the name suggests — changes a business at its core, impacting people, processes, technologies and even a company’s value proposition and value delivery.
Though the concept of digital transformation may seem new and emerging, nothing is further from the truth. As technology continues to evolve, those companies that aren’t abandoning analog practices are being outpaced by the competition, and quickly.
This lag between companies that adopt digital practices and those who get left in the dust can happen for a couple reasons, both of which are dependent on leadership; some executive teams are eschewing the idea of digital transformation entirely, stuck in traditional ways that won’t serve them in the end.
Other teams, however, have tried to implement a digital transformation and failed. To prepare for a successful digital transformation, companies should understand and proactively overcome the common obstacles that impede the process.
Challenges That Prevent Digital Transformation
The good news is the success of a digital transformation is largely dependent on the C-suite. That’s also the bad news; executive leadership teams who are likely already overworked must be committed to, and play a large, active role in, the process for it to work.
Unfortunately, too many teams aren’t up for the challenge. If they are — and they should be — those teams should work to overcome these four common challenges.
Lack of Understanding Digital
Some executive teams simply don’t understand how technology can improve their business. A general lack of understanding of automation, artificial intelligence, data analysis and other software capabilities can stand in the way of an entire company adopting a toolset.
This means it’s imperative that executive leadership is knowledgeable about technology, and if they aren’t, they seek out training or hire tech leadership to fill their knowledge gap.
Lack of Leadership Adoption
While some leadership teams don’t understand tech, others are simply slow or unwilling to use it. However, it’s this team’s vision that inspires a company to successfully transform digitally, and without their advocacy for, and utilization of, new digital practices, a company will never fully adopt.
Believing a Single Tool Will Solve All Problems
Digital transformation requires a company and all of its departments to adopt tools and software that will enhance their operations and the customer experience — and that task can take a lot of effort.
There’s no single magic tool that will instantly make a company digital. Rather, leadership teams should support a culture of experimentation that empowers the company to find the tech stack and process changes that are right for them.
Being Stuck in Traditional Ways
Digital transformation won’t last if it’s not supported by a culture that empowers it to succeed.
Some of the cultural values of businesses that successfully implement digital transformations include:
- Decentralizing decision-making
- Having a clear and shared vision for the future
- Promoting experimentation and innovation
- Supporting quick, agile work over thoughtful planning and research
For some companies, these values are far from what’s currently supported by their traditional culture — which is why the C-suite is so critical in adoption.
Committing to a digital transformation requires a company-wide shift toward a culture that supports these values, and that change has to be led by the CEO and his or her executive team.
The Path to Digital Maturity
Just because a company has initiated a digital transformation doesn’t mean it’s reached its digital peak. There are multiple levels of digital maturity within an enterprise ecosystem. As one would guess at this point, the more advanced the stage, the more support is needed from the company’s CEO.
1. Transform your department: As an initial step, a single executive can establish new digital procedures to improve one area of the business. While the CEO should support this process, it can be championed by anyone in the C-suite, which is why it’s a natural first step toward digital maturity.
2. Transform your business: The second step to digital maturity is for an entire business to harness digital capabilities to improve the holistic customer experience. This involves a core culture shift, which must be championed by the CEO.
3. Transform your market: The most advanced companies leverage digital transformation to deliver more customer value in better and different avenues, thus disrupting the entire industry. These companies are leaders in their market, and are led by highly strategic and digital CEOs.
As executives are advocating for digital transformation, they should consider following this tiered system to achieve adoption across an entire C-suite. It may mean taking the first step alone, but all it takes is a single executive to get the ball rolling. However, they should always keep in the back of their mind that at some point, they’ll need their CEO to champion the transformation.