Besides being an executive coach, I introduce myself as an operations consultant in the digital transformation space, and most people look at me even more perplexed. On a previous blog, I mentioned that an executive coach is a thought or accountability partner. This week I'd like to talk about one of the most important and overwhelming topics a leader needs to know about – Digital Transformation.
I have read articles that suggest not to use those two dreaded words. I've also being told not to use those words at all. Well, I've decided to continue using them because the words are not new, and they are more important and relevant than ever. There are other words we may be getting tired of hearing, such as the new normal. Digital disruption is happening, and it will continue challenging the way we design, manufacture, and service products; the way we do business and make money.
When people think about digital transformation, what comes to mind is products like the smartphone, autonomous vehicles, echo; or services such as hospitality disrupted by Airbnb and transportation impacted by Uber. It is not so common to think of how digital technologies can disrupt the manufacturing industry. The potential of digital transformation in manufacturing is why I decided to consult and coach on it. Having spent most of my career in the industry gives me the conviction to envision the enormous possibilities and significant impact that digital transformation can have in the production process. I have seen what some companies are doing implementing industry 4.0 and the tremendous value it provides. The traditional methods of improving productivity and reducing costs are no longer enough nor relevant to make or keep companies competitive.
Digital transformation in manufacturing gets referred by a plethora of terms which makes it more complicated and scarier –digital factory; digital manufacturing; smart factory; virtual factory; industry 4.0; manufacturing 4.0; agile manufacturing; and so on.
Digital disruption is the main reason why, in the past 15 years, 52% of the Fortune 500 companies disappeared. Leaders and organizations have at least two options:
1. Learn, Engage, and Embrace or
2. Ignore, Brace, and Perish.
Some definitions sometimes get used interchangeably.
Digitization is the process of converting information from a physical format to a digital one. The adoption of technologies does not mean you are digitally transformed, even if you are digitized.
Digitalization, here are some of the definitions that align with my line of thinking.
"Digitalization is the application of digital technologies to impact all aspects of business and society fundamentally; thinking different may be the most important ingredient in digital transformation" (Galen Gruman, InfoWorld)"Digital transformation is a state of mind, which doesn't just involve technology, but also embraces the complete transformation of how a company does business. While technology is the lever, true digital transformation is when companies, from the CEO on down, openly embrace technology changes to profoundly accelerate the business and improve its service offerings or customer experience." (Carlos Melendez, Wovenware)
My definition of digital transformation is the ability of organizations, its leaders, and employees, to adapt to rapid changes enabled by evolving digital technologies. It is a continual adaptation to a constantly changing environment to create value and increase competitiveness.
When digital transformation gets done with a traditional approach, leaders and organizations think only about technology; see it as a temporary and standalone initiative to be implemented like any other project in the past. Some people may think digital transformation can happen without making it part of the company's overall strategy. The leadership team thinks everything is clear and figured out – the "we've got this" mentality.
On the contrary, when digital transformation gets done with a non-traditional approach, leaders understand the importance of ensuring the readiness of the humans – this is the work I help facilitate and enable. The way to obtain success and results in a digital transformation means to know that it is about people, enabled by technology. People are at the center of any transformation, even more, when it is a digital one. The journey requires an integrated strategy, clear roles and responsibilities, collaborative partnerships, a roadmap, and investment. It requires leaders to have the patience and the willingness to take risks, experiment, learn, and trust. It needs leaders to be comfortable with being uncomfortable with embracing being preventive, predictive, and not reactive.
Using a reactive management style is a difficult habit to change since many leaders get rewarded, recognized, or promoted for being master crisis solvers. Being a master at avoiding or predicting crises will be the new normal.
Digital transformation is all about how each leader and person in the organization shows up. Starting from the top of the company, a conviction that digital is the way to transform the business. The first step is for each leader to go through a transformation themselves – that is where the uncomfortable feelings are, and this is the secret sauce. That is one of the reasons why many companies have not decided to embark on the journey or have not been successful at it. A company can have a mandate from the board of directors, an edict from the CEO or a line on the earnings calls that says – we are doing a digital transformation. If the leaders are not engaged to learn and embrace what it takes from them to make it happen, it will not happen.
Digital transformation brings a new set of challenges for leaders. I do help those leaders be ready to lead a digital transformation by focusing on critical leadership skills:
· learning agility and adaptability
· emotional intelligence
· global mindset and cultural awareness
· collaborative leadership
I engage as a collaborative partner with leaders and organizations to give human relevance to digital transformation by assessing and facilitating the readiness of the workforce who are the ones to adopt the technologies so that the benefits get realized.
Next week's topic will be about a roadmap to have a successful digital transformation and examples of companies that are on the journey.
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