Digital Transformation: Business Leaders Still Struggling to Cope

Good times or bad, digital transformation is a firmly established reality. Yet many business leaders are still struggling with how to approach, deploy, and manage a seemingly endless string of disruptive technologies.

A recent survey of 1,186 global senior executives, conducted by IT services provider DXC Technology, and research and thought leadership firm Leading Edge Forum, found that although most business leaders understand the benefits of digital transformation, many continue to struggle with cultural, technological, and market-oriented changes.

Adrian Penka, Capgemini Invent

The way business was done yesterday is no longer sufficient today, observed Adrian Penka, vice president and North America operations strategy lead at Capgemini Invent, firm Capgemini's digital innovation and transformation unit. The COVID-19 crisis has driven home the fact that businesses need to innovate in order to survive and prosper. "The current situation requires leaders who swiftly react to the new circumstances, put key digital transformation initiatives on their agenda, and inspire their employees to adapt to the new way of working," he said.

Marco Iansiti, a professor of business administration at the Harvard Business School, noted that uncertainty and fear can drive leaders to proceed with caution. "There's much reluctance to up-end mission-critical processes ... as technology is not always as reliable and failsafe as it needs to be." Iansiti, co-author of Competing in the Age of AI, also believes that leaders should become more proactive. "We need leaders that appreciate the challenges of data-centric models, from algorithmic bias to cybersecurity, and from privacy to worker retraining," he advised. "There's a need for a generation of leaders who are familiar with both the potential and challenges of artificial intelligence (AI) and its impact on business and organizations."

Marco Iansiti, Harvard Business School

Many business leaders delay implementing powerful new technologies until competition forces their hand. Dustin York, an associate professor and director of undergraduate and graduate communications at Maryville University, points to Eastman Kodak as a classic example of a company that lost everything by failing to jump on a powerful new technology -- one that was actually developed in-house. "They had the ability to make digital pictures way before it was mainstream, but they were afraid of what digital would do to their company," York explains. "They thought digital pictures would kill off Kodak, so they sat on it, put it into a vault, and never let it see the light of day." The decision sealed Kodak's fate. "That was a mission-critical system they had the opportunity to move on, but they were too fearful to put into action," York stated.

A skills shortage

Research from the Capgemini Research Institute indicates that over 54% of organizations believe that the digital talent gap is hampering their digital transformation and that their organization has lost competitive advantage due to a shortage of digital talent, Penka noted.

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Finding skilled technical talent is complicated by the fact that business knowledge is an essential requirement in just about every technology job category, and not many people are proficient in both technology and business areas. "A data scientist out of the university, for example, misses the understanding of the politics and business of the enterprise," said Serge Findling, vice president of research, digital transformation, at research firm IDC. Addressing the knowledge gap requires organizations to become creative. Findling recommended tapping into the combined knowledge of internal multidisciplinary and cross-organizational teams. He also suggested that businesses increase staff diversity and partner with suppliers, clients, and even competitors on promising ideas and trends.

Serge Findling, IDC

Working with different business units can be difficult, yet it’s important for business leaders looking to drive innovation to find ways of breaking down department silos. "Lasting business transformations touch every unit of an organization because it’s essential to have all employees working toward the same bottom-line goal," said Herb Schul, EY Americas Advisory Markets' sectors and solutions leader, who specializes in digital transformation and business innovation for the consulting firm. "It's imperative to educate and train all employees on the transformation as well as predict the complications and questions certain departments will have when adapting to such large changes."

The most important skill a leader can have is innovative thinking, Schul said. "The goal of a leader is to lead a business into greater success, especially when it comes to transformation," he observed.

Herb Schul, EY America

Takeaway

Iansiti believes that we're currently living in an unprecedented time for digital transformation, noting that many of the transformations that are currently underway are here to stay. "Everyone that can do this is doing it, literally this week," he said. "Once organizations shift, they will not shift back to the same place we came from."

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