The confluence of COVID-19 and changing work dynamics have forced businesses to consider how aligned—or misaligned—their operations are with rapid digital transformation.
The economy is increasingly witnessing a bifurcation between businesses that proactively embraced change and those that adopted a conservative approach in hopes of gaining more clarity in the future. In our study into the six Covid-era leadership imperatives, we found that crises accelerate transformation efforts and are often the catalyst for changes that leaders had long put off or pushed back against.
McKinsey also found in its recent study on the acceleration of digital adoption that organizations have reached a technological tipping point. Companies that executed successful responses to the crisis reported a range of technology capabilities that others did not. Most notably, these include filling gaps for technology talent, the use of more advanced technologies and higher speed in experimenting and innovating. Conversely, risk-averse companies lost a year of evolution during the pandemic and today are far behind their more agile competitors.
The pressing need to capture the benefits of digital transformation has led organizations to rethink their operational models and how they can implement change. While many business leaders focus on the value and mechanics of innovative technologies for digital transformation, the most effective CEOs and boards recognize that implementing and managing these profound changes is a complex human challenge.
We look at five ways organizations can find the leaders they need to steer their organizations towards a digitally oriented future—and how to set them up for success.
Think Beyond Big Tech Hires
When many organizations look to hire a Chief Digital Officer, or similar role, they typically look in Big Tech companies. The logic is that Big Tech executives will be adept at accelerating innovation. It is, after all, what they do each day. While this is true, there are some important caveats.
Companies such as Google, Facebook, Amazon and Netflix are typically populated by digital natives. Everyone has some level of expertise in digital technologies and competency is distributed throughout teams, not embodied in a single person. These executives have never had to debate with internal stakeholders why the business should be digitally oriented. Digital transformation is their existential reason for being. It’s in their DNA. What this means is that tech professionals recruited from these companies may lack experience in overcoming resistance to digital transformation; blowback can often be a new and confusing experience for them. So, while Big Tech executives are an important part of your candidate pool, your search should not always start and stop there.
Avoid the Individual Savior Trap
Avoid the temptation of thinking that digital transformation can be achieved by one person alone. Leaders need to excel at building and managing coalitions if they are to coordinate company-wide changes and sustained progress.
Fighting internal criticism, inertia and skepticism requires professionals with experience in change management and justifying a vision amid institutional headwinds. Communicating the urgencies and opportunities of change is key to gaining universal consensus. Leaders must contextualize challenges in ways that do not place blame or make stakeholders feel disempowered or disenfranchised. They must successfully engage and inspire their peers, staff, bosses and their entire ecosystem of stakeholders. In the digital world, the ability to influence is as crucial as technical skills. Not everyone is capable of aligning stakeholders, so look for leaders with proven track records of doing so.
Move Towards an Agile Culture
Pivoting without being tied down by the inertia of organizations allows businesses to iterate and optimize along a modular and dynamic timeline. This is the definition of agility. When done right, it allows a business to move faster, accelerate learning and unlock digitally enabled growth sooner.
In an agile culture, failures are not viewed as failures, but data points that help define the journey to success. Executives that were once paid to not make mistakes must now be given permission to color outside the lines—because no one knows exactly where the future is heading and some movement is often better than none.
Agile cultures are important because they allow “open source” mindsets to thrive. This is the idea that resources and ideas no longer have to remain within an organization’s four walls. Digital has less-defined borders and prioritizes speed-to-market over ownership of a product or piece of intellectual property. Leaders operating in this space tend to be more open to navigating collaborative environments where customers, partners, suppliers and vendors could also be competitors—especially when dealing with cloud-based businesses and services. In the digital era, everything is connected, and business leaders must be agile stewards of those multi-faceted relationships.
Re-think Your Hiring Processes
Organizations should re-think how they attract talent to join their management teams and boards. Finding and vetting these candidates could mean abandoning the traditional style of interviewing where each party presents their best sides in a forced formal environment. These interviewing techniques may result in a poor cultural fit or unwelcome surprise in how the individual actually communicates, behaves or thinks.
Instead, collaborating on a 20-minute use case during the interview process will reveal their personality, professional sensibilities and style of thinking through challenges and solving problems. This exercise allows candidates to demonstrate their skill sets and explain how they will manage people and marshal resources to implement company-wide digital transformation. In this process, the employer discovers not only the cost of hiring the individual but also the cost of aligning the assets, both human and technical, this individual will need to achieve success.
Watch out for Shiny New Toy Syndrome
Organizations must be self-aware enough to know whom they need to hire and why. Too often businesses become enamored with the latest digital technology or trend without realizing they lack the infrastructure and resources to support that level of transformation. Sometimes establishing this baseline of capabilities can take years before it makes sense to hire a game-changing technology leader to implement strategy and manage people and operations. Understand where you are in your digital transformation journey, and be clear about whether you are hiring ahead of the curve or fit for purpose.