Digital MindsetLet’s face it: there’s much talk and hoopla about digital strategy and disruption. And I stand guilty as charged. Yet, according to a study conducted by MIT Sloan Management Review and Capgemini Consulting, only 38% responded that digital transformation is on their CEO’s agenda and that the number one reason for this is “lack of urgency.” Our message, and I mean all the disruption naysayers including myself, seems to have fallen on deaf ears.

Why the business inertia? Businesses are often blinded by their own success. Digital Transformation equals radical change – a conscious and committed departure from the status quo.

Change is the last item on any corporate agenda when the status quo continues to provide bounty and success. Why would a business leader whose company is raking it in, meeting/surpassing sales forecasts year-over-year and delighting Wall Street invest hard-earned cash reserves on something as nebulous as digital transformation?
Chris Heur helped jump start the digital practice at Deloitte Digital. He reveals that while current industrial revolution based organizational structures and profit making have failed, it really hasn’t failed for people at the top. Sadly, some executives still manage by spreadsheet, while the rest of the employees believe that corporations have failed them a long time ago.
The current state of work is broken. The employer-employee contract is non-existent. People are not resources – not cogs in the manufacturing wheel. While employee performance can be measured, people are more than just productivity metrics. This is the reason that in spite of advances in technology and process optimization, less than one third of employees are engaged at their jobs, as per a 2015 Gallup poll. As my colleague Rob Llewellyn, posted in his article: workforce transformation it's not a matter of if, but when. It’s already here and starting to make its presence known.
But I digress.
I talk with CxOs and business leaders and it may seem that the issue is lack of information and/or education on things digital. There’s enough information out there (again, guilty as charged). However, the real elephant in the room is this: there is a disconnect between the knowing digital and the doing digital.
I submit that the following leadership mindset are roadblocks to strategic digital innovation:

  • Business As Usual. When a business is successful, it’s easy to lean back and rest on its laurels. Why fix something that is not broken? Why change when you’re currently the market leader in your space? Please remind yourself of the Nokia and Blackbery stories.
  • Fear of Change. The only constant in business is change. One would think that all businesses are world-class performers in change management. The opposite is true. Change is the most unpopular kid in the business school yard. And yet, embracing change enables businesses to identify new opportunities and manage threats.
  • Fear of Failure. In this day and age of hyper disruption, businesses need to become lean and agile enterprises. They need to subscribe to a modicum of playing in the sandbox. It calls for innovation labs. Fail and fail fast. Cast away the stigma attached to failure.
  • Short-Term Focus. I have ranted on this many times. A short-term focus is harmful to digital innovation. Authentic transformation takes time and may not produce desired ROIs in the short-term. Digital transformation goes way beyond operational and tactical efficiencies – it’s an investment in the future of the business.
  • Distrust of People. We live and function in the sharing economy. Consumer behavior has changed drastically in regards to how they interact with brands. Our customers drive the brand conversation. Social is rooted firmly on brand trust. Businesses need to start trusting their employees. Empowered employees become engaged and contribute to brand equity.
  • Focus on Metrics. I think that there is a place for performance metrics. But too often, businesses get too paranoid about metrics, especially financial. Business success cannot be measure by financial metrics alone. There are other critical success factors (e.g. employee engagement and morale, customer experience and relationships) that actually drive performance metrics.  Finally, metrics have to be logical, practical and make sense. They need to focus on outcomes as opposed to mere inputs (e.g. activity).
  • Insular Thinking and Behavior. Businesses need to encourage digital scouts in their organizations. These are individuals who are practitioners of continuous improvements and keen on market trends and insights. These employees are digital savvy and always on the lookout for digital opportunities that could be a good fit for the business.

As long as these barriers are present in the executive leadership, a business will not be able to acknowledge the value of and commit to an authentic digital transformation. Only after a mindset overhaul can companies begin discussing a digital strategy, let alone a digital roadmap. It is only with fresh thinking and critical perspective, that business leaders can finally see digital transformation for the business opportunity that it’s bound to deliver.
For business leaders, digital transformation is an opportunity to step back and question their current management practices. Forget “out of the box” thinking. In digital, the box does not exist.
Written by Ken Polotan