What it takes to lead through a digital transformation

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Happy New Year from hellomonday! 

Some people might already be back at work today. Others might still be enjoying another week (or two!) of downtime before getting back into it. 

Whatever you’re up to while reading this, we hope you’re feeling refreshed and recharged and ready to embrace 2023! 

It had been ages since I last celebrated New Year’s Eve in Sydney. I’d spent many years living in the USA and would intentionally choose to fly out of Sydney on December 31st after having spent the Christmas week at home with family and friends; I spent NYE 2019 escaping a bushfire that had come far too close to a silent meditation retreat I was attending in Tasmania (now that’s a story in itself); NYE 2020 was in lockdown for all of us; and then to be honest I still wasn’t comfortable socialising when NYE 2021 came around. 

The other night I found myself at a real New Year’s Eve party … with a great view of the fireworks as a bonus. 

Some faces were familiar. Others I hadn’t seen before. Old friends and new who worked across finance, legal, medical, consulting, education, events, fashion, media, and eCommerce all eager to farewell 2022 and say hello to 2023.  

Not surprisingly at an event like this, many conversations quickly turned to the subject of ‘work’ and more specifically around what people had been doing since the pandemic. As expected, some had lost jobs, changed jobs, closed businesses, launched businesses, and pivoted businesses.  

Many of my fellow party guests either owned their own business or ran a company or a large team and shared how one of their biggest challenges since the pandemic had been around leading their organisations through a digital transformation.  

Regardless of whether the Sydney Harbour Bridge would illuminate a word like “Eternity”, “Peace”, “Together”, or “Love”, in the hours leading up to midnight, it felt like the theme of the night was “Digital Transformation”. 

So, in preparing hellomonday’s first article for 2023, I thought I would do a bit of research, and see what some of the pioneers in helping businesses transform digitally had to say on this hot topic.  

What exactly does ‘digital transformation’ mean? 

There is consensus in much of the research that the pandemic had forced every organisation to digitally transform. For some leaders and business owners, this may have meant moving everything into the Cloud; for others it might have meant introducing AI or machine learning into parts of the business to meet rapidly changing customer expectations; or it may have simply resulted in a hybrid workplace to meet the demands of today’s employees. 

It was evident at the New Year’s Eve party that the word ‘digital’ meant something different to different people.

The experts in the field of organisational change define ‘digital transformation’ as the integration of digital technology into all areas of a business resulting in fundamental changes to how businesses operate and how they deliver value to customers.

Commentators from PwC explain that when it comes to digital first, it’s up to leadership to ensure that ‘digital’ goes deeper than simply putting a digital veneer on top of your old business. It should transform your customer experience, employee experience, the products and services you provide, the technology you use, and ultimately your entire business model. 

Digitalisation is not a three-year project — change has to be holistic, continuous and strategic.  

Leaders must understand exactly what this means, and what it doesn’t, so that they can bring their people along on the journey. 

McKinsey commentators reiterate the idea that ‘digital’ is not simply a destination; that it’s a permanent state of operating based on learning and adapting faster than the competition. But that can happen only if leaders act as the digital guardians of their business’s transformation and recognise that data is the core competitive differentiator. 

We’ve written about what it means to be a data driven leader previously. 

As a data-driven leader, some of your primary goals might be to:  

  • Encourage everyone in the team to embrace data  
  • Reinforce the differences between ‘data-driven’, ‘data-informed’, and ‘data-inspired’ mindsets  
  • Demonstrate how data can help drive business improvements, and create a strategic competitive advantage  
  • Make data accessible to everyone and have your data experts share their wisdom 

Data can certainly help you improve business performance (increase sales), forge more solid client relationships, streamline internal operations, and improve recruitment processes. However, the value isn’t purely in the data itself. It’s about what you do with it and how you use it to drive your decisions as a business leader. 

When it comes to digital transformation, the experts at PwC also talk about the importance of removing hierarchy. They state that, “teams should be multidisciplinary … and un-siloed to remove business unit blockages and territoriality and empowered to get from idea to value in the quickest way possible. 

We’ve also written about navigating the challenges of leading across a matrix organisation in the past

Leaders sharing the management responsibilities across various projects need to constantly clarify their respective expectations and priorities while ensuring that their ‘reports’ feel comfortable asking questions and clarifying exactly what is being asked of them … and by whom.  

Leadership within a matrix organisation is all about creating a united front. 

Creating a matrix organisation as part of a digital transformation doesn’t have to be confusing. It doesn’t have to be stressful. In fact, it can (and should) lead to a more engergised and engaged workplace. 

Deloitte commentators state that it’s up to the leader to maintain leadership of any digital ambition. To tell a compelling story; to clearly explain the need for change, including the benefits of digital transformation; to create an integrated vision beyond just technology and deliver it with powerful and consistent messaging that brings people along on the journey.  

It’s also important to align incentives with digital transformation. 

After all, if you ask your people to embrace and focus on digital transformation but keep measuring and rewarding them in the same old way, you probably won’t see much change in their behaviour and priorities. 

The McKinsey commentators agree here, reinforcing that when a business undertakes a digital transformation, employees right across the organisation (not simply those in the digital, technology, or product teams) need to be trained in order to be truly accountable for the adoption of the digital solutions. 

“A rule of thumb is that for every dollar spent on digital, another dollar should be spent on adoption”. 

This is probably why hellomonday is being asked to facilitate so many programs to help organisations adapt to and adopt digital transformation.  

The three key take-aways from the PwC commentators on this hot topic are: 

  • Organisations need to embrace a digital-first mentality to compete in the modern business world
  • Digital transformation must be holistic and continuously deliver value. It is no longer a fixed-length technology project 
  • Leaders play a crucial role in a successful transformation, enabling innovation, empowering employees and providing critical direction on the journey

Leadership can either make or break your digital transformation.

It is the element without which the rest of your transformation efforts will be rendered meaningless. 

Every business should be prepared to undergo digital transformation to some extent – a business model reinvention that requires different functions across the organisation to work together in new ways, and the only person who can make that level of sustained change happen is the leader. 

Remember hellomonday provides coaching and support to every leader, prioritising development initiatives that result in long-term sustained change, reinforcing habits through curated learning and impactful coaching, and ideally helping leaders shape and guide successful digital transformations. 

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