What business leaders should know about digital transformation
Columnist Trond Lyngbø notes that in order to thrive in a digital world, business leaders must invest in the digital skills and expertise of their employees.
“The blind leading the blind” is a poignant idiom — one that evokes powerful imagery. And while it’s a misfortune when it happens on an individual level, it’s a disaster when organizations fall victim to the phenomenon.
Yet how often have we all witnessed situations where an uninformed, ignorant or clueless leader drives a company or business into the ground?
This scenario is becoming more frequent in the modern world of business, where innovation and progress happen at the speed of light. In boardrooms and strategy workshops, at consultation sessions and review meetings, business leaders are embracing the transition to digital in order to stay competitive.
Digital transformation requires an ability to move quickly and decisively. Unfortunately, leaders at large organizations often don’t have the detailed knowledge necessary to make the right decisions.
What’s the solution?
Prioritization is the key that’s critical to transformation — and to know what to prioritize takes experience, knowledge and keen insight. No longer is it important to just exhort everybody on your team to “work harder, faster, longer.” Running faster on a treadmill won’t get you ahead!
Transforming your business for the digital era requires not just a strong business acumen but also an in-depth knowledge of digital best practices and strategies. Without the latter, you’ll waste time blindly attempting digital initiatives without understanding how to make them successful; without the former, your digital efforts will not yield strong results, since they won’t be aligned with larger business goals.
The dilemma (and danger) of “I don’t know”
The problem, in a nutshell, is that a lack of digital expertise within large organizations makes it difficult or impossible to pivot the business effectively. When leadership fails to invest in digital skills and knowledge — both for themselves and for their employees — they stop being the most important people in your organization and instead become the biggest threat to your survival.
Tomorrow’s leaders can’t afford to lead in this way. Better analytics, tools and systems will cast the harsh glare of public attention on wrong choices and misjudgments. And there will be consequences.
Some top-level managers don’t know what they’re looking at, or what they should be looking for.
A business manager at one of my larger clients once shared a report revealing that only a single-digit percentage of their revenue came from online or digital marketing. He was convinced that this was accurate because their tools (like Google Analytics and Adobe Marketing Cloud) gave them a specific revenue figure. He thought this number was the only portion of their profits attributable to digital marketing efforts.
But online marketing is no longer completely disconnected from in-store sales. Indeed, Google research has shown that “18 percent of local smartphone searches and 7 percent of non-local searches led to a purchase within a day.” Additionally, consumers are using their smartphones in-store to help them make purchases.
In other words, the offline sales he’s making didn’t come without help from search engines and digital marketing efforts.
When leaders don’t understand the dynamics of customer acquisition or the process of a digital revolution in business that drives their revenue, they may look at numbers in isolation from other related variables and draw wrong or flawed conclusions. That’s dangerous leadership.
Typically, the bigger the organization, the worse the problem. Since smaller companies are closer to the money, managers and leaders feel the pain more acutely and are forced to take responsibility for poor choices. That, in turn, makes them more motivated to succeed.
It’s time to shed dogma & embrace the new
Old-school leadership was clothed in mystique and cloaked in myths. Take this one, for example:
“Focusing on tiny details is bad for productivity, bad for business.”
Today, such a mindset is deadly. Unless you fix whatever is broken early, no matter how small or insignificant it seems, it will come back to bite you when things start scaling to a higher level. The devil is truly in the details. And “nitpicky” managers who pay attention to detail seem to deliver the best outcomes and biggest results.
And it isn’t impersonal at all. Your employees will notice and feel the difference. When great employees — who are your most powerful asset — start losing faith in the leadership, they’ll flee to greener pastures. You’ll be left with just “average” workers — the ones who punch the clock to earn a paycheck but invest little more into the success or growth of your organization.
This kind of attrition is being seriously underestimated in large companies. When pseudo-experts with little actual knowledge or experience start getting involved in areas they don’t know much about and talk down to the actual specialists who can fix problems and move the business forward, it can harm employee motivation — and launch an exodus of talent out of the company.
Good folks hate the hamster-wheel
No one enjoys the thought of mindlessly running inside a metal cage and getting nowhere.
Every stellar employee, potential great manager or budding leader comes to work at a company with ambition, desire and motivation to accomplish big things. Their specific goals might be driven by the nature of your industry, products or business model. But the wish to achieve greatness is a common factor among your rock star staff members.
To the extent that a modern manager can tap into this rich vein of energy, ambition and drive to direct and guide each promising worker to reach his or her highest potential, the organization will thrive and grow to reach new heights. But when leadership fails at this critical task of spotting, nurturing and freeing their best talent to reach their own potential, the company will lose.