The Top 5 Characteristics That Set Digitally Transformative Leaders Apart
What do digitally transformative leaders have in common?
Digitally transformative companies share traits that are inherent in their people and/or culturally mandated by aggressive, visionary leaders.
For example, Bezos at Amazon.
Before we go further, however, let’s take a step back and understand why leaders choose to invest and digitally transform their organizations in the first place.
Two motivations are clear.
Improve Customer Experience
Companies choose to go through digital transformations to provide a dramatically improved customer experience, to better satisfy the consumer’s insatiable demand for immediate gratification in practically all things (i.e., service or product delivery, the need to know now).
This mandates information, and data, which is either the product itself (e.g. music or movie streaming or a banking transaction) or about the product (like shipment status) must be able to flow as 1s and 0s at lightspeed to the customer’s mobile app.
Increased levels of more holistic customer engagement lead to greater customer satisfaction and loyalty, which results in more purchases and greater customer lifetime value. The virtuous cycle (customer positive reinforcement) is completed by the mobile app.
Second, companies choose to digitally transform in order to wring out the inefficiencies of (manual, spreadsheet-based, or “batch” system) internal business processes that create friction, slow down value-added operations with non-value-added steps, and adversely affect not only profitability but a company’s inherent ability to be nimble, proactive, responsive and compete effectively and efficiently.
ERP, SFA, CRM, et al. were intended to solve this problem but fell short. Robotic Process Automation (RPA) is the latest technology to address “swivel chair interfaces,” which can and should augment continuous process improvement. Predictive and prescriptive analytics models can automate the anticipation of what is going to happen next, and optimization of the outcome, e.g., minimizing the time and cost of shipping a product to the customer.
Given that most companies are always looking to improve the customer experience and reduce inefficiencies, what are the factors that set the innovators apart from the companies that remain constrained by their current data landscapes?
The Top 5 Characteristics of Digitally Transformative Leaders
A leading technology company that loans people money (i.e., a “digitally transformed bank”) indicated that its move of 100% of its technology infrastructure and Agile/DevOps-based processes to the cloud was primarily about speed. Like the real estate mantra “Location. Location. Location,” this company’s top three decision criteria are “Speed. Speed. Speed.” Speed of execution, speed of time to market of new products and services, speed of value delivery internally and to the customer, speed in the customer’s experience…you get the idea.
Move fast, change and adapt quickly, operate at the pace of the digital customer, and faster than the competition is the goal. Speed can only be achieved if you’re digital.
When your business is digitally enabled with platforms for product and service delivery that scale without the addition of capital expenditures or vast amounts of labor, leaders can realize growth much more rapidly, and much more profitably. Profitable growth is every CEO’s primary goal.
When Cisco was going through a period of particularly heady and rapid growth in demand for routers and switches, the CFO calculated that they would need 33,000 additional engineers to configure its products to meet customers’ requirements. Realizing that was infeasible on multiple levels, Cisco built a website, backed by a set of AI-based algorithms, that could automatically configure networking gear products to a customer’s specification without human intervention. Profitable growth and business model scalability were achieved, by digitally transforming a manually-, human-intensive and complex business process.
Digitally transformative leaders are comfortable with continuous change and adaptation, at scale, and at their chosen speed of execution.
Think Darwin – Survival of the fittest through adaptation. Think Schumpeter – Creative destruction and self-imposed disruption of your own business model. Think Grove – Only the paranoid survive. Think Amazon – From books and CDs to 400M SKUs. Think Google – from online search to driverless vehicles.
These companies’ leaders thrive on change as a means to an end of continuously improving performance in terms of customer experience and profitability. (The Japanese call this kaizen.) Changes in business processes and practices, people and culture, and technology platforms and approaches.
Digitally transformative leaders will implement any change that is conceivable and warranted to more efficiently and more effectively achieve speed and profitable growth. If they can’t buy it, then they invent it themselves (see AWS).
Digitally transformative leaders are driven to compete and win every day. From Bob Crandall at American Airlines & Sabre to Jeff Bezos at Amazon, companies that practice digital transformation are driven to win. Pure and simple. Win their customers, win market share, win for their employees, win in the financial/capital markets. They do not shirk from making big, bold investments in all available digital technologies that are relevant to their business. They are not afraid to invent, reinvent, and try new things, and fail. Quite the opposite: they fail fast and learn quickly from their mistakes; they continuously tune, and move forward, or abandon an approach that has been proven to not work and try something new. This kind of drive comes with a rare balance of will and grace, extraordinary confidence and equal humility, and both IQ & EQ.
Digitally transformative leaders are inherently more comfortable, and frankly fearless when it comes to leveraging all sorts of technology platforms, and technology-based processes and ways of doing business. Even more importantly, they are comfortable continually rethinking and remaking their entire end-to-end analog, or old school digital, business model, processes, and delivery execution leveraging the most impactful new digital technologies.
Digital Transformation does not have to happen all at once, overnight. No one wakes up one day “digitally transformed.” Like most things in life, Digital Transformation is a journey, a process, a mindset and a way of thinking and behaving. It takes a significant amount of time and effort to get started, get moving, really get rolling delivering value and hitting milestones, and ultimately be successful, then maintain at that level, and then get to the next level. Will, tenacity, and resiliency are more important than intellect, although serious technology skills are required.
Caserta helps leading organizations with their digital transformations, empowering them with the skills, strategies, and resources needed to extract maximum value from their data and analytics. Learn more about Caserta >