The digital transformation project we have recently started in Kazakhstan is providing us with great learnings for other clients, who are embarking on their digital transformation journeys.
What are the learnings?
What are the examples explaining the importance of the learnings? For privacy reasons, the examples are taken from industry giants. We are convinced, that, given the nature of the transformation, the examples we refer to apply to any industry, any segment, and any geography.
1) Clear vision, strong leadership
A clear vision provides direction and alignment, while strong leadership sets the tone and empowers teams to take risks and experiment. An agile culture is characterized by collaboration, openness to change, and a willingness to learn from failure. Together, these three elements provide a framework for organizations to adapt to new technologies and business models, innovate, and create new value for their customers.
To illustrate this point, consider the example of Microsoft’s digital transformation under Satya Nadella’s leadership. When Nadella took over as CEO, he realized that Microsoft’s existing culture was too hierarchical and focused on internal competition rather than collaboration. To transform the company, he developed a clear vision of becoming a more customer-centric organization and empowered his teams to experiment and take risks.
2) CEOs should take ownership of digital transformation and lead from the front
CEOs set the tone for the organization and provide direction, resources, and support to ensure the success of digital transformation initiatives. The message that is generated when the CEO takes ownership and leads digital transformation is that digital transformation is a top priority for the organization and that it requires the commitment and involvement of everyone in the organization. It sends a clear signal that digital transformation is not just a technical or operational project, but a strategic imperative that requires strong leadership and vision to drive change and create new value. It also demonstrates the CEO’s belief in the importance of digital transformation, which can inspire and motivate employees to embrace the change and contribute to its success.
A good example of this is the digital transformation of GE under Jeff Immelt’s leadership. Immelt recognized that GE’s traditional industrial businesses were being disrupted by digital technologies and that the company needed to embrace digital transformation to remain competitive. He took ownership of the transformation effort, personally leading the development of a digital strategy and investing heavily in building digital capabilities. He also made it clear that digital transformation was a top priority for the company and ensured that all employees were aligned and committed to the effort.
3) Encouraging experimentation, and embracing failure as a learning opportunity
Encouraging experimentation means creating an environment that supports trying out new ideas and approaches to solve problems or create new opportunities. Embracing failure as a learning opportunity means accepting that not all experiments will be successful, but viewing these failures as opportunities to learn and improve. Together, these practices promote innovation and continuous improvement by encouraging risk-taking and learning from both successes and failures.
One example of a company that has successfully embraced experimentation is Netflix. The company encourages experimentation by giving its teams the freedom to test new ideas and learn from failure. For example, when Netflix decided to shift its business model from DVD rentals to streaming, it faced significant technical challenges. However, the company was able to learn from its mistakes and build a highly scalable streaming platform that has become the core of its business.
4) Focusing on customer-centricity
Focusing on customer-centricity is important because it enables organizations to understand and meet the evolving needs of their customers. In a digital world where customers have access to more information and choices than ever before. By focusing on the customer, organizations can develop a deep understanding of their evolving needs and preferences, and use this insight to create personalized, seamless experiences across all channels.
Amazon is an excellent example of a company focused on customer-centricity. Amazon’s success is built on a deep understanding of customer needs and preferences, which is driven by the company’s data-driven decision-making culture.
5) Employee communication with a special focus on “small victories”
Effective communication helps build understanding and alignment among employees, which is essential for driving change and ensuring that digital transformation initiatives are successful. Communicating small victories as part of change management project communication can help build momentum, maintain motivation, and increase buy-in from stakeholders by highlighting progress towards achieving larger goals.
One example of how employee communication can support digital transformation is the case of Delta Air Lines. Delta recognized the importance of engaging and communicating with employees throughout its digital transformation journey. To support this effort, the company established a dedicated communications team, which used a variety of channels to communicate with employees, including email, social media, and in-person events. They created a digital transformation portal that provided employees with access to information about the company’s digital initiatives, including videos, case studies, and other resources. The portal also included a feedback mechanism that allowed employees to share their thoughts and ideas about digital transformation efforts.
6) Creating a “change culture”
Creating a change culture is crucial for successful digital transformation and change management projects because it enables organizations to adapt to new ways of working. The objective is to encourage employees to embrace change, take ownership of their roles in the transformation, and actively participate in the process. Change ambassadors play a critical role in fostering a change culture. Change ambassadors are individuals who are enthusiastic and passionate about change, and who can serve as champions for the transformation within their organizations.
Are there other learnings?
It is needless to say that there are different elements and aspects that we believe are a prerequisite to success, that are beyond the above. However, we found that the 6 learnings shared above are critical success factors right at the outset of any project.
In the subsequent parts of this series, we’ll continue sharing insights based on real-life experience.