This article was originally published in the Summer 2018 issue of The Record.
The shift to digital technologies holds the promise of enhanced dialogue and collaboration with both partners and customers. However, as with all change, it is not without risk. Business decision makers need to be confident that they have the tools to enable successful transition and are looking to thought leaders who can point the way.
“Leaders need to understand how technology will impact their businesses, how to think about an always-on connection to all of their products, customers, assets and people – and how all of this will change their competitive landscape,” says Toni Townes-Whitley, Microsoft’s president for US Public Sector, Healthcare and Financial Services. “They need to get ahead of the change that is already upon us so they can successfully pursue digital transformation, rather than simply react to the disruptive changes that technology is creating all around them.”
To do this, a culture change is needed across the organisation, she says. “Becoming a digital enterprise will inform and change how a company makes decisions, how it engages customers, how it empowers employees, how it transforms products and how it optimises operations.
“This starts with the leadership team defining what culture means to the company, embracing and communicating this at all levels, and building momentum by demonstrating the great work happening every day. This is critical to getting employees to support and accelerate the digital transformation journey.”
Digital transformation brings with it many challenges, says Melissa Topp, senior director of global marketing at ICONICS. “The first is the perceived divide between a company’s IT and operations departments. The second is a misconception that industrial automation customers resist any interest in new technology if existing equipment is doing its job.”
Topp sees promise in the interest many companies have shown in the emergence of the Industrial Internet of Things (IIoT). “Affordable IoT devices have allowed for the best of both worlds – enabling customers to avoid a major ‘rip and replace’ scenario and resulting in quicker adoption of digital transformation for businesses.”
But what happens when organisations perceive technological innovation as an existential threat? “The hardest thing for a company to do is to reinvent itself in a way that threatens its historical basis for success – and yet that is the very essence of digital transformation,” says Greg Moran, chief operating officer at Wiretap. “Iteration and rapid adjustment to customer data should drive the transformation process. Typically, this results in fundamental re-definition of organisation structure, external partnerships, and new go-to-market strategies that truly reflect the company’s new value proposition – without undermining its fundamental mission.”
Matt Scott, co-founder and chief technology officer at Malong Technologies, believes that the biggest obstacle to the adoption of innovative technologies can be summed up in one word: heritage. “It’s the legacies of really smart people who contributed great ideas back in the day. The bad ideas are really obvious and easy to discard. But the toughest roadblocks are when the ideas were great and worked well in their time. How do you honour them properly – and also move on?”
The solution, he says, is to view this history as context. “It’s part of our responsibility to help them through every stage: from interest to testing to full-scale deployment. We do it with data, benchmarks, validation, communication and feedback at every step.”
Adherence to outdated traditions can prevent beneficial change, says Simon O’Carroll, marketing director at Mercato Solutions: “The biggest blockers to digital transformation are ultimately people adopting the ‘This is how we have always done it’ attitude. When actioned, the majority of digital transformation programmes are made up of stand-alone initiatives, often with strong disagreements on collaboration practices and senior team members believing they have a digital vision, whilst employees disagree.” He advocates joining up already deployed instances into coherent transformation solutions, as well as empowering organisations to rapidly prototype new processes and systems.
One of the most common barriers to the adoption of enabling technologies is the lack of modern, relevant success metrics and little to no enterprise-wide visibility of real progress and change, says Angelique Mohring, CEO and founder of GainX. “Businesses that cannot design and direct information flow across their entire organisation are not going to be relevant in the next economy. Increasingly, the executives I speak to are realising that the metrics that they have been using to measure progress are no longer relevant in today’s competitive landscape. To succeed, they need to remove any remaining vanity metrics and augment their key measures with deeper analytics driven by the competitive benefits of machine learning. Visibility into their organisational network – meaning strategic information flow and the dependencies between people and projects throughout the organisation, is a non-negotiable must to survive beyond today’s market! With a data-driven network view of people, projects, and the actual adoption of your corporate strategies, leaders can competitively navigate to the next economy.”
For those businesses willing to take this journey, the good news is that disruptive technologies like artificial intelligence and machine learning are accelerating the potential for businesses to optimise their operational models, says Townes-Whitley. “Equipment and devices, once isolated and siloed, can now stay continuously connected – enabling businesses to gather data across a wide, dispersed set of endpoints, draw insights through advanced analytics, and then apply those learnings to introduce improvements that exceed the expectations of their customers.”
This means that organisations can shift from merely reacting to events to responding in real time, or even pre-emptively, to anticipate and solve customer issues before they become issues.
Scott says Malong Technologies is seeing customers adopting a mindset of openness to new ideas, with the understanding that a few of those ideas might not work out.
Essam Makhlouf, marketing director at education services provider ITWORX Education, agrees, explaining that transformation works best when there is freedom to try new things, “A great strategy for business leaders to embrace innovation and empower their employees to innovate is to allow freedom just until the edge of chaos; in other words, to manage at the edge of chaos.”
Not many business environments are set up for this kind of experimentation, however. “Companies often set objectives and establish reward systems that punish experimentation,” says Wiretap’s Moran. His advice: “Take a hard look at how your organisation rewards leaders and make adjustments to encourage thoughtful risk-taking.”
Measuring progress is good, but it’s crucial to track the right metrics, says Mohring. “One of the top strategies is to rethink how you measure progress and transformation, and that has to include information flow. It must include measuring your network, which is people.”
Topp advises businesses to accept that complete digital transformation is not likely to occur overnight. “It’s okay to pick an individual business process – whether the most troublesome or underperforming or even the highest performing or flagship process – and apply new digital data-driven solutions. This allows a business to apply a test at a smaller, more manageable scale.”
What’s clear is that business culture is imperative to success – and this starts at the top. “Founders and CEOs need to create a culture where the best people can do their best work,” says Malong’s Scott. “We see Microsoft modelling and encouraging positive corporate culture. As a young company, we’re inspired by it.”
“Businesses need to set digital KPIs focusing on behaviours with tangible changes proposed,” adds O’Carroll at Mercato Solutions. “Investment also needs to be made in digital skills and in infrastructure and digital enablement platforms to enable digital culture to reach everyone in the organisation.”
The essence of a company’s culture is not embodied in a list of mission and management principles, says Moran. “True culture lies in the way people interact and work with each other, customers and suppliers. By leveraging connective technology like Microsoft Teams and Yammer, companies can use effective collaboration and cross-functional communication as a secret competitive weapon in their industry.”
A business culture that fosters innovation enables businesses to grow, says Makhlouf. “It’s vital for a successful business in today’s market to be one that is constantly transforming itself through learning. Organisations should enable their manpower to keep this learning mode up-to-date through corporate learning techniques and solutions.”
The next step is to become ‘future ready’. But just what does such an organisation look like? According to Moran, the essence of a future-ready organisation is that they win – again and again – and it looks effortless. “Employees at those companies don’t think they are ‘innovating’, they think they are doing their job and it looks like magic to the rest of us. The ‘magic’ stems from the organisation’s leadership developing clarity of purpose, a narrow and clear focus, customer obsession, and a culture that rewards and embraces teamwork and collaboration.”
A company’s customers are crucial in equipping it for the future, says Scott. “Its leadership and people look like and think like its customers, and then decisions follow accordingly – its organisational structure, its technology, its marketing strategy and so on. As its customers change, the organisation can change with them – and the converse is also true, that the organisation can offer change that its customers will embrace – because they are aligned and there is mutual trust. It’s what we’re trying to build at Malong Technologies.”
Those organisations that are truly prepared for what’s ahead have already adopted strategies for their own digital transformation, says Topp at ICONICS. “It doesn’t necessarily mean that transformation is complete, but that the decision-makers are actively guiding the business culture based on data-driven results rather than clinging to legacy methods. The organisation should have the means of discovering and connecting to all of its available data and would ensure that its business culture remains flexible enough to adapt when new technologies and methods demonstrate an opportunity to improve.”
O’Carroll at Mercato Solutions stresses the need for businesses to balance creativity and innovation with realism. “They have to be open to new ways and understand how their specific industry is changing. Organisations that stand the best chance of being ‘ready’ will merge employee generations, with more senior members bringing wisdom and domain expertise, whilst younger members bring innovation.” However, he cautions, “Senior management have to actively promote innovation, not instantly kill new ideas because of tradition.”
When it comes to enabling businesses to navigate the turbulent waters of modern technology, several thought leaders’ names are frequently heard in conversation. One of the most popular is Microsoft’s own Satya Nadella, of whom Townes-Whitley says, “He is a huge inspiration not only to me, but to Microsoft employees and many leaders across industries. Satya has taught us the power of empathy, not something often embraced in today’s fast-paced, competitive world. But having empathy is critical to helping your employees find and connect to their purpose and passion in order to better understand and meet the needs of customers. Empathy may not be part of the traditional business toolbox, but in the context of organisations seeking to enable meaningful enterprise-wide change, it could be in for a rise in popularity.”