Create destroy: The digital transformation challenge

The world of business is changing – in favour of the customer. No industry is immune from the massive challenges and opportunities that disruptive technologies and digital business models are enabling. In navigating the maelstrom of digital transformation, most businesses recognise that technology is, in some ways, the least of their problems.

To create the necessary context for a company’s digital transformation journey to succeed, there are three critical capabilities that leaders need to tackle:

1. Addressing the pace and depth of change demanded of an organisation and its leaders by customers
2. Harnessing corporate culture as the key to driving innovation and growth
3. Managing complex networks of people to deliver optimal value for customers.

Shift your perspective

We’ve all borne witness to the decimation of some markets in favour of digital upstarts. For instance, there lots of things that have become obsolete and are now gone from my life, having been replaced by new technologies – my old Nokia phone in favour of my smart phone, and hotels in favour of Airbnb properties. In the same vein, print and TV advertising have been substituted by advertising on social media platforms like Twitter and Facebook.

Creating new value like this often comes from simply shifting our perspective. Having lots of different perspectives sitting around the executive table can be incredibly valuable, as it enables leaders to listen deeply to the possibilities that emerge.

Transforming our organisations means transforming our leaders

The average CEO tenure in OECD countries is down to little more four years. The reason for this short duration is that CEOs are succumbing to, what I call, the ‘jaws of death' – the yawning gap between the pace at which they are transforming their organisations, and the rate of change their customers, and increasingly employees, are demanding. This tremendous pressure for change is coming from both outside the organisation and from within.

I see many leaders who feel entitled to sit on the executive shelf, and believe that they above and beyond learning. They're also above and beyond the law to some degree, because according to the rules they have written, they can do no wrong. However, in the face of emerging technology, the reality is that all leaders need to re-tool, re-equip and adapt at a faster rate than they’ve ever had to before. To imagine that in the next 10 years, I need to learn and change more than I've done in the entire 30 years I've been in business is quite daunting, but it’s what I need to do to avoid ending up on the leadership scrap heap.

Cultural change is critical

In organisational cultures, what's not allowed – often the result of unwritten taboos and rules – is just as powerful a force in shaping behaviour as all of the written rules. Generally when leaders try to change an existing culture they are met with significant resistance. The entrenched mindsets, attitudes and behaviours that make up the current culture oppose and actively fight against any attempts to introduce new people, new ideas, new processes and new technologies.

Oscar Wilde famously declared, "It's only through disobedience that any human progress has been made."

If you're going to begin to shift those mindsets and attitudes, you need to decrease the cost of individual disobedience – because people typically think it is prohibitive – to their jobs, careers or reputations. This is a critical issue to address if you want innovation to occur in your organisation. Innovation often arises from using our tools of trade  – including technology – differently. If you're not approaching the use of your tools from a different perspective, and with a different attitude, you're unlikely to experience the innovation outcomes you're after.

Digital transformation is a team sport

Today I see a lot of ‘teamwork' that is actually self-interest masquerading as teamwork. I rarely see the kind of ‘soccer teamwork’ – where there is a positional play involving an obvious collective effort to achieve a goal. A recent study conducted by the Corporate Executive Board suggests that leadership is more than just the management of day-to-day affairs (what they call transactional leadership) and the implementation of a change task (what they call transformational leadership). Rather, leaders also have the task of managing the networks of relationships, systems and responsibilities required to create the environment in which they can execute the first two. This is referred to as network leadership.

In this major study, which surveyed over 175,000 executives worldwide, only 7.3% of senior leaders reported being good at all three leadership components at once. What this result indicates is that there are a lot of people who are good at leading in two of the three domains, but very few who are good at all three. Overwhelmingly, leaders need to work with their teams in a more cohesive manner.

Your secret weapon

I believe your secret weapon is having dangerously good ideas that are wielded by determined and disobedient people who care deeply about their customers. They're the people who make the complex simple, the expensive affordable, and the ordinary spectacular. They’re also the people you want to find, inspire and keep in your organisation.