written by Alain Veuve MD, Switzerland
Forget digital natives
Forget digital natives
23.09.2015 | Categories: Digital Transformation
About author Alain Veuve Alain Veuve MD, Switzerland

Digital transformation has arrived in the executive boardroom. The times are over when even high-ranking management personnel negated digital progress and its impact on society – and thus on the economy as well. The times are over when digitilazation was a question of faith. Now, at the very least, an awareness exists that something must be done. Exactly what that might be, is a matter of debate among executives, theoreticians and consultants. It should therefore come as no surprise that digitalization takes many strange guises.

Digital leaders

Most executive leaders approach the subject of digitalizing their business from very different perspectives. It’s quite fortunate that no single approach – all of which all have serious flaws – has established itself as the process of choice. After all, there are no proven and successful models. At the same time, awareness, know-how and the willingness to invest and take risks are available to a greater or lesser degree among stakeholders. Nevertheless, despite the disparities, there are three distinct types of digitally involved leaders:

  1. The Alibi Digitalizers – this group supports digital transformation projects because it must. These initiatives, often forced upon executives by the supervisory board or external consultants, are usually taken out of context and thus represent digital standalone solutions. The “Alibi Digitalizer” usually doesn’t believe in the impact digitalization can have on the business. Initiatives are moved along reluctantly to provide an alibi and meet KPIs for the executive. Often, members of this group are in their last years as executive board members and shirk risk accordingly. By placing their needs above those of the business they are creating significant problems in the mid-term
  2. The Well-Meaning Digitalizers – this group is convinced of the blessings of digitalization, but doesn’t understand the full scope of necessary changes. These executives, therefore, have a hard time convincing others and don’t have the digital know-how to accomplish a complete transformation. These leaders do recognize the strategic necessity to change. Digital initiatives are often coordinated and are usually solid on a conceptual level. For the most part, however, they don’t fully meet customer requirements; thus, projects are only moderately successful
  3. The Intrapreneurs – this third group consists of leading employees who see themselves as entrepreneurs within their own companies. They are fully committed to the needs of the customers, no matter how these needs change. They also seek comprehensive solutions and approaches to problems. For these leaders, digital is the foundation of the entire business, not just a supplement. Therefore, they don’t implement digital strategies (not to be confused with digitalization strategies), but incorporate Digital as an integral element into their corporate strategy. They attempt to establish a culture of change and increased velocity in their companies. The create new offerings in record time, test them in the market, but also let the die as rapidly as the create them if they aren’t successful

Currently, the groups are roughly divided into 30/60/10 percent, with the first group rapidly losing and the last group rapidly gaining traction.

Forms of external support

Some companies choose consultants to help with digital transformation. Looking back on the past twelve months, I remain skeptical about this approach, having experienced far too often that digital change is delegated externally by corporate leaders – instead of the company assimilating and living the topic. These companies are becoming more and more dependent on the consultants, since corporate knowledge (which is increasingly digital) is externalized.

Other companies hire a Chief Digital Officer (CDO) to help in the digital transformation process. Though better than farming out the process to external consultants, this option also has the disadvantage that the other C-level executives can remove themselves from the change process – at least partially. If the company has to play an extreme game of catching up, and if there is a lot to change in a short time span, then the CDO is definitely a good alternative. CEOs would be well-advised, however, to give their CDOs a lot of room to operate as well as a broad range of authority.

Forget digital natives

Most companies, therefore, are on the lookout primarily for “digital natives” – professionals who are familiar with as many technologies and trends as possible. Though it is never a bad idea to have a working knowledge of IT, it shouldn’t be the precondition for leadership. The most important trait a digital executive should possess is a proven track record in mastering change.

The ability to adapt oneself and redesign the entrepreneurial environment to meet the ever-changing demands of customers is today's key requirement for successful business leadership.
Alain Veuve

It’s a “nice-to-have”, if these leaders also use Instagram and Twitter, but this isn’t really of paramount importance. The permanent flow of new technologies and products ensures that such “qualifications” will continue to decrease in significance.

What remains invaluable, however, is experience. If you believe that 25-year-olds who are totally “tuned in” to the digital world are more capable of significantly moving large companies and departments forward than more experienced professionals, then you are making a fundamental mistake. Such attitudes and ideas are only popular because today’s executive level is mostly concerned with maintaining the status quo, instead of actively growing the business. As a rule, most of these executives are mediocre at best. There are, however, enough experienced leaders who have continuously adjusted and reinvented business models and products – successfully – in the past as well as in the here and now. These are the truly interesting candidates. The upshot: Trust in experience and in people who have shown that they can conduct business even if everything is in turmoil.

Beyond digital transformation

This is important because digital transformation is just the beginning of an era that will be driven by permanent technological change. There is so much technology in the labs of the world, just waiting to permanently change our lives. Only a fraction of it is “digital” the way we understand the term today. And the technology is still very expensive. But it won’t be long until it will become available with a far smaller price tag attached. We’ve observed this effect, for example, with the computer. The end isn’t in sight for processing power either: The first computer with exaFLOP capacity is expected by no later than 2020. This is roughly the equivalent of the theoretical computing capacity of the human brain. These extreme improvements also have tremendous impact on research and development of other new technologies. The challenge for businessmen is to recognize these technologies and use them for their business. Whereas their “business” was a constant, well-defined area until now, business models and -sectors will have to be continuously redefined in the future. That is probably much more difficult, but also much more interesting and lucrative. We can already observe first steps of this taking place.

Digital transformation as the first step of natural selection

Many business leaders consider digital transformation to pose a threat for their businesses and try to hold onto their principles and constants. Sometimes this can also be confused with values. As recently as two years ago I tried to convince and sensitize. Today, I’m much more relaxed; no company can exist forever and it lies in our very nature that we are rarely able to create something that lasts. Ultimately, the economy is a means to an end.

Viewed in this context, the companies that are unable to master digital transformation, that is, the first test during the era of rapid change, will provide the breeding ground for new companies and initiatives. It isn’t necessary to mourn them – but I find the gloating that is taking place to some degree in the digital economy totally misplaced.

Opportunity

Digital transformation is first and foremost one thing: An unbelievable opportunity. Every entrepreneur who realizes this and places his bets accordingly will benefit. I can only encourage everyone to explore new areas and look for places to break new ground and develop business opportunities with optimism, curiosity and the willingness to take risks. Right now, the opportunities are boundless.



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