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The ancient Greeks developed a philosophical concept called gnosis, which referred to a secret knowledge that allowed its possessors to achieve enlightenment. This secret knowledge was possessed only by a select few, who occupied a privileged position above those who did not possess it.
Many organizations regard digital transformation in a similar way. They believe the path to successful digital business transformation requires secret knowledge, either naturally instilled in the millennial generation from birth or possessed only by a select few who have worked at Silicon Valley technology firms. Companies that do not possess aspects of this digital gnosis will be locked out of an abundant digital future.
Most of our research on digital business over the past few years, however, tells a very different story. Successful digital transformation does not require any sort of secret or rarefied knowledge. Rather, the biggest barrier is the will and determination to make it happen.
It’s no secret that digital disruption is happening.
In our 2016 Digital Business report, 87% of respondents believed that their industry was likely to be disrupted by digital trends, but only 44% of respondents said that their organization was doing enough to prepare for that disruption. This huge discrepancy between knowledge and action suggests that a key barrier to digital transformation isn’t lack of knowledge that the company needs to act, but simply an unwillingness to do so.
This perspective is also supported in other ways by our data: Many survey respondents indicated that the organization itself was the biggest barrier to digital transformation. Respondents believed that their organizations were too slow and risk-averse to effectively respond to digital trends. It’s not that organizations can’t transform digitally, it’s that they won’t.
Leading successful digital business efforts does not require secret knowledge.
We also asked respondents which management characteristics were most important for leading digital business initiatives. Among the responses that came up most frequently were transformative strategic vision, a forward-looking perspective, and a change-oriented mindset. Technological skills showed up only as a distant fourth, with less than 20% of respondents classifying technical skills as being important for effective digital leadership. Thus, leaders do not need specialized coding knowledge or knowledge of how to run sophisticated analytics packages to be an effective digital leader. Instead, they must learn to apply their existing leadership skills to a new, more fluid digital environment.
Digital knowledge is not somewhere “out there.”
A striking finding of our previous research was that about 80% of respondents felt that it was important for employees to work for a digitally mature company. This response was surprisingly consistent across age levels, and employees who worked for less-mature companies were more likely to report wanting to leave their companies in the coming years. Yet this desire to leave was almost completely offset when the companies provided employees the opportunity to develop their own digital skills. In other words, what employees wanted most was the opportunity to remain relevant in a digital economy through ongoing skill development. This skill development can take the form of training opportunities or simply the opportunity to work in a cross-functional digital team.
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Where to start?
If digital transformation does not require special knowledge, then what can organizations do to get started?
- The organization must make a conscious effort to transform. Respondents indicate that a major barrier to effective digital transformation is simply that the organization has too many competing priorities. Only by highlighting digital transformation as an effort of paramount importance will the organization prioritize these efforts. Some organizations have even begun identifying a Chief Transformation Officer, who is responsible for spearheading these transformation efforts.
- The time for transformation is now. The gap between digital capabilities and how companies operate is growing wider. If your organization waits until evidence from the marketplace suggests that traditional business models are failing, it may be too late. Just because digital transformation does not require secret knowledge doesn’t mean that such transformation will take place quickly and easily. Digital transformation requires rethinking one’s entire business, step-by-step, from the ground up, over time.
- Don’t transform all at once. Successful digital transformation is not a one-and-done effort. Rather, it requires a flexible mindset and an organizational structure that allows the company to respond to digital trends. As such, digital transformation is an ongoing process. A common mantra of digital transformation is to “fail fast” as your organization experiments with new digital business processes. I would also add “fail small” to this mantra, as small experiments are likely important for developing the knowledge for digital transformation over time and limit the impact of any single failure.
- Start with the pain points. A careful analysis of your organization’s current operations compared with a digital ideal can provide some insight for the most significant barriers to begin working on. It is not sufficient for leaders just to say the organization needs to be more agile. Rather, a careful articulation of how the organization needs to become more agile — and what factors are preventing that agility — is required, as well as concrete interventions to make it happen. You may need outside experts to get the process going, but will to transform must come from the organization itself.
Many organizations want to transform but don’t believe they have the skills and knowledge to do so successfully. Our research, however, shows that successful digital transformation does not require secret digital knowledge. Rather, it simply requires the boldness to recognize that digital transformation is upon us and to begin trying to adapt your business to account for and capitalize on these trends.