Leadership in Digital Transformations: How to Manage Change, Expectations, and Results

To stay competitive, it is essential for data-driven companies and enterprises to adapt and implement innovative digital developments into their everyday workflow. Relevancy in a global marketplace is reliant on the execution of centralized digital transformation initiatives. An organization’s digital transformation journey is only as good as its leadership. Business leaders play a much larger role in cementing a profitable digital transformation.

According to Forrester’s 2023 Digital Transformation Services Landscape report, a service provider’s ability to handle both strategy and execution of digital transformation is important for clients. This means that customers are taking notice of a company’s adaptability to the latest digital functionalities that are widely available. Potential clients want to do business with companies that provide their desired products or services and an optimal customer experience through strongly realized digital capabilities. For leaders to effectively grow and sustain a thriving business, it’s vital for them to understand their central role in the transformation process and the tactics necessary for satisfying employees, stakeholders, and consumers alike.

Role of leadership in digital transformation initiatives

Defining what it means for an organization to undergo an impactful enterprise-wide digital transformation is essential. A digital transformation leverages integrated technologies and digital tools to change an organization’s operational workflow and automate business processes, delivering increased value to the consumer and substantially growing the business. It enables an organization to improve communication and collaboration to enhance the quality of the final product or service. While this can be accomplished in many ways to benefit the entire enterprise, it isn’t always a simple task. Changing a business from the inside out isn’t achieved overnight. A successfully transformative journey requires a culture shift that embraces new ways of working together. Because there are so many internal and external moving parts, it is necessary for leadership to drive the ship and guide the journey to its end.

With the leadership team playing a crucial role in the implementation and execution of these tech-driven initiatives, it is vital for them to be aware of some of the best practices and key strategies for achieving a seamless transformation. These include:

• Fostering the growth mindset. For an entire enterprise to be on board with such a fundamental change, leaders need to plant and nurture the growth mindset necessary for executing a large-scale digital strategy. This helps employees fully understand the reasoning behind the process and be ready to grow the organization.
• Informing key parties and stakeholders. Stakeholders are responsible for providing the funds and financial support required to implement these digital tools and technologies. Leadership communicates the complete picture of the transformation journey by conveying what the process entails, how it grows the business, and what consumers can expect from the final product.
• Aligning tech with business strategies. While a digital transformation is enticing, it won’t help a business thrive if it doesn’t align with strategic organizational initiatives. A transformation is intended to aid and enhance processes to achieve established business goals, not change the entire trajectory of a business altogether.

Once leaders understand their integral part in the transformation process, they can realistically define expected standards and take strategic steps toward implementation.

Employee transparency for a customer-centric approach

Whether the intent of digital transformation is to streamline processes or assist with a larger-scale project like leveraging artificial intelligence (AI) or migrating to the cloud, transparent communication is critical. Forbes Council Member Rakesh Soni states, “The leadership practices of CEOs are crucial not just because they have the power to set direction but also because they influence how their teams work together to achieve more significant results.” Enhancing the customer experience and delivering a high-quality product or service benefit from effective organizational communication. This can only be achieved if leaders are transparent about what they want for the business and how they will get there.

As business needs and goals vary for each organization, so should the standards and objectives of unique digital transformations. Effective digital transformations add value to the enterprise by building upon and improving the company’s positive attributes. They are not implemented simply to have the latest or flashiest tech tools. This is achieved when leadership matches expectations with skilled employee talent and then balances those expectations with what can realistically be accomplished digitally. Action without purpose leads to failure and disappointment. CEOs and business leaders use the company’s overarching vision to drive a successful transformation and include a clearly formed and communicated strategy for adopting these new technologies and processes.

Optimizing the transformation journey

According to McKinsey & Company, while 89 percent of large companies globally are undergoing digital and AI transformations, they have only captured 31 percent of the expected revenue lift and 25 percent of anticipated cost savings from these efforts. Optimizing the benefits of an effective digital transformation initiative demands the seamless adaptation of tech developments and integration of strong key performance indicators (KPIs) to monitor growth and success. This also means being aware of common transformation challenges and avoiding crucial missteps. These can include hesitant decision-making from leaders, resistance to change from employees, and misalignments between leaders and their skilled teams in driving change toward a common goal. Many of these challenges can be overcome or avoided through clear communication, strategic decisions, attainable goals, and a mindset open to growth through change.

Optimizing a digital transformation to meet strategic initiatives while satisfying employees and stakeholders means supporting successes with factual evidence. Numbers and statistics are necessary for effectively tracking organizational benefits. This is attained by using strong KPIs for quantifiable metrics, including:

• Productivity metrics. Monitoring the productivity of a complete digital transformation means understanding its entire lifecycle, including the time it takes to complete each stage in the process. This garners awareness of employees’ efforts and gauges skill gaps to create a faster time-to-market.
• Usage metrics. Installing a legacy tool allows leaders to determine how long it takes employees to complete a task or project utilizing the previous systems and compare this with the new and innovative digital tools and technologies implemented in the transformation. This can prove the benefits of streamlining and automating business processes by demonstrating how much easier and faster work was completed after the transformation, which is key for stakeholders.
• Quality metrics. If the quality of a product or service is not enhanced for the customer, a digital transformation cannot be expected to grow and improve a thriving organization. Assessing the quality involves customer satisfaction, valuable input from loyal customers, difficulty levels, and overall velocity of the production lifecycle.

Future of business leadership and digital transformation

Organizations worldwide are experiencing the benefits of various digital transformation initiatives. A notable example is Domino’s Pizza and its implementation of master data management (MDM) software to match, validate, and enrich customer data, opening the door to cross-channel marketing and cross-sell and upsell customer opportunities. MDM also enabled Domino’s to ensure secure and trusted data across multiple data warehouses and systems. The most significant trend shaping the digital transformation landscape is the explosion of AI and machine learning (ML). This ties into an increased focus on cybersecurity as private or sensitive data becomes more accessible. While the industry is currently experiencing a major AI and ML-centric shift in digital transformations, it is vital for business leaders to prioritize data quality and security while gaining a complete understanding of their customers.

The future of digital transformation and the integral role of leadership within the process show massive potential while remaining somewhat unclear. Business leaders are the foundational support that drives digital transformations to a successful completion. They are responsible for creating an environment based on a growth mindset open to technological change and new ideas that align with strategic initiatives. To accomplish this, it is critical for leaders to have a deep understanding of the business and its specific needs and how to convey transformative methods convincingly to stakeholders to ensure proper resources and funding. Just as a ship cannot reach its destination safely without a skilled captain at the helm, a growing business requires proper guidance from strong leadership to ensure a seamless and beneficial transformation journey.

About the Author

Kamala Manju Kesavan is a seasoned leader in digital transformation with over two decades of expertise in enterprise software implementation. Specializing in technology solution strategy, software development, QE, test automation, and DevOps, Manju also excels in software engineering, program delivery, testing automation, and software development lifecycle (SDLC) methodologies. Manju holds a master’s degree in cloud computing architecture and is certified in PMI-ACP, CSM, and DevOps. For more information, contact kamalamanju@gmail.com.