According to Forbes, digitalisation projects fail to deliver 84% of the time. Mark Greenhouse, a Contributor on programmes at The Møller Institute, explores what is required of your leadership to ensure that this does not happen to you.
Digitise. Automation. Digitalisation, these words are used interchangeably but they each have distinct meanings and implications. How do the leadership skills your organisations need in 2020 and beyond allow you to leverage them to create value?
Let’s start with what the terms mean
Digitise, the conversion of “analogue” information into data.
These might be your holiday snaps which now sit in the cloud rather than a paper, your new motor insurance contract which is sent as an email attachment rather than a paper document, or the film downloaded in lockdown, no longer a VHS from the rental shop – all items provided in a digital, data format.
Automation, the implementation of technology, using data, to complete consistent processes, quickly, with limited human interference. It can include decision making processes.
As a result of automation we now book seats on flights, set-up Direct Debits, produce sales reports, have machines which monitor patient temperatures and blood pressure without human interaction.
Digitalisation, the term for the social implications of increased computer assistance (from digitised and automated processes) for the economy, society and (organisational) culture.
Digitalisation determines how you, your customers and your suppliers could behave and benefit when faced with this increasingly digitised and automated world.
Digitalisation comes from adopting the technology and adapting the value chain and behaviours. This is what most of us are trying to achieve when we embark on digital transformation projects.
Consider a couple of examples:
- Through the adoption of online ordering digitised and automated processes enable the customer to check reviews, see stock levels, make payments, and track deliveries in real time. The customer is now part of the value chain, not just the final single transaction. The business has outsourced activities (and costs) to you whilst simultaneously driving your engagement in the transaction.
- In a healthcare setting the digitised and automated machines which take blood pressure and temperature release nurses to deliver other value activities with their time. This ensures that these highly skilled and extensively trained team members are able to focus on more critical issues beyond data collection.
This coordination of adoption and adaption requires leadership in two key areas: visibility and vision.
With visibility of its’ total value chain and the underlying processes, an organisation can begin to understand how it delivers and how to do so effectively and efficiently. ‘Visibility’ means sharing data, information and Insights across the whole value chain regardless of whether these are positive or not. This ultimately highlights issues, areas of concern, potential failure and risk – but also opens the door to new opportunities.
Vision is required to challenge the roles, assumptions and activities or processes of an organisation in order to be able to remodel the value chains to produce better outcomes, all along the chain.
To be able to do this, what does this demand of our leadership skills post-2020?
Leaders will recognise that improvements and the benefits of Digitalisation will not come to a single person or organisation, they will come across the whole value chain.
This therefore requires four main areas of critical skills
- Collaboration and engagement
Leaders will lead across multiple boundaries, where they have little or no authority. Engagement and feedback from customers, suppliers, and the wider community (including social media) will be encouraged and utilised. Digitised and automated processes provide opportunities for improvement. Leaders will need the ability to manage the conflict and uncertainty these opportunities create and to support collaboration.
- Systems understanding
The collaboration skill will need to be underpinned with shared knowledge of the total value chain and its processes. Insights will be needed on changes that increase or reduce the performance of the total value chain and the value it delivers. The human interaction with changes will be a crucial component in this knowledge.
- Enablement and empowerment
The breadth of a value chain from suppliers to customers means that leaders should allow for increases in innovative and local decision making. Those carrying out processes should be empowered to communicate and enable improvements, through agile feedback and evaluation techniques.
- Continuous learning
Digitisation allows technology, customer and suppliers to be involved in the value chain, decision making and improvements, in ways we have only just begun to discover. Tasks may be automated or completed by others, taking tasks away from existing staff. We need to focus on continuous learning to ensure this happens, ensuring we adapt and adopt new technologies and that staff can develop new value adding skills and experiences.
Can you create the visibility and vision to let the leadership skills flourish to get you into the 16% of digitalisation projects which succeed? We ignore the role of leadership in delivering technical projects at our peril – it can be the factor to tip the balance of failure and success.
This insight was first featured in our leadership insights magazine Inspire, to view past issues click here.