There’s more to a digital transformation than you may think… much more

The notion of companies undergoing a “digital transformation” is a hot topic in many organizations. A digital transformation is the process of connecting with customers through some sort of digital means, like a portal or a mobile app. These initiatives seem to fall into one of two different categories, both of which have significant implications for leadership. One category of efforts takes the transactional approach and the other takes the transformational approach. In the transactional approach to “digital transformation” the organization takes its existing products or services (external or internal) and creates an online solution – for people to access company information or products. It is not really a change in the business, just a change in how the business is presented to customers and employees – sort of like an online catalogue of existing products and services. Here, the leadership within the company is trying to do the minimum amount possible to be digital without disrupting their world. This approach is perceived as the modern way and is expected to reduce the costs of sales as well. With the transformational approach, leadership is recognizing that digitization is inherently disruptive and is treating the market pressures as an opportunity to improve. Here leadership will look at the idea of digital transformation as an opportunity to re-think and transform their entire business. The executives, will ask themselves, “Is the digital customer a different customer?” “Does the digital customer need a different selling and ordering process or entirely new and different products and services?” These questions are known as the “transformational questions.” In our experience working with various companies we have found that asking such questions will inevitably lead to a thoughtful and positive restructuring of their entire business. The transformational questions recognize that a digital transformation is a profound business re-structuring and that change entails not just presenting current offerings in digital form. In earlier blog posts, we have discussed the contrast between transactional and transformational leadership as the difference between being driven by daily metrics versus looking ahead to sweeping changes in technology and the market. Here we are using the distinction to highlight the differences between transactional response to pressures to digitize and transformational response. At Cerebyte, we believe that the transformational approach is by far superior. However, there is one thing to keep in mind: New opportunities are often less profitable and more demanding of the organization, which can threaten revenue streams, thereby making transformational leadership challenging. A great leader would be up to this challenge. After all, technology cannot be denied. You have two options—think transformationally and restructure your business to compete in a new world in order to stay relevant or eventually fade away. If you’re up to the challenge of becoming a transformational leader, contact us here: [email protected]]]>