We are all activists
By changing our perspective from, âSomeone should do something about this to âIâm going to do something about thisâ, we can all be activist leaders, Lucy Parker â co-author of The Activist...
- YouTube
15 December 2021 ⢠by Didier Bonnet, Michael R. Wade, Tomoko Yokoi in Library
Expert advice for tackling the shortcomings in digital business model transformations...
Most business leaders recognize the need to transform their organization using digital technology, a need thatâs been heightened by COVID-19. However, very few organizations will ever pull off a successful digital transformation.
Up to 90% of these change programs will fail. But itâs not because of technology, itâs more because of people, processes and culture. Based on interviews with 200 digital leaders carried out by IMD professors Michael Wade and Didier Bonnet, along with the researcher Tomoko Yokoi, we know the problem is usually a failure of execution.
The trio of experts hosted a recent I by IMD Book Club discussion about their new book, Hacking Digital, which offers solutions to the most common digital transformation challenges. A fourth co-author is Nikolaus Obwegeser.
Finding enough digital talent is one key issue that participants in the webinar raised. âHowever successful a firm is at digital transformation, at some point they will hit the digital resourcing problem,â said Bonnet, Affiliate Professor of Strategy and Digital Transformation. âYou need to work closely with human resources to make sure there is forward visibility of the kind of capabilities you need, and that theyâre being introduced in the organization.â
His co-author Wade said digital business model transformation cannot be achieved in organizational silos. âThat is one of the reasons why the failure rate is so high,â said Wade, Professor of Innovation and Strategy. âThe benefits you get from data and technology are horizontal and are amplified by width across an organization. In a silo you get limited benefits.â
A good place to start is to have a clear and common objective. You also need to look at incentives, and make sure they are aligned across the business. âPeople are smart, they understand motivations, they can maximize their own utility,â said Wade, who directs IMDâs Global Center for Digital Business Transformation.
The role of governance is to provide this unified approach to delivering your transformation. âWhen you donât have governance, you get a duplication of effort,â Bonnet said.
There is no âsilver bulletâ solution: the level of governance will depend on your digital ambitions, your company culture, and the level of resource-sharing required. But hybrid models â that balance centralization and devolution â tend to work the best. And you cannot leave governance to chance; it wonât occur naturally. âItâs not the most sexy thing but governance is where I see the clearest link to profitability,â said Bonnet.
Many organizations will appoint chief digital officers to lead the transformation effort. But a big challenge is how digital leaders can establish and maintain credibility, in a very limited timeframe. IMDâs research shows that most people who are appointed in senior digital leadership positions have a rather short tenure, on average just over 2.5 years.
âItâs not only about having digital competencies, but also having those interpersonal skills and the ability to lead across an organization,â said Yokoi, an IMD researcher and senior business executive with expertise in digital business transformations. âClarifying scope and responsibilities upfront is important. A mandate to lead digital transformation is usually very ambiguous.â
She said it was important to communicate your strategic intent. This will give people the chance to share their input, and give you an opportunity to build trust in the organization.
Wade said the failure to scale is a big obstacle to digital business model transformation. Many organizations struggle to scale up initiatives because of issues in data gathering, an excessive focus on the technology, changes in priorities, and flaws in strategy.
A shortage of talent acts as another constraint on growth. âAnd we canât overlook budget issues,â said Wade. âOften, pilots get funding but who is going to pay for it as the project scales?â
He said you have to think big from the start: plan to scale and understand the limits to growth early on.
To do this, avoid the âcut and paste trapâ, or the temptation to translate a successful project to a new business area or geography. This wonât work unless you adapt the successful project to the local conditions and rules, said Wade: âMake a very clear distinction between whatâs core to the solution, and the elements that are modifiable depending on the context.â
The IMD expert added that a business ecosystem â a dynamic, interconnected network of suppliers â will play an important role in digital business model transformation. Thatâs because ecosystems can promote scale through the exchange of information across the value chain.
To really reap the benefits, Bonnet said webinar participants should treat ecosystem partners like an extension of the organization rather than just suppliers: âThis is a mistake that we see made quite often.â
Professor of Strategy and Digital Transformation
Didier Bonnet is Professor of Strategy and Digital Transformation at IMD and program co-director for Digital Transformation in Practice (DTIP) and Leading Customer Centric Strategies (LCCS). He also teaches strategy and digital transformation in several open programs such as Leading Digital Business Transformation (LDBT), Digital Execution (DE) and Digital Transformation for Boards (DTB). He has more than 30 yearsâ experience in strategy development and business transformation for a range of global clients.
Professor of Innovation and Strategy at IMD
Michael R Wade holds the Tonomus Professorship in Digital Business Transformation and is Director of IMDâs Global Center for Digital Business Transformation. He directs a number of open programs such as Leading Digital Business Transformation, Digital Transformation for Boards, Leading Digital Execution, and the Digital Transformation Sprint. He has written ten books, hundreds of articles, and hosts a popular management podcast. In 2021, he was inducted into the Swiss Digital Shapers Hall of Fame.
Researcher, Global Center for Digital Business Transformation, IMD
Tomoko Yokoi is an IMD researcher and senior business executive with expertise in digital business transformations, women in tech, and digital innovation. With 20 years of experience in B2B and B2C industries, her insights are regularly published in outlets such as Forbes and MIT Sloan Management Review.
29 March 2024 ⢠by Heather Cairns-Lee in I by IMD Book Club ⢠7 min read
By changing our perspective from, âSomeone should do something about this to âIâm going to do something about thisâ, we can all be activist leaders, Lucy Parker â co-author of The Activist...
29 January 2024 ⢠by Katharina Lange in I by IMD Book Club ⢠9 min read
A new book by Dovev Lavie, Professor at the Department of Management and Technology of Bocconi University, sets out an extraordinary plan to tackle urgent social problems of inequality, wealth concentration, loss...
1 December 2023 ⢠by Albrecht Enders in I by IMD Book Club ⢠10 min read
Organizations of every size and shape today know itâs crucial to bridge the gap between innovation and execution â but itâs a hard feat to accomplish and very often they get it...
19 October 2023 ⢠by Faisal Hoque in I by IMD Book Club ⢠8 min read
In this monthâs I by IMD Book Club, best-selling author Faisal Hoque explains how the concepts in his new book, Reinvent: Navigating Business Transformation in a Hyperdigital Era, can help us...
Explore first person business intelligence from top minds curated for a global executive audience