Posted: 16 Nov. 2022 8 min. read

Lead digital transformation from the top

A blog post by Diana Kearns-Manolatos, senior manager, Center for Integrated Research, Deloitte Services LP; Brenna Sniderman, executive director, Center for Integrated Research Lead, Deloitte Services LP; Tim Smith, principal, Tech Strategy & Business Transformation Leader, US Monitor Deloitte

Digital transformation may be a buzzword, but it’s the lifeblood of any company that wants to handle disruption and meet competitive challenges more effectively. Everyone has a unique definition of digital transformation, but it typically involves implementing new tools, platforms, and business models to enable competitive differentiation. Figuring out their exact roles in digital transformation and where they should be focusing are a few among the litany of problems today’s leaders are confronted with while on the journey to transform the digital core of their businesses.

A recent analysis by Deloitte, “How the CEO’s leadership in digital transformation can tip the scales toward success,” examines the role of leaders in guiding their company’s digital transformation journey. The research analyzes the CEO’s important role in setting the organization’s ambition and assessing readiness. Our Deloitte Insights article “How to lead digital transformation from the top” offers a glimpse into the critical measures leaders should take to fulfill their organizations’ digital aspirations, as well as the extent of change required to do so.

Three powerful leadership truths: Lessons from experience

Executives can provide invaluable guidance and act as champions throughout the journey, but they often delegate much of the day-to-day leadership. However, disruption to the business environment—such as a new competitor entering the market—can cause even the best-laid plans to go awry. So, it’s essential that leadership stay actively involved and provide firm guidance throughout the transformation journey.

Following are three powerful truths that experienced leaders have learned that could become a mantra to increase the odds of digital transformation success.

Truth No. 1: Every digital ambition, big or small, requires active leadership.

The process of digital transformation is often perceived as a spectrum with digitization on one end and full-scale transformation on the other. Strong leadership is particularly important when digital ambitions are inclined toward full-on transformation. However, not every organization is keen on a complete transformation. Rather, they are focused on catching up with the competition or growth strategies. Even so, leadership guidance is still crucial.

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There are three essential components to an effective leadership role:

  1. Champion the project, keep the team’s spirits up, and spearhead their path to success, so the team and project can reap the rewards. Good leaders also remove roadblocks to smooth the journey.
  2. Whether it’s a digitization effort or full-blown transformation, leaders should educate the organization about the effort’s long-term benefits.
  3. Digital transformation should never be sidelined. Instead, leaders should make sure that people understand the critical role they play and have ownership of their part in the effort.

Truth No. 2: Leadership involvement should increase with transition, and change management should be a primary focus.

Large-scale digital transformations often stem from a dire need for change. There will always be obstacles to success, including, for example, a lack of readiness for transformation. In fact, when the organization isn’t ready for change is when the leaders’ roles are most significant, and their involvement needs to increase. Even if they’re unsure of their leadership capability, leaders should be steadfast in meeting challenges with clear-cut strategies that will bolster the transformation.

There are five key elements to successfully drive change:

  1. Tell a good story. Create a vision for transformation, explain the motivation for the change, and communicate the benefits of digital transformation. Lead from the top; don’t delegate the storytelling to marketing.
  2. Align change and incentives. Find out what incentivizes people, and use that knowledge to motivate the team to succeed. Whether it’s financial incentives—like stock options, bonuses, etc.—or personal goals, such as making their mark on the organization, proper motivation can go a long way in achieving success. Liberating team members from fear of failure can also work wonders. If employees aren’t scared to fail, they’ll dare to succeed.
  3. Accept the weaknesses exposed by the transformation journey. Accept that weaknesses exist, think critically about how to address them, make a plan, and implement it. Will there be short-term disruptions? Sure, but the long-term gains should outweigh them.
  4. Feed on optionality. Disruption will continually confound strategy. So, plan for it, embrace it, and make optionality part of the digital transformation plan. It’s also crucial to build an organizational culture that can capitalize on the available options. The goal is to instill an evolution-oriented mindset to stimulate ongoing innovation.
  5. Pass on a legacy of leadership. Chances are that the digital transformation will be long-lasting and will outlast the current leadership team. So, the goals should be to help the organization evolve (even after the leader leaves) to ensure that the transformation survives disruptions and change and that the vision lasts longer than any leader’s tenure.

Truth No. 3: Good leaders find new opportunities for innovation and growth.

No matter how digitally savvy an organization is, it still needs strong leadership, specifically regarding strategy, innovation, and growth. If left unattended and not nurtured, even the best digital transformation strategy can fail, and growth and innovation can stagnate. So it’s essential for leadership to constantly find new opportunities for innovation and growth. It’s also critical to find new ways for technology to help meet competitive threats now—and in the future.

Take the lead

Every digital transformation initiative will be as different as the organization that undertakes it. However, no matter the size, structure, motive, or goals, one thing is common to all digital transformation initiatives: They need effective leadership involvement. Leaders should be the champions and primary drivers of transformation, and they should be personally involved in the effort, to the extent that strategy and tactics dictate. In a market that’s increasingly driven by disruption, innovation, and technology, digital transformation success is just too critical to delegate. To succeed, take the lead.

To learn more, read the full article, “How to lead digital transformation from the top".

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Diana Kearns-Manolatos

Diana Kearns-Manolatos

Senior Research Leader, Technology

Diana Kearns-Manolatos is a senior manager with the Deloitte Center for Integrated Research where she leads Deloitte’s global research on digital transformation.

Brenna Sniderman

Brenna Sniderman

Executive Director | Deloitte Services LP

Brenna Sniderman leads the Center for Integrated Research, where she oversees cross-industry thought leadership for Deloitte. In this capacity, Brenna leads a team of researchers focused on global shifts in digital transformation, trust, climate, and the future of work; in other words, how organizations can operate and strategize in an age of digital, cultural, environmental, and workplace transformation. Her own research focuses on connected digital and physical technologies and their transformational impact. She works with other thought leaders to deliver insights into the strategic, organizational, leadership, and human implications of these technological changes. Prior to joining Deloitte, Brenna was a Senior Director at Forbes Insights, the thought leadership division within Forbes Media, where she oversaw and conducted primary cross-industry research on topics such as innovation, technology, transformation, Big Data and privacy/security, philanthropy and talent management. Her research focused on primary qualitative and quantitative research among senior-level executives at some of the world’s largest organizations, and Brenna worked closely with clients to select appropriate research topics, develop hypotheses, and design methodologies to conduct research to test them. She also oversaw analysis of data and development and publication of white papers, infographics and other tools. Brenna has traveled and spoken on topics such as trust and ethics, Industry 4.0, and smart factories. Brenna’s research is available on Deloitte Insights, MIT Sloan Management Review, and, among other publications. Brenna received her Bachelor's degree in Economics from the University of Pennsylvania. She earned her Master’s degree in Strategic Communications from Columbia University. Brenna lives just outside Philadelphia with her husband, twin sons, and dog.