How 2 Lead Your Organization’s Digital Transformation
As a result of the COVID-19 crisis, many entrepreneurs have faced difficult pivots over the past few months as they adapt to new social distancing regulations and the changing needs of their customers. One of the biggest trends is the shift online, as more businesses that would not have considered themselves “tech companies” before are now increasingly dependent on the internet to support internal operations and serve their customers. During a virtual How 2 Tuesday talk this spring, Babson Professor Ruben Mancha offered his advice for businesses transitioning to today’s digital business landscape. Here are our favorite takeaways from How 2 Lead Your Organization’s Digital Transformation.
Digital Leadership: According to a McKinsey survey, just 16% of digital transformations resulted in actual performance improvements for organizations. But of the companies Professor Mancha has studied, digital leadership was a key differentiator during successful digital transformations. His framework for digital leadership is focused on three key elements: vision, process, and values. According to Professor Mancha, “Most of the discussion has been around process, but there’s a lack of focus on vision and values.” As an example of a company which succeeded by integrating their vision and values into their digital transformation, Professor Mancha shared an excerpt from a 1999 letter to Amazon shareholders. Two decades before they’d become the ubiquitous tech giant they are today, Jeff Bezos clearly articulated Amazon’s guiding values (“listen to customers, invent on their behalf, and personalize the store for teach of them”) and vision (“our vision is to use [the Amazon.com] platform to build Earth’s most customer-centric company”).
Case Studies in Digital Transformation: Aside from Amazon, many companies across a range of industries have successfully undergone digital transformations. Professor Mancha shared three businesses as case studies:
- BP is using cloud computing, analytics, and machine learning to optimize their extraction of oil and reduce anomalies which could lead to environmental damage. Professor Mancha views this as an example of digital operations, which is when an organization is able to optimize key business processes through digitization.
- Lufthansa is implementing agile development and predictive analytics to create an increasingly personalized customer experience for their airline passengers. Professor Mancha sees Lufthansa’s strategy as digital relations, which is when an organization collects extensive data to improve the experiences of customers, employees, and business partners.
- Philips Healthcare is creating a versatile digital platform to connect health and wellness providers to their patients through the cloud. Professor Mancha says that Philips is harnessing the power of digital networks, which is when an organization uses digital connectivity and technology to exchange maximum value within their business and with their partners and customers.
While these case studies represent excellence in different aspects of digital transformation, Professor Mancha notes that many businesses can succeed by implementing combinations of digital operations, digital relations, and/or digital networks.
The Importance of Vision: With an ever-growing abundance of technologies available to businesses today, what is the right approach to digital transformation? Professor Mancha concluded his talk by sharing the following steps towards creating a clear vision for your venture or organization’s digital transformation:
- Identify Your Starting Point: Before anything else, Professor Mancha says that organizations should pick one key area to focus their digital transformation efforts which best aligns with their competitive advantage.
- Assess Your Capabilities: Organizations should then honestly evaluate their existing digital capabilities. Professor Mancha reminded us that this includes assessing not only technology already in use, but more importantly the organization and employees’ readiness and ability to embrace new technology.
- Envision Your Opportunity: Digital transformation has the potential to impact many areas of your organization, and Professor Mancha encouraged us to think about how the early stages of transformation can influence an agile and innovative digital strategy in the long run.
We hope you enjoyed these tips from Professor Mancha! To learn more about his academic research and courses at Babson, visit his faculty profile at this link. For the latest news and more events from the Blank Center, follow Babson Entrepreneurs on Facebook and @babsoneship on Instagram.