A Digitization Manual

There is no escaping digitization. But how exactly can the first steps in the right direction be taken? Barbara Stöttinger, former Dean of the WU Executive Academy, looked more closely at what really matters in practice.

Just as the binary system, which is the basis of digitalization, uses only the digits zero and one, there are only two states in the context of digital transformation: joining in or staying out. By now, all businesses are perfectly aware that digitalization is essential, regardless of the industry. The problem, though, is this: While there are forecasts and grand announcements galore, a lot remains to be done when it comes to actually putting theory into practice. A worldwide study carried out by the management consultancy Bain has found that currently only five percent of businesses are achieving the digitalization targets they set for themselves. Not really knowing what do to, many fail to take action, which occasionally results in dramatic delays and shakes even established players.

So, what are the things that really matter in the context of achieving digital transformation? In the following article, Barbara Stöttinger, Dean of the WU Executive Academy, offers businesses five key tips that they should follow in order to transition successfully into the digital age:

1. Think big

Where exactly shall we start? It is not uncommon for businesses to run a host of individual projects to find answers to this question. However, according to Barbara Stöttinger, such a strategy of small steps is anything but ideal: “Digitalization is about building competencies as well as infrastructures, and taking small steps is synonymous with making slow progress. In this context, building competencies typically refers to process management methods; as for building infrastructures, it is vital to harness the potential of novel IT solutions,” explains Stöttinger.

Conclusion: Rather than being addressed in the context of small-scale individual projects, digitalization must be made an integral part of the corporate strategy, which, in turn, can then serve as a basis for developing a detailed action plan that focuses on the business as a whole.

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^{Digitization has to be implemented as part of the corporate strategy - small and seperate steps will not lead to success. Photo © CC0 Licence}

2. Do the right things instead of doing things right all the time

Digitalization is not a project but a process — understanding this is crucially important because it sets the scene for the process of rethinking. That said, businesses are frantically looking for tools that enable them to achieve digital transformation quickly, as the concept of agile management, which is extremely popular these days, perfectly illustrates. Yet, individual tools should not be the starting point for digital transformation:

Businesses cannot be agile unless they have put in place an IT infrastructure that allows for useful abstraction and quick adaptation to changing realities. Barbara Stöttinger, Dean of the WU Executive Academy, agrees, pointing out that making indiscriminate use of modern tools such as Scrum is thus the wrong strategy. “What really matters is to not just make a tool available but to also explain what you can and should do with it.”

Conclusion: Tools are always a means to an end and never a magic cure. Hence, a thorough analysis of all corporate processes is needed before the digitalization tools that best fit in with the current structures and processes can be selected.

3. Usher in cultural change

The management pioneer Peter Drucker already identified corporate culture as an indispensable breeding ground for corporate strategy - it provides the framework for success and innovation. Therefore, you also need to focus on corporate culture if you want to be perceived as a digital trailblazer. “If the right mindset is lacking and management fails to clearly communicate expectations, a lot of the efforts that are being made will bear no fruit.

Conversely, if you manage to fill people throughout the organization with enthusiasm and get them on board, you create an environment conducive to digital transformation,” explains Barbara Stöttinger. After all, pulling in the desired direction together is the key to success when it comes to going digital. “The goal of a successful transformation must also be to make processes in the organization simpler, more transparent and more efficient, and not just to digitalize existing processes,” says Stöttinger.

Conclusion: For digital transformation to succeed in a corporate setting, cultural change needs to get at least as much attention as the digitalization process itself.

4. Unlock potential

Digital transformation is also about proactively supporting employees when it comes to thinking in terms of opportunities and keeping the big picture in mind.

Conclusion: There is a new dimension to successful leadership: The more we take care of our employees, the more they take care of our clients — and business success takes care of itself.

5. Set up signposts

Delegating responsibilities, allowing mistakes to happen and giving people greater latitude - digitalization requires us to do some radical rethinking. However, providing employees with the necessary freedom of action and plenty of room for experimenting is only one side of the digitalization coin: At the same time, employees need clear guidelines that they can use as yardsticks. They also need to have a good understanding of the broader corporate context: current business processes, the system landscape, the budgetary situation, etc.

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^{Clear guidelines and rules - it is important to set up signposts to successfully promot digitization. Photo © CC0 Licence}

Conclusion: In order to be able to act creatively and try new things, you have to understand the big picture and need to know where the (entrepreneurial) journey is supposed to take you. Hence, it is important for leaders to give direction and act transparently.

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