Are You Ready for Digital Transformation?

Artificial intelligence, industry 4.0 and cloud computing are just some examples of new technologies that have completely changed our ways of working, communicating and interacting with one another. Given the ever-increasing degree of digitalization, there is hardly any business or industry that is not massively affected by this transformation: Organizational structures, value chains and entire business models have fundamentally changed. The viability of businesses depends more and more on how well they manage to adapt and respond to these changes. What special skills do executives need in a digital world, and is there a suitable formula for achieving successful digital transformation?

In the following paragraphs we explore these questions in greater detail.

The days when executives would wonder whether their businesses would be affected by digital transformation are gone once and for all. A recent survey carried out by WU Vienna among 2,800 top managing directors in Austria and Germany revealed that 77% of them consider digitalization to be by far the most significant trend that has an effect on their businesses. So today, every executive is by definition a digital executive. The crucial question for the future of businesses will be: How can they transform into “digital enterprises” in as quickly and as efficiently a manner as possible?

The key to answering this question is digital leadership. And digital leadership can be learned, even by those who do not belong to the generation of digital natives.

In order to get a detailed understanding of current challenges such as digitalization, globalization, demographic change and technological advances, we had countless discussions with experts and our clients. This has allowed us to identify three skills that eve.ry digital executive needs to have. Think of the concept as a pyramid.

©WU Executive Academy

• To begin with—and this is the base of the pyramid—, executives need to develop a strategic understanding of the new rules of the marketplace, i.e., they have to understand what economic trends are the drivers of digital transformation and what dogmas and familiar laws of business must altogether be called into question.
  

• The next step focuses on 360-degree leadership. In particular, it is about providing young, creative and digital experts, who serve as reverse mentors, if you like, and the traditional and established management team with flexible day-to-day leadership in an organizational environment marked by openness. In times of considerable uncertainty and change, businesses need to implement special forms of organization and special ways of doing things that enable them to focus on their clients and operate in a highly interconnected, agile and experimental manner.
  

• At the top of the pyramid, we find innovation and strategy: How can executives make sure business models are developed in ways that ensure not only long-term profitability but also that clients constantly interact with the organization via digital touchpoints and that products and services are developed jointly through a process of co-creation?

Today, all executives know that digital transformation affects their organizations. What the WU Executive Academy places particular emphasis on during its programs, which also address the issue of digital transformation, is how to achieve it in practice. In collaboration with Austrian digital leadership expert Martin Giesswein, it, therefore, recently launched an eight-step program designed to guide executives through the transformation process.

“First of all, there needs to be awareness on the part of executives regarding the transformation (1). Why is it necessary for the organization to change, and where should it be heading? The next step is scenario building (2), i.e. using different methods to make the effects of the shift in technological and economic paradigms tangible, and putting the strategy into context (3): Is the chosen transformation process perfectly in line with the corporate strategy? After this, corporate venturing (4) aims to bring innovation to the organization, for instance by involving start-ups in the transformation process. Of course, the organization also needs to undergo technological (5) and cultural (6) transformation, which is undoubtedly the biggest challenge. The transformation to a digital organization cannot succeed unless the process is accompanied by ongoing internal and external communication (7). Throughout the transformation journey, there is an iteration cycle: All steps are repeatedly reevaluated, and at the end, a final overall review (8) is held.”

These eight steps have proved a successful formula for enabling executives to achieve digital transformation in their organizations within 12 months.

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