Digital Transformation is a Must Have for Every Company

Today many managers and organizations are talking about digital transformation. A digital transformation strategy must be based upon on Purpose, Values, and People, but basically, it is the changes associated with the application of digital technology in all aspects of human society. About digital transformation, we talked with Ira Kaufman, a professor at Lynchburg College School of Business and Economics. Professor Kaufman is the author of the program Digital leadership for digital transformation.

You were the keynote speaker at the Digital Transformation Initiative (DTI) presentation and announcement.  Your presentation was mostly on Digital Leadership and your experiences as a consultant for enterprises all over the world. What are the most valuable experiences from these programs?

I've seen that executives across the world acknowledge the need to transform their organizations and develop a digital mind. Here are five observations:

They have difficulty in focusing on adopting and clarifying the purpose of their organization.

They agree upon their core values but do not translate and incorporate them into all aspects of their company’s operations.

They see that “digital“ is about technology; they need to understand digital as it pervades all functional areas of their organization.

Senior executives experiencing our digital transformation workshop quickly realized that transformation in their existing organizations would take 18 to 24 months to adopt a digital mindset and culture of continuous innovation.

Many executives want a high velocity, a rapid response which will entail creating a new organization free of the old organizational culture and constraints. This transformative organization will allow them to respond quickly to opportunities and adapt to the changes in the marketplace.

Today everyone talks about the importance of education in our life and society. Why is that so? What kind of education and skills is needed mostly for Digital Transformation of an enterprise?

Education goes back to how we learn as children. Our current educational systems teach us to learn by rote—to memorize and “regurgitate“ information. Information is not learning how to think, innovate and troubleshoot. Students need to learn from an early age the mental agility needed for the rapid changes they will face. This needs to be one of the top educational priorities.

The importance of education in the current business environment is driven by the lack of digital preparedness. Many studies of global executives cite some 80% of executives acknowledge the importance of digital as a strategic priority as it will change their company in the next year. But some 50% of them say they have a digital strategy but don't have the staff with the skills to execute the strategy and less than 50% have begun a transformation process.

In the UK and the United States alone there's projected need for 1.5 million digital marketing managers in each country by 2018. The European Union projects the need for more than 800,000 digital professionals and 200,000 e-leaders by 2020.

Leaders and managers must transition their thinking ---from an incremental (step-by-step) approach to a transformative (exponential) approach to continuous rapid innovation.  The skill sets required to prepare leaders for digital transformation require education in eight major areas; transformative leadership, digital mindset, customer-centric experience, agile organizational structure, connected business models, rapid innovation, data-driven decision making, and quadruple bottom line with sustainable outcomes.

Digital Transformation Initiative included several white papers. How do you see the impact of these papers for different members of 5-Helix (university, public sector, business, media, knowledge society)?

Two white papers addressed critical issues facing the Croatian business community including establishing a culture of innovation and the need for new business models. Croatian businesses much transform to become more entrepreneurial, agile, risk-taking more flexible. They must embrace rapid innovation as integral to their corporate strategy. Innovative thinking will attract Millennial Croatian talent and new sources of investment.

A second white paper focused on new business models.  It addressed the need for Croatian businesses to anticipate and incorporate digital technologies and mindset to respond with new business models to leverage unprecedented opportunities. These “business models“ are transformative and required for innovation for all members of 5-Helix.

Practical learning has become very important today, but we also shouldn't ignore the importance of theoretical education. What would be the ideal combination of these two types of education? What's the best way to set a balance between both of them?

The business community needs new theoretical constructs and models to guide the transformation process. These models need to be tested, refined and applied quickly for companies to be responsive and become transformative. The traditional business is transitioning from incremental change to scaling exponential disruption. Models need to reflect that transformation with practical applications.

How can public sector participate in digital transformation processes? That is a big challenge for everyone, especially for our public sector.

The public sector, in many ways, is not different from the business community expect that the targets, goals, and decisions are different. Citizens and public employees need to be engaged and listened to in a responsive fashion. Political leaders must revisit how they create value and generate innovations at each stage of the value chain for their communities, and country with regard to health, education, transportation, security, commerce, environment, energy, etc.  Their goals must be sustainable addressing the needs of all stakeholders-- citizens, workers, businesses, investors, and communities.

Digital transformation requires specific knowledge. Could you tell us more about the type of knowledge needed for this process? What is important to know while creating a strategy for digital transformation?

A digital transformation strategy must be based upon on Purpose, Values, and People. It begins with leadership defining the WHY, the sustainable Purpose of the organization. Defining and gaining agreement on the organizational Values second. They define the culture that provides the context and standards that all operations need to reflect. People (both customers and employees) need to be listened and responded to.

These create the foundation for the Digital Transformation Strategy. Each strategy/tactic must create value at each stage of the customer decision process generating sustainable outcomes for each of the stakeholders.

Finally, for the Digital Transformation Strategy to be successful, it needs to be executed with agility and openness to the dynamic changes in the marketplace.

How would you, in short, describe a process of digital enterprise transformation roadmap for typical Croatian company?

There are 12 guidelines for digital transformation:

Transformative WHY drives engagement

Actively Listen to each touchpoint

Culture/mindset eats strategy

Embrace ongoing disruption as an asset

Rivet on the end-to-end customer experience

Consistent values generate advocacy

Innovate at each stage of the supply chain

Target data to drive decision-making

Be agile and open to change in your execution

Facilitate cross-generational and cross-functional collaboration

Create shared value for all stakeholders

Transformative impact (10 X) replaces incremental growth (+10%)