Our
thinking

The Skill that Will Make or Break Your Digital Transformation

Jan 16, 2018

The Skill that Will Make or Break Your Digital Transformation

For the first few decades of it’s inception, adoption of digital technologies was mostly about scale and efficiency. Companies brought in tools to get more done – faster and cheaper. Through the process they created tremendous performance gains but there are limits. Many organizations have been hitting them for a while:

  • As you reduce waste, the incremental return on each additional technology investment diminishes.
  • The competitive advantage for first movers also disappears as your industry advances along the adoption curve.
  • In many cases, digitization actually hardened organizations to change, as existing processes became hard-coded in expensive legacy systems.

Today the talk is about Digital Transformation – using technology to enable new ways of working, new business models and new higher-value offerings for customers. With all the buzz, it may be tempting to think that your company could achieve these transformations simply by bringing expertise in house on the latest technologies like AI, Blockchain, or Data Analytics, but it’s not that simple.

Technical expertise is important, but it’s not enough. These new technologies will only produce temporary gains if we only apply them to existing processes. The trick is using technology to enable the organization to work in new ways. That requires leaders who can engage people across the extended enterprise to connect and collaborate.

But don’t just take our word for it:

  • In a recent McKinsey study, the top barrier executives cited to meeting digital priorities was “cultural and behavioral challenges”.
  • In a white paper on digital innovation, Cognizant declared, “Digital Is — Surprise! — More About Humans than Machines”.
  • MIT and Deloitte found that “Soft skills trump technology knowledge in driving digital transformation” as respondents to their 2017 study and rated vision, mindset, and collaborative skills as critical skills for leaders to succeed in a digital workplace.

In our experience working with global companies, the ability to have honest and productive conversations is the linchpin of effective leadership. Here are four ways effective conversations can enable your digital transformation:

  1. No Collaboration Without Conversation

People can’t work together if they don’t talk to each other. It’s an unavoidable fact, and the need to work together has never been greater. A study published in Harvard Business Review  found that “the time spent by managers and employees in collaborative activities has ballooned by 50 percent or more’’ during the past two decades – and it’s no wonder, as organizations work to integrate capabilities, sell higher value solutions, and present one face to the customer. For your digital transformation to succeed, you need to create a lot of new conversations including across internal silos, with customers and with your vendors and business partners.  The quality of those conversations is going to drive your results. If leaders aren’t equipped to convene and foster collaborative conversations, you’re sunk. If they are, you can unlock digital’s potential to enable new ways of working and unlock new value for the business.

  1. Conversations Build Trust

Transformation always creates uncertainty and a degree of fear. People want to know where the organization is headed and how things will play out for themselves and their teams. That uncertainty translates into a variety of defensive behaviors that can block change. At the same time, research suggests a certain kind of psychological safety encourages employees to experiment, challenge the status quo, share information and support one another. Those behaviors are critical to achieving transformation.

Trust in effective leadership can help organizations manage this tension between uncertainty and safety. Unfortunately, trust is at historic lows. The 2017 Edelman TRUST BAROMETER revealed the largest-ever drop in trust across the all types of institutions. CEO credibility specifically dropped 12 points to an all-time low of 37 percent.

In order for your digital transformation to succeed, your leaders need to work on trust. That starts with honest conversations that acknowledge the real issues and provide a space for legitimate concerns to be raised. It continues with ongoing dialogue about the impact of change on competing interests and incentives. If your leaders are able to foster those conversations and build that trust, you’ll avoid many organizational defensive routines and surface barriers to change. If they don’t, you’ll eventually find yourself doing a post-mortem and talking about how the seeds of failure were sown before things even got off the ground.

  1. Conversations Increase Engagement

Digital transformation will require more effort and more commitment from your people than business-as-usual already does. We can argue about the definition and metrics for employee engagement as long as we want. Whichever way you look at the data, this much is clear: employees want leaders to show an interest in them – in their performance, their development, in who they are as a person. If they don’t think the organization cares about them, they won’t care about it.

After paying and treating people fairly, the most obvious way your leaders can demonstrate interest in their people is by talking to them. That absolutely means frequent conversations about performance expectations, feedback, and development. It also means an ongoing dialogue that keeps employees in the loop about what’s going on in the organization and helps them feel supported during change.

To achieve success in your digital transformation, your leaders need to build a discipline of having real conversations with their people. If they can’t do that, you can expect employees to reduce their discretionary effort or head for the door. If your leaders can increase the level of open dialogue, you can keep more people engaged and focused on the real work.

  1. Conversation Skills are Critical Now More than Ever

Ironically, just as the need for effective conversations is heightened by companies’ desire for digital transformation, their leaders’ conversation skills have been weakened by reliance on technology. In her book, Reclaiming Conversation, MIT’s Sherry Turkle paints a picture of generations of people raised with digital technology and the deeply ambivalent relationship they have with live communication. While they crave human connection, many of them feel very uncomfortable with actual conversations. The more important or emotionally charged the situation, the more they find comfort in low-touch virtual channels. If asking someone to dinner feels too risky any other way than by text message, just try asking someone to transform the way they work and potentially risk their career, livelihood, or sense of professional identity. That’s a tough assignment.

But it’s not just young people. These conversations have always been tough, and we’ve always found ways to avoid having them or attempted to reduce the risk with behaviors that blunt our effectiveness. There are plenty of older leaders who hide behind emails or memos just as readily. All too often we find ourselves filling the space that should be devoted to the important discussion of real issues, with a kind of dance that looks like a conversation, but mostly consists of people saying things they don’t really believe about stuff they don’t actually care about.

The good news is that it can be changed. If we help our leaders confront the unproductive communication patterns that hold them back, they can shift their thinking. If we provide them with practical models and tools, they can adopt new behaviors. If we create opportunities to practice and reinforce their conversation skills, we can build new norms in our organizations.

The time to fix this is now.  Your digital strategy will thank you.

– Sean Kennedy, SVP Learning Strategy, Cambridge Leadership Group