Digital Transformation Requires a New Kind of Leadership

The notion of digital transformation has gripped organizations worldwide, and it is no secret that corporations globally are already investing in and rolling out their own attempts to transform to the digital enterprise ideal. This is because the business potential behind digital transformation is very real. 

The Advent of Data Intelligence and Intelligent Decision-Making

A digital transformation is usually an organization-wide initiative that advocates the use of a specific set of contemporary technologies in support of improving an organization’s productivity and market growth, as well as its ability to maintain positive, long-lasting customer relations.

What makes a digital transformation so compelling is how it establishes an environment that blends data science with automation to produce “data intelligence” – genuinely insightful information that helps reveal to organizations how they can improve what they are already doing, and how they can grow by introducing new lines of business into new markets. The latter form of insight is what classifies organizations as being “disruptive”, meaning that they are able to leverage their existing resources and accomplishments in such a manner that they can muscle their way into new markets altogether. This is also what has given digital transformation the reputation of being a disruptive innovation.

Data intelligence has become a valued corporate asset because it empowers an organization with what is known as intelligent decision-making. Human decision makers can make decisions more intelligently as a result of the increased depth and quality of business insights provided by the data intelligence. Data intelligence further enables intelligent automated decision-making, whereby the data intelligence is used by an organization’s automation system to carry out decisions on its own. This is made possible through the use of AI technology where the solution is given the responsibility to automate certain decisions and to then independently act upon the outcome of those decisions. Contemporary AI technology further makes it possible for the system to “learn” from the outcomes of decisions so as to self-improve its decision-making capabilities over time.

The Need for Intelligent Leadership 

Digital transformation initiatives are lucrative and often essential for corporations to keep up with competitors that are already improving their digital presence and pursuing new “disruptive” ventures. However, undergoing a digital transformation involves much more than adopting new technology. As an organization-wide initiative, a digital transformation can introduce a range of considerations, such as:

• How new automation supplants human workers who may need to be retrained and reallocated.
• How data intelligence is defined and evolved to ensure it remains relevant, accurate and meaningful to the business.
• How decision-making is carried out and to what extent it can be safely delegated to automation.
• How the organization needs to evolve to ensure broad buy-in of a new digital culture.
• How the organization may need to be restructured to move away from product-centric silos to customer-centric collaboration.
• How relationships with customers will change as a result of new automation and automated decision-making. 

How does all of this relate to leadership? Business leaders can no longer rely on traditional roles because those roles were defined for a relationship between business and technology that exists differently under a digital transformation.

With the introduction of past business and technology innovations, the roles of business leaders have often needed to be redefined and sometimes supplemented by adding new roles. With digital transformation, the scope of business leaders’ roles needs to generally be broadened in order for the leadership team to continue to function successfully. 

How this occurs can vary, depending on how executive management roles are already defined within an organization. For example, the role of the CIO may need to broaden to encompass HR concerns and strategic decision-making processes. The role of the CEO may need to broaden to encompass involvement in how data intelligence is generated and evolved in order to ensure its relevancy to the CEO’s specific business goals. Many new responsibilities cannot be entirely delegated because they require a clear vision of the complete target state that the initiative is aiming to achieve. 

Undergoing a digital transformation has a ripple effect across the entire organization. It is a ripple effect that needs to be carefully planned, executed and controlled to maximize success. Because digital transformations are organization-wide initiatives, their mismanagement can have disastrous results. Instead of moving the organization ahead in its goals, the ripple might just take it in a completely different direction. Leadership without a broadened awareness may not even realize, for some time, that their initiative is taking them off-course.

The era of the digital enterprise requires leadership that embraces the opportunity to increase its intelligence through acquiring new knowledge and assuming new responsibilities. This results in a leadership team that can more successfully collaborate with a greater common understanding of how to achieve its greater common goals.

Written by Thomas Erl.

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