From Growth Mindset to Digital Transformation Strategy

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August 29, 2019
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A crane manufacturer uses digital sensors to estimate materials replacement time and total weight allowed for safety reasons...a pharmacist and a large supermarket chain decide to build e-shop channels and think they have mastered the “digital age”…a bookstore owner builds a website where customers can review and order books and also thinks he is a pioneer in “digital transformation”…and an electronics retailer develops an app for mobile phones that allows his customers to find and order products from his store and likewise thinks he has a ‘digital strategy.’

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It's about Building Bridges & Great Journeys, NOT just Technology

In the examples above, business owners think they have understood digital transformation and will see market share and profits hit the roof! The reality is very different; even if a company incorporates digital technology in its strategic plans, it does not mean it has a digital strategy and it certainly does not imply that they are digitally transformed. Digital transformation requires more from an organization than simply using some new digital tools or mobile apps. It takes an open line of communication between the organization's leadership and employees, a growth mindset, a culture of freedom to choose and innovate, a shared vision and purpose and, last but not least, a sense of adventure.

Organizations that use digital transformation as a vehicle to lower costs or generate "quick profits" are likely to miss huge opportunities of growth in their industries. There are necessary steps that an organization must take in order increase its value via digital transformation initiatives and thus, stay relevant in an increasingly VUCA world (volatility, uncertainty, complexity & ambiguity). However, to extract meaningful value out of digitalization, an organization must approach incremental growth by ways of optimization and innovation across the entire business. Digital transformation is definitely not just a technology issue to solve! Businesses across the world are trying to digitally transform by building a digital strategy first and developing ''bridges'' between several aspects of their organizations: business culture, operations, information, processes, technologies, design aspects of digital services, new customer expectations and much more. Digital strategy guides organizations towards using technology to improve overall business performance whether that means new services and products, modifying existing processes and operations, or forming new differentiating business capabilities and customer experiences. Such strategy also helps to establish a "growth mindset culture" that embraces constant change and empowers employees to contribute and engage inside their organizations.

Carol Dweck, a well-known psychology professor at Stanford known for her growth mindset insights said that “A company that cannot self-correct cannot thrive”. This assumes greater significance today when most organizations are increasingly adopting technology in the digital age, making digital transformation necessary even for survival. Having a growth mindset is a profoundly different orientation to analyzing problems and problem solving. It looks at failure as learning, not as something to penalize and shy away from. Growth mindset can also help build "change culture" where people can stay continually adaptive, rather than adaptive solely for specific change events. To be change agile, digital leaders must first recognize that change and continuous learning is the default. They must embrace new challenges as opportunities, not as threats to traditional ways of working...

"We need to be always learning and insatiably curious. We need to be willing to lean in to uncertainty, take risks and move quickly when we make mistakes recognizing failure along the way to mastery" - Satya Nadella

Successful Digital Transformation should be built around 3 key "bridges" that could be described as questions to be answered by any business thinking of taking advantage of new digital capabilities:

  1. Why do we need to transform? (what are we trying to achieve),
  2. What parts or functions of our business do we need to transform?
  3. How can we actually transform?

Digital transformation’s main goal is to force companies to optimize their operations, their business models and finally offer a unique customer experience through digital services and products.   Most of these changes, and thus the digital strategy, should be driven by customers and NOT by technology!  It is the customer who wants more information and more relevant content, it is the customer who wants easy-to-use mobile apps for any device, anytime and anywhere, it’s the customer’s journey that finally dictates what the digital strategy of a business will look like!

It’s in the Research

Digital transformation is mainly about changing the way a business interacts with its customers and how they provide their customers consistent and excellent experiences (customer journey & moments of truth) whenever and wherever they need it. We shouldn't forget that today’s customers expect constant innovation. We are living in an era where a company’s ability to provide innovative experiences is as important as the quality of its products. Research in 2019 (Customer Engagement Trends-Global Research by Salesforce, 2019) found that 84% of customers now consider these factors equally when deciding who to buy. Today, customers expect fast and relevant content in relation to what they’re doing anytime, anywhere and in the format and on the device of their choice. It’s their experiences' journey that dictates a company's digital strategy and in order to keep up with this new kind of “always-connected” customer, a business must embrace technology to deliver a unique customer experience!

The term Digital Transformation means the process that redefines and renders the overall offer of your business more competitive by analyzing and listening to the needs of the market and through the use of digital technologies. — Fabio Lalli, CEO @ IQUII

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Building Bridges

Digital transformation entails coordination (building bridges) across the entire business, and in order to be successful it requires a growth mindset and a cultural change. Such bridges include:

  • ways to identify and satisfy new customer needs;
  • ways to complement old and new skillsets required (data analytics, AI, VR);
  • ways to move from the traditional "competition mindset" (win-lose systems) to the necessary "coopetition mindset" (disruption models and win-win systems of cooperation among competitors).

In order to get the most of a digital transformation effort, we need to start with the necessary cultural changes within an organization (develop a growth-mindset to embrace constant change and innovation), and then form a digital strategy that will successfully guide the digital transformation process and ensure that technology is being implemented in a way that supports the business objectives of the organization while at the same time, adds value to our customer.

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Yannis A. Pollalis, PhD - Guest Contributor and B|G International Advisory Board Member

Yannis A. Pollalis, is a Professor of Strategic Management & Policy in the Department of Economic Sciences (since 1999), and the Founder and Director of the Graduate Program in Economic & Business Strategy (since 2004)  at the University of Piraeus in Greece. He has served as a consultant, researched and published on issues of Strategy, Human Resources Development, Motivation for Employees, Coaching & Teamwork workshops (Train-the-Trainer), Marketing Planning, Strategic Planning, Management of Information Systems, Digital Transformation, e-Business Development, Strategic Marketing and Leadership
Dr. Pollalis is on the editorial board for The International Journal for Information Management (IJIM), The Journal of Marketing & Operations Management Research and has served as Associate Editor for the Journal of Applied Systems Studies (JASS) and Editor for the International Journal of Economics & Business (SPOUDAI). He has served as a faculty member for iSchool during 1993-1998 and since 2002 he has been a visiting professor for the Summer Leadership Institute at Syracuse University, New York.
He has published 15 books in the areas of management, strategic planning, information management, e-business, marketing management, organizational behavior and business corporate strategy. Dr Pollalis’ research has been funded by the Onassis Public Benefit Foundation, NATO’s Science & Research Program and the European Network for SMEs Research.

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August 29, 2019
12:45 pm
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Innovation
Strategy
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