Digital transformation is changing the world around us. This presents us, as business leaders, with a challenge: to stay competitive in the digital age. We do not only need to rapidly adopt new digital technologies, but also adapt our organization’s strategy and culture. Obviously, this is no quick and easy task – it requires strong leadership commitment, vision, and a long-term plan of action.
Digital transformation can be felt everywhere: it’s changing the way we socialize, work, do business, and ultimately, the way we lead our everyday lives. A digital world sets new conditions, also for business. These new circumstances can threaten businesses’ long-established competitive positions in a major way. Consequently, to stay ahead of the game, companies need to embrace digitalization. And business leaders are – and should be – responsible for driving this necessary change process. This challenging task begins with developing a thorough understanding of digital transformation and its impacts.
Digital transformation – There’s much more to it
When we hear digital transformation, most of us immediately think of buzz words like artificial intelligence, the internet of things, blockchain, cloud, or big data. It’s true that, we’re presented with numerous promising new digital technologies. But, digital transformation is much more than this; it also profoundly changes our economy and society.
So, today’s business leaders actually face a far more complex task than may be initially assumed: Not only do they have to effectively exploit emerging technologies to optimize their business operations, they also have to critically question the way they create value. A far more fundamental change is therefore necessary. In my view, organizations that are truly driven by customer-centricity are more likely to successfully cope with such a change process: To ensure the greatest convenience, speed, and flexibility for their customers, they automatically keep up with the latest market trends to secure their position as the preferred provider.
At Deutsche Post DHL Group, we identified three action areas to help us navigate our digital journey and continue to meet our customers’ expectations.
Digital transformation – A three-pillar plan of action
Going through an effective digital transformation with your organization means managing change at different levels. At Deutsche Post DHL Group, we simultaneously tackle three pillars of action to push forward on our digital roadmap.
1. Exploit new technologies (small i)
On a basic level, we adopt new technologies within our existing business model. Striving for continuous improvement is nothing new, however, the way we innovate today is different. In the digital age, the speed at which new technologies become available has drastically increased. A direct implication of this is that we need to implement these technologies fast. Secondly, we are constantly presented with a huge amount of promising tech solutions. Because of this, choosing the best route forward has become more difficult: A good example of this is digitalizing our warehousing. Here, the application of robotics, drones, and artificial intelligence, amongst others, are all relevant options – this complicates decision-making.
So, how can leaders push for “small i”? Leaders need to be driven by an innate interest and curiosity for emerging technologies. They need to vigilantly observe technological developments, and proactively test and implement these. At my company, the management team got together to program a robot themselves and learn more about the concept behind RPA (Robot Process Automation). This experience was an eye-opener for all of us. I realized that directly engaging with new technologies is paramount for leaders, to gain sufficient understanding of new tech, and in the long run, foster innovations.
2. Disrupt your business (big I)
Here we are disrupting our business through the introduction of new business models. A lot is happening in the logistics industry in this regard: digital marketplace technologies are making their way into the road freight industry; and warehousing systems are becoming smart using cloud solutions. These innovations are truly changing the way things are done in logistics.
To make room for disruptive innovations, a company’s vision and mission may need substantial reformulating. Leaders need to be courageous and visionary – more than ever before – to inspire such change and convince their organization of the long-term picture.
3. Culture and capabilities – Change from the inside out
Our main focus however is to establish a fitting agile culture – which is a prerequisite for fostering a digital transformation.
Only when your organization can handle uncertainties and accepts failure, new ideas can be piloted quickly and early on, accelerating the overall innovation process. Building a culture of trust plays a pivotal role here. Trust allows us the take the risks needed for business growth without having a fear of being penalized for this. In addition, a trustful environment stimulates a more open dialogue, exchange of expertise, and critical thinking across organizational levels.
It’s up to business leaders to make this cultural change happen. Our function as role models to instill a new culture and mentality should not be underestimated. Moreover, we as leaders are the key to encourage intrapreneurship, new forms of digital collaboration, and a hierarchy-free exchange of ideas throughout the organization – all necessary ingredients for an agile working model.
We are moving forward on our digital journey by working on all these fronts. I believe a comprehensive change process is the only way to go in order to secure sustainable future growth for the logistics industry.
It’s evident that digitalization is not just an additional to-do. It deserves serious attention to ensure that it becomes the very cornerstone of every organization’s strategy and culture. Today’s leaders can only become tomorrow’s digital leaders when they commit to driving a fundamental change process within and even beyond their organization. This cannot be accomplished without a clear vision and strong commitment. Embracing digitalization as individuals and organizations will not only contribute to the continued viability of our industries but also benefit our economy and society at large.
I am convinced that business leaders need to proactively and optimistically lead the way towards digital transformation – This is what it takes to get our organizations ready for a sustainable digital future.
How are you and your organization dealing with digital transformation? I look forward to learning about your experiences here on my blog or my LinkedIn account.