Strong and clear leadership is one of the most important success factors for any digital transformation. What exactly does it mean to be a transformation leader? Most people intuitively recognize and understand that leadership is important to a digital transformation, but many don’t understand what that means to be an effective leader for these specific projects.
Many people think that leadership means simply setting a high-level vision for a project, recognizing the need for new technology, or perhaps approving a large transformation project. Yes, those are certainly elements of successful transformation leadership, but barely scratch the surface of the types of leaders and leadership skills that you need to demonstrate to be effective in the digital transformation.
Today I will outline how to be an effective business transformation leader. I’ll also provide some recommendations for those of you that may not be a leader per se – but you’re on a project team or part of an organization that’s going through a transformation. What are some of the things you could coach your leadership team to be aware of in order to be successful?
Symptoms of Poor Leadership
First, it helps to understand what the symptoms of poor leadership before knowing how to lead a digital transformation. Simply put, how do we know that we haven’t been effective in our leadership?
Some of the most common symptoms we see with this phenomenon of poor leadership is you have total chaos during your implementation. Some of the signs are:
- A lot of misalignments, and people not agreeing on what the path forward should look like.
- You don’t have the right project governance and controls in place.
- Your system integrator is essentially taking complete control over your project.
- You spend more time, money, and resources than you should or than you expected on the project.
If any of these things sound familiar to you or if you can relate to any of these, chances are it was a symptom of a deeper root cause, which is you lacking strong transformation leadership. Mitigating these core systemic issues may take time. But more importantly, how do we get to the root cause of making sure that we have strong leadership in our transformation?
Business Strategy & Vision
The first step in effective transformation leadership (which should start well before you start bringing in a system integrator to start deploying technology) is to define a clear strategy and vision for what you want this transformation to be. More importantly, what you want your organization to be and how will this transformation support that vision. This sounds simple enough, but you would be amazed how many organizations fail to execute an aligned company strategy.
If you’re an executive sponsor or you’re working with your executive sponsor, you want to make sure that not only do they have a vision for what they think the transformation should be, but also making sure that your other key executives and stakeholders are aligned with that vision. This process is typically pretty messy. It’s messier than most organizations think. If it doesn’t feel messy, chances are you’re not getting into the heart of what needs to be aligned.
At the end of the day, it is imperative that your leadership has a clear vision of the target future state and you have an alignment that can ultimately translate to a strategy and trickle down the organization. That’s a key first step or prerequisite to being an effective transformation leader.
The next step to effective transformation leadership is to ensure the strategy and vision that you’ve defined and that alignment that you’ve secured now translates to business operations. So now that we’ve decided as an organization our overall strategic goals, we now need to understand how this effects our operating model.
You need to have a clear understanding of any points of misalignment operationally, as well as identify a clear vision of what you want your operational blueprint to look like going forward.
Now, a common pitfall that executives and project teams fall into is they say, “well, we don’t need to spend our time doing that because that’s why we hired the system integrator or the VAR from the software vendor to help us define what our business processes are.”
Why is this such a big mistake? Well, if the software vendor and their system integrator is being brought in to help you with your transactional workflows down at the frontline level, they’re not here to help you define what your operating model is going to be and what you want your workflows to look like. They’re jumping straight down to the bottom without having that framework in place.
If you don’t have that framework in place, you’re going to get steamrolled by what the technology can and can’t do. While in some cases technology might net an improvement to your operations by accident, chances are it’s also going to water down many of the processes that you expect to have in place. Especially, if you have competitive advantages or parts of your business that are critical to your success.
It is important to make sure you have a clear vision for what that operational model should look like and that you’ve defined some of those macro workflows for your future state before you’ve engaged with the system integrator. Having this awareness is absolutely critical to effective transformation leaders.
Technology Awareness & Openness
Another important trait, skill set, and overall mentality to have as an effective transformation leader is a technology awareness and openness. One of the most common dynamics we see in transformations are executives and project teams that become enamored by big ERP vendors like SAP, Oracle, or Microsoft.
They just assume that a fancy vendor can solve all of their problems. It may very well be that you’re going to ultimately deploy one single ERP system, but what’s more likely to happen is that yes – you have a core ERP system, but there may be other technologies that you need to bolt-on or to augment within that core, back-office ERP system.
A lot of the times, if you do implement just one single layer ERP system and you don’t have multiple systems or a best-of-breed environment, you still want to have an openness regarding how you want your business processes to look in the future. Nobody wants to be in a situation where they’re constrained by what the technology limitations might be.
Too often organizations lead with technology. They treat technology as a silver bullet that’s going to help them figure out what the answers should be as it relates to their organization and their operations.
You need to be leery of buzzwords like agile, best practices, or off-the-shelf capabilities. Those generally don’t exist. You do have some common business processes that can be built into technology, but in general, you still have to define workflows.
Most ERP systems are very flexible, so you need to define how you want your business to run and how you want the technology to influence your organization. Be sure not to fall into those common sales tactics or traps, and just have a realistic expectation going into your implementation. That’s one of the most important things you can do to be an effective transformation leader.
Define a Change Strategy
The best transformational leaders I’ve worked with are the ones that can really enable change within an organization. They not only set the vision that we talked about earlier, but they can also execute it to its fullest potential. They don’t fall victim to some of the sales tactics and they don’t get too enamored by sparkly technology. These are all very important and great skill sets however, more importantly, they can establish a change strategy that’s highly effective and works well for their organization.
These leaders recognize that business processes and technologies are just two of the three components that are required to make a project successful. With the third being the organizational change management side of things. This is the most important part of transformation leadership. It is all about really focusing in on training employees and identifying whatever changes will be taking place so everyone can operate at the highest level.
The other critical part of a change strategy as it relates to a transformation leader is making sure that you maintain that coveted alignment throughout the implementation or full transformation. I mentioned before how one of the first things you need to do is ensure that you have that alignment at the executive level and it cascades down through the project team and the rest of the organization.
Over time inevitably people start to get distracted and fall out of alignment. Priorities start to go in different directions and it’s your job as a transformation leader to make sure you stay aligned and you work through those areas of misalignment. So really watch for those areas of stakeholder misalignment, executive misalignment, and make sure that you’re actively involved in defining a unified approach and executing your strategy to overcome those change management issues.
Another critical aspect of transformation leadership is to take ownership of this transformation. I mentioned before that a common dynamic in these sorts of projects is to defer to your system integrator, or software vendor, or assume that the technology is going to tell you how to run your business. None of that is actually true.
It is important to take ownership of the project, define what this project means to you, optimize your business processes and how you want those to look, and then figure out how the technology fits into that model or not.
Too often we see organizations that have an outsource mentality, but not the right execution. Yes, they’re going to help you, but they’re not going to do it for you and they shouldn’t be doing it for you.
You really want to make sure that you take ownership and leading the charge. Bring in outside help to support you, but really make sure that you and your team are the ones owning your project and business. If you don’t have the right competencies internally that’s okay, you can structure the project in a way to where you can still leverage outside help, but maintain control.
That’s all part of project governance, setting the vision, and all of the other things we’ve talked about. At the end of the day, make sure you take ownership of the project. This is one of the most fundamental things you can do as an effective transformation leader.
Another critical component of effective transformation leadership is to be able to identify risks before they become too much of a problem. This is definitely more of an art than a science. It requires a certain amount of expertise and potentially outside help to complete it. The idea here is that you really want balance and optimism in your leadership approach.
Of course, as a leader, you want to focus on the positives or project wins – but you also have to look at the dark side. Here are some questions that you should consider while identifying these risks:
- What are the risks that we’re about to encounter?
- How can we mitigate those risks and how can we overcome them?
- What do we do to manage those risks and how?
It’s a tough balancing act for people. There is such thing as being too optimistic so that you become blind to all the risks needing to be addressed in order to achieve the future state vision. On the flip side, you get transformation leaders who are so focused on the risk mitigation that they don’t set the proper vision and fail to communicate any optimism in order to motivate the organization.
These leadership traits come with time, experience, and outside help. Sourcing experts to identify potential risks is an excellent step to become a successful transformation leader.
Now the final piece of advice I can provide to be an effective transformation leader is to stay engaged throughout the entire transformation. It’s easy to be engaged early on to help in the evaluation, to pick the system integrator, to approve the budget and the plan, to send out a couple of emails announcing the project, and then stepping aside and letting the project team run with it.
That’s approach is very understandable, but it’s important that you do much more than just kick off the project. You should always keep that level of engagement throughout the project. In some cases, you might even need to get more engaged or involved than you thought you might have to.
Stay in touch with decisions that need executive oversite. For example, you might have all these different opinions within the organization of how to run a simple business process – at the end of the day, an executive sponsor, the steering committee, or someone at a senior level is going to have to provide direction in order to keep the project moving forward.
It is essential to delegate and trust your team, but also stay involved and recognize those areas where you do need to be more involved. Another example might be in the process of redefining an organization and how people’s jobs are going to change. Oftentimes that’s where you start to see organizational change resistance and overall disruption within your culture. This is where good leaders know how to step in, navigate this resistance, and return the peace.
It’s easy to think that our people want change, or they’re not too worried about the change so therefore the change won’t be difficult for them. We have hundreds of examples in which executives become distant from the project and lose pulse on potential change management issues. The business then experiences extreme disruption that affects the overall RIO.
As a leader, helping people understand that longer-term vision through engagement and transparency is very important. Make sure you always stay involved, ask a lot of questions, and most of all, don’t assume that things are going well just because you have not heard otherwise.
Extra Leadership Resources
One of the other things you can do to be an effective transformation leader is to educate yourself on what transformations typically look like. What are some common challenges? What are some best practices?
I encourage you to download the resources below for more on transformation leadership and change transformation.
- Change Management: The Secret Sauce to ERP and HCM Success
- 2021 Digital Transformation Report
I hope you found this information useful. If you would like to bounce ideas around regarding business or digital transformation leadership, please don’t hesitate to reach out to me directly. I am always happy to be an informal sounding board and resource for your transformation journey.