Digital Transformation – Today´s Biggest Change Leadership Challenge

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Posted by Falk Bothe, Director Digital Transformation Office, Volkswagen AG - 21 March, 2018

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In the early years of the 20th Century, Henry Ford struggled to make use of the conveyor belt in automotive Production. Today, almost every business and industry is trying to make use of the endless opportunities of the ever faster developing technology. So in many ways, the engineers, scientists and professionals in companies all over the world follow in Ford´s footsteps: Improve Society with the help of technology. The challenge today is similar to 100 years ago, and still more complex, as the speed of innovation and availability of information increases by the second. Data Science, Artificial Intelligence, Quantum Computing, new Work - the generation that’s coming into the workforce is growing up in a totally different environment than 10 or 20 years ago.

Organisations that are facing the challenge of Digital Transformation do not only have to tackle the technical challenges, but have also to take care of developing the necessary mindset to work in this new age. The existing workforce needs to be taken along, educated and qualified to be able to continue creating value for the company - based on their long experience combined with new skills and knowledge. It is essential to honour the results and contributions the employees have brought into your business; they made the business what it is today! So the wrong thing to do would be to speak of the „old World“ and the „new World“. This terminology is not helpful, as it further pushes the tribal effect and divides people in competing Silos. And most importantly, at the moment you start the digital transformation, the existing business has to pay for the new digital business. Instead, you want to create unity, you want everybody to join forces inside the company to work on the solutions that will ensure continued business to be able to keep competing in your markets and regions.

The first thing to do when starting the transformation is to provide a clear Vision of the digital purpose for the company and a roadmap to get there. Next is to arrange quick and easy success, change an analogue process in a digital version, accessible for everybody, so people see something is happening that they can relate to. Key to further success is communication. Listen to people first and then create a tool in which you can both explain the history of the business to the digital natives and let the experienced workforce recognise the challenges and possibilities of the digital era. And if you have to change the roadmap along the way, no worries. The first version of the roadmap helps to get people moving and if you have good reason and can explain, they will have no problem in changing direction. Probably people will constantly ask you, why they should go into one direction, when others seem possible, too. So constant dialogue and learning from mistakes will get you to your destination. Remember the first GPS Navigation Systems? If you would have followed their directions blindly, you might have experienced some trouble. So a roadmap is always a good intervention to discuss with and more importantly listen to people.

Then, after providing a mutual starting point for discussion and exchange, you can start creating the ideas on how to transform your business and create a digital version of what´s been making you successful in the past, and a disruptive version that will make you successful in years to come. With the common language and vocabulary you now have developed, questions like: What Data do we have? How can we get access to it and/or make it accessible to the persons that can make use of to? What technology will help us? Who are the right partners to help us? And if we are moving forward into the digital business, how can we integrate our customers and suppliers into that Vision of the Future? What do they need, to continue doing business with us?

There are many ways to manage the complexity of the digital Transformation. Of course a Strategy is mandatory, and a Program Management that does not only orchestrate, steer and track the initiatives, but acts as an information hub, a neural network that relays information to the right people within the organisation, to speed up the process and help tearing down the boundaries of departmental thinking, creating a network of experts, that drive the transformation process. Together, the organisation and the Program Management act like an Orchestra in a professional Symbiosis. Without the Program Management acting as a conductor, the orchestra can provide Sound, but only together it will rise to a fantastic Symphony, that pleases both the involved parties and the audience, or in other words: the customers, partners, suppliers, stakeholder and your company.

The digital Transformation therefore is the biggest Leadership Challenge we have at the moment, as what brought us here, won't take us there. The mechanics and habits of the past will not help you to survive in the Digital Landscape. Therefore Leadership is needed on every Level of the Organisation, from individual to teams, from first day apprentice to Board Member and CEO. It´s not anymore a top down process, but a combined effort. The people in roles of authority need to create space for their employees to grow and be innovative. It´s not anymore about managing the business, it´s about empowerment and getting the right people together when facing a problem or starting a new project. Leadership needs to be in place when facing adaptive problems - when we are uncertain and of different opinion, what the problem really is and do not have the technical and necessary skills or resources to deal with the problem.

Leadership therefore also equals constant learning, both on individual and organisational level. This itself in todays world is probably the great challenge, as the opportunities we have today to obtain information are unprecedented in history, what should one focus on? On the other hand it has never been easier to get education, as a leader you can provide guidance for your followers and peers.

Vision, Roadmap, quick wins, get everybody aboard, orchestrate the Transformation, find new ways and partners, be adaptive and keep Learning. Got it? Ok, then you´re ready to get the digital Transformation started. Just remember: the solution you might think of at the moment might not be the answer to the problem you started with. Wait, what was actually the problem?

Digital Transformation can be achieved by a combined effort. So Leaders, please remember that you are not alone. Communicate a lot, don't be afraid to ask, look for help and listen. The person who might have the key information is ready to be met. The best thing of digital tools today is that distances don't matter that much anymore, and together the change leadership challenge can be fulfilled.

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Falk Bothe is the Director Digital Transformation at Volkswagen AG. He has more than 27 years of experience in the field of Digital Transformation, Organizational Development Consulting, Product Development, Sales and Project Management.

Topics: digital transformation


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