Friday, December 26, 2014

Digital Transformation Requires Transformational Leadership

Digital Transformation Requires Transformational Leadership

Digital transformation goes beyond technology and tools, triggering the need for transformation in leadership and business models.  At the very core of digital transformation is people which is often overlooked in pursuit of shiny tools and cutting-edge technology. Change management and leadership are absolutely essential for an organization to reach its digital outcomes. But too often organizations fail to understand the significance of the human element of digitizing their organizations.  While they equip their organizations with new technologies and a “you have to do it this way now” approach they find their roll-out was ineffective and not sustainable.  In these authoritarian situations, organizations end up with low adoption, little change, more disruption and confusion.  And typically employees become angry and more disengaged from their work.

Rapid technological change, heightened levels of competition, disruptive business models, declining business performance, low employee engagement have created turbulent, unstable environments in which significant organizational change is imperative.  Companies need to find new ways of affecting change while simultaneously building employee morale.
It goes without saying that a concrete business strategy, vision for the future, new business processes and technologies are needed to make this shift.  But having the right leaders lead this transition is imperative. 
A study by Capgemini Consulting and MIT Sloan Management Review revealed that while 81% of the executives interviewed believe that digital transformation will provide a competitive advantage, this acknowledgment is not turning into action.  Only 35% said they have a shared vision for this future and more staggering is that they do not have the right leadership or a roadmap to get there.

Digital Transformation Starts and Ends with People
Bernard Bass coined the term in the 1970s ( and identified that the key characteristic of this style of leadership is to motivate and inspire people and to direct positive change in groups.  It is the role of the transformational leader to articulate a vision in a clear and appealing way, explain how to attain the vision, act with confidence and optimism and emphasize the values and behaviors needed in this symbotic relationship.  He or she then empowers, equips and coaches their team to achieve the vision.

Some of the best examples of transformational leaders are Nelson Mandela, Lee Iacocca and President Roosevelt.  Each was able to inspire  their followers to achieve their vision and realize positive outcomes of a new and better way for the future. These leaders are wired for change in a very positive, inspiring, values-driven way.
Not only do these leaders want the group to achieve high performance for the business but they are also committed to helping each individual realize his or her individual potential.  This is the secret sauce.  

Transformational leadership theory has identified 4 leadership competencies (sometimes referred to as the 4 I's)
  • Idealized Influence (II) - the leader serves as an ideal role model for followers; the leader "walks the talk," role models who are admired, respected, and emulated by followers
    • Establish Trust
    • Walk the Talk
    • Demonstrate integrity in all that you do
    • Establish a shared vision with your team
    • Share risk taking – if something fails as a result, own it, don’t blame
  • Inspirational Motivation (IM) - Transformational leaders have the ability to inspire and motivate followers. Combined these first two I's are what constitute the transformational leader's charisma.
    • Provide meaning of the vision and challenge the team to new ways of working
    • Demonstrate optimism, positivity and energy
    • Provide two way communication  - feedback from the team is essential
    • Clearly communicate expectations and goals
    • Hold everyone, including yourself, accountable
    • Demonstrate your personal commitment to the goals and the shared vision
    • Coach in the moment to help others grow
    • Be direct, honest and straightforward in your communications
  • Individualized Consideration (IC) - Transformational leaders demonstrate genuine concern for the needs and feelings of followers. This personal attention to each follower is a key element in bringing out their very best efforts.
    • Become a great listener and foster two-way communication
    • Empower the team
    • Develop your emotional intelligence  and lead the “whole” person – not just the task
    • Position yourself on the team as mentor or coach
  • Intellectual Stimulation (IS) - the leader challenges followers to be innovative and creative. A common misunderstanding is that transformational leaders are "soft," but the truth is that they constantly challenge followers to higher levels of performance.
    • Encourage innovation and creative thinking, but with a focus on rational business outcomes
    • Encourage creative problem solving (Question assumptions, reframing)
    • Use mistakes as learning opportunities and do not criticize others mistakes in public