Being the leader of an organization can be overwhelming, especially when you are steering your crew into uncharted waters.
Many large companies are currently facing the rough waters of digital transformation, which demands bold measures led from the very top of the ranks if chances for success are to be increased.
Business first, technology second
Contrary to belief, technology is simply an enabler for new business opportunities. As Carsten Linz, head of the SAP Center for Digital Leadership, put it: “Don’t digitize the past, innovate for the future!” Leaders who seek for the fast fix for current problems around their technology landscape often have it backward. Their understanding of digital transformation is “Take a technology and marry it with a current problem.” This, however, is the fastest way to stand still under the illusion of moving forward.
Real value lies in looking at business problems, understanding the opportunities around business model transformation, and evaluating how technology can enable the realization of this change.
Key to success: agility and boldness
The fact that hungry startups can pivot their business models faster than a Fortune 500 CEO can assemble a leadership meeting makes it obvious why agility is a success factor. An executive study conducted by SAP and Oxford Economics shows that 62% of leading organizations have already created agile teams—a figure estimated to rise to 82% over the next two years.
However, implementing any agility measurements without a culture of innovation is unlikely since the notion of being innovative is to be continually on the lookout for ways of improvement. As soon as setup changes have been successfully implemented, it is up to the top management around the CEO to lead by example.
The following three rules are guidelines for bold CEOs:
- Use the environment for orientation, but stay true to your course: Ideally, the vision of the CEO is carved in stone in the vision statement of the corporation and made public within the workforce. By doing so, every employee knows where the route is headed. This destination can and must be updated from time to time by understanding what the market is doing. However, staying true to your course is key to gain trust and loyalty from your employees.
- Don’t rely on just one ship: If you want to increase the chances of reaching your destination, you better not be placing all your bets on a single ship. Distribute the risk and test different routes with several vessels. New ideas come fast and go even quicker—this is in the very nature of innovation. Studies have shown that out of every 1000 ideas, only one becomes a success—with business value that will offset the cost of the other 999.
- Recruit a talented crew: Steering a boat in rough waters is not a one-man job. You need a talented crew that you can trust blindly. The same goes for the undertaking of digitally transforming your organization. Tech-savvy employees are the foundation that will enable a transformation. Capable leaders who communicate the commands and enable and motivate their deckhands are the drivers of transformation projects and initiatives.
Agility and boldness can determine whether an organization’s digital transformation becomes a historic success or a crash and burn. In summary, agility is the key factor for setting the scene and getting the organization in a fast-paced and quick-adjusting working mode. Following through on initiatives and making the corporate vision a reality is the leaders’ job, and these leaders therefore need great boldness.
That said, a few sailing lessons with an experienced skipper might be good fun for a leadership offsite meeting.
About the SAP Center for Digital Leadership
As a leading digital pioneer, the SAP Center for Digital Leadership helps CxO customers and their organizations to navigate their digital transformation and lead with innovation. Based on SAP’s internal digital transformation learnings, our research agenda and meetings with more than 150 CxO customers per year, we provide leaders with best practices for leading digital transformation.
Our network and partner ecosystem represents today’s and tomorrow’s leaders in digital business. Partners like European Space Agency trust us and jointly we create digital open ecosystems.
For more information, check out www.sap.com/digitalleadership.