Leadership Drives Digital Transformation Success

When it comes to near-term survival, organizations know they are fighting for their digital existence. Still, despite 80% of organizations moving forward with their digital transformation efforts, very few have experienced the heights of success they hoped. In Digital Transformation: Coming from Behind, we reported consultancy McKinsey & Company found less than one-third of digital transformations are successful.

What makes for a successful digital transformation? Services provider Fujitsu believes its recent survey has cracked the code. With Fujitsu Future Insights Global Digital Transformation Survey Report 2019, Fujitsu found less than half of the organizations can say their digital transformation efforts have resulted in forward progress.

The survey, which spanned 900 IT executives across nine countries, also found what Fujitsu believes are the factors of success in digital transformation: leadership, ecosystem, empowered people, a culture of agility, the value from data and business integration. These are all the organizational capabilities Fujitsu identified as necessary for successful digital transformation and calls them the “digital muscles.”

While there were six digital muscles identified, there’s one essential to strengthening them all: leadership.

Leadership came on top when it aligned social and revenue goals. When survey respondents expressed what factors would improve their trust in enterprises, 67% said they would trust companies that make a positive societal impact and more enterprises indicated they’re embracing social responsibility as well as revenue. According to the survey, 72% of respondents said their companies have a responsibility to help solve social challenges in addition to the pursuit of profits and 74% said it is important that business goals and social goals are aligned.

According to the survey, 70% of respondents believe their business leaders practice empathic leadership and most management teams actively communicate with their employees. And 68% said their management readily communicates important information, and their ideas, to their employees.

Leadership also means enabling staff to do what they need to do to succeed.

“Businesses have huge unused and latent capacity of their people in their ideas and understanding of business challenges. Many people in a business have a deep understanding of certain issues, like specific customer needs, or understanding the potential of a technology, in a way that the leadership often does not. But people who perform transactional tasks, acting only as business resources, are using a minimum of their potential,” the report stated.

The takeaway for leadership is to empower employees to develop creativity, empathy, problem-solving and digital skills.

Leadership in helping employees to achieve work-life balance was believed to be important to 78% of respondents. Additionally, 74% agreed diversity is important, 72% for inclusion and 71% said they encourage their employees to act proactively.

“Companies that recognize the importance of these factors seem to have greater success in digital transformation,” the report stated. “A good work-life balance enables employees to work with a sense of fulfillment. They can be motivated to transform. Taking advantage of diversity can help companies to attract talent and to form more creative teams, which brings creativity and innovation,” the report continued. “In addition, companies emphasizing inclusion earn the respect of individual employees and encourages greater sharing of ideas and opinions. Creating a corporate culture that motivates employees to innovate will help drive digital transformation.”

Finally, the report found leadership that helps build their people’s ability enjoys better transformational outcomes.

From those companies that support a work-life balance and diversity, 41% said they delivered good digital transformation outcomes. However, for those that didn’t place importance on work-life balance and diversity, only 19% and 22% respectively had good digital outcomes.

“Among companies that emphasize inclusion, 40% said that they had delivered digital transformation outcomes, whereas for companies that do not regard inclusion as important, the figure was only 24%,” the report said.

The survey shows leadership that primarily focuses on technology transformation and don’t focus on helping their employees enhance their capabilities as part of an organizational transformation, risk falling behind those organizations that do prioritize employees.

— George V. Hulme