Leading Digital Transformation: Strategies & Tools for Organizational Change

A successful digital transformation requires a deep understanding of the technologies that drive your business, the ability to lead organizational change, and a vision of how these technologies will impact your industry and your business environment. Despite the significant investments in digital transformation initiatives across industries over the last decade, including data analytics capabilities, automation, AI tools, and other technologies, the majority of these efforts fall well short of expectations. While 89% of large companies report having digital and AI transformation initiatives, only 31% have achieved the expected revenue increases and just 25% report the anticipated cost savings from these efforts. The most common obstacles to achieve the strategic and financial benefits of digitization efforts are ‘people issues’, which largely reflect the organization’s gaps in leadership capabilities to drive organizational change.

Lessons from the Field: Practical Strategies for Leading Digital Transformations

Fortunately, there are evidence-based leadership development strategies to equip your organization’s leaders with the skills and tools for leading digital transformation initiatives. Based on our firm’s work with leadership teams across industries and sectors, we have identified the following practical insights and strategies to navigate your current and future digital transformation efforts while also developing your organization’s change management capabilities.

1.  Adopting a Digital Leadership Competency Model

One of the most common and powerful obstacles that leaders must overcome is the necessary shift in mindset and culture for successful digital transformations. In our experiences supporting leadership teams across industries, we have found that developing a common ‘language’ around the requisite leadership skills and behavioral competencies across levels (supervisors/team leaders, managers/directors, and executives) is a foundational best practice. For many of our clients, the most effective approach is developing a leadership competency model or framework (a set of core behavioral competencies across management levels) that reflects the challenges of leading teams through digital transformation initiatives.

Executive teams should take steps to develop new leadership competency models, or improve existing ones, to capture core digital leadership skills and behavioral competencies such as leader agility, design thinking, collaboration skills, growth mindset, change management skills, and the ability to develop talent to meet future business needs. A well-designed digital leadership competency model can serve as a powerful tool to select the best leaders to spearhead digitization initiatives, assess and develop leadership talent across management levels (via 360-degree assessment data), and design new leader training and onboarding programs that address any critical skill gaps. Ultimately, highly effective digital leadership competency models cultivate a culture of innovation and agility that is foundational for successful transformation efforts.

2.  Cultivating a Collaborative Culture: Organizational Agility Assessment

For many organizations undergoing digital transformations, a major obstacle is the lack of collaboration across functions and business units. A common misstep is to empower a single functional unit—often the IT department—to lead digital transformational initiatives, an approach that often leads to strong resistance from the business units. The overall lack of collaboration and information-sharing across functions and business units are major obstacles for digital transformation efforts.

Our work with clients reveals an effective approach for overcoming this critical challenge: assess the organization’s agility practices (environmental scanning, knowledge sharing, experimentation, rapid decision-making and learning cycles, cultivating psychological safety, and other core practices) and arm leaders across levels with data and practical strategies to enhance these practices. A central feature of this strategy is the recognition that no single department or business unit is responsible for the organization’s lack of collaboration or information-sharing. The development of agile practices that cultivate a ‘fail-fast’ culture of innovation and continuous learning requires the leadership teams across all functions and business units to assess the organization’s strengths and opportunities for further development.

After conducting the assessment and sharing the key findings with all stakeholders, an effective next step is to conduct group feedback sessions that allow for thoughtful interpretation of the findings and targeted changes to strengthen agility practices. For example, group feedback sessions may focus on practical steps that leaders can take to cultivate psychological safety among their teams, which includes developing greater openness to new and different ideas or views and leadership practices that reinforce learning from ‘failures’ such as experimentation and prototyping that generate iterative feedback on new products, services, or processes. The combination of validated assessment data on agility practices and group feedback sessions that offer practical strategies for leadership teams is an effective approach to cultivate a collaborative culture across functions and business units.  

3.  Developing Change Management Capabilities

One of the most common challenges for organizations implementing digital transformations is to develop a practical ‘playbook’ or guide for leaders as they manage the change process. For many organizations, an effective strategy is to establish a standard approach for how digital transformation projects are implemented across the business, specifying leadership practices at each stage of the change initiative. The change management playbook captures the overall change strategy and industry positioning, the organizational values that will facilitate the change, a change management framework that illustrates the stages of the change process, and recommended leadership practices across each stage that engender strong employee support for the goals of the digital transformation initiative. These leadership practices include targeted talent development strategies such as closing key skill gaps via job crafting, reskilling, and upskilling (e.g., training on AI tools).

In addition to developing change management playbooks and supporting leadership guides, a highly effective practice for developing change management capabilities is to design high-impact, experiential training programs for leaders across the organization. Specifically, our work with clients suggests that the use of simulations and group feedback sessions allow leaders to create a safe, risk-free setting in which to practice their decision-making and change management strategies in a dynamic context. Simulations and supporting training sessions offer leaders invaluable opportunities to develop their repertoire of change management skills across the stages of a digital change initiative, such as practicing when to implement various change levers with real-time feedback on the efficacy of their decisions. The blend of a change management playbook and a practical leadership guide, as well as highly experiential opportunities to develop change management skills via virtual simulations, offers leadership teams valuable opportunities to strengthen their capabilities to lead digital transformation initiatives.

Additional Resources

The following articles and resources from leading publications (CIO, Wall Street Journal, Harvard Business Review, Forbes, MIT Sloan Management Review) offer additional insights and strategies that you may find useful for navigating your current or future digital transformation efforts while also developing your organization’s change management capabilities.

Learning More

We welcome you to learn more about our evidence-based approach to build a customized leadership development program for your organization’s leadership teams. Our approach to developing leadership capabilities for driving digital transformation includes digital strategy frameworks, proprietary leadership assessment tools, customized leadership competency models, change management simulations, executive coaching, and other talent development practices. To learn more about our approach, please contact us or view our website for related resources, tools, and practical research insights.

Kevin Groves