Digital Transformation Starts at the Top

By David Ludlow, Group VP of Solution Management at SAP SuccessFactors

Successful leadership in the digital economy is contingent on how leaders empower the workforce and equip them with data-driven strategies and technologies. For companies to truly take part in the digital economy and transform their business, change has to start at the top. While employees have an important role to play in bringing strategy to life, leadership sets the vision and tone for the digital transformation.

Leaders 2020, a recent study conducted by Oxford Economics and sponsored by SAP SuccessFactors, analyzed how executives are driving digital transformation and identified the characteristics of “Digital Leaders.” Though difficult to define by one action or leadership trait, there is a shared set of identifiable tactics and strategies that these executives embrace to drive success. These executives are better prepared to build a digital workforce, empower employees, encourage collaboration, and drive continuous innovation.

Take action. Don’t expect employees to drive digital alone – they are looking to leaders to create the agenda. This means embracing digital yourself and listening to the rising number of millennial executives who are ready to implement strategic digital initiatives. Leaders 2020 found that only 37 percent of millennial executives feel that senior leadership is using technology to achieve competitive advantage. If leadership isn’t embracing technology and data-driven decision making, how can the workforce be expected to?

As leaders embrace digital, this vision needs to be shared across the organization to engage employees—58 percent of Digital Leaders are making their decisions transparent to the people affected by them. Implement and communicate a strategy for how the workforce can leverage technology to drive new and better business processes, eliminate manual tasks, and inspire innovation.

Encourage rapid decision making in the moment. Digital leaders empower employees by giving them the tools and insights to drive rapid decision making without the bottleneck of managerial approval. This approach is critical to creating an agile business environment and engaged workforce. Leaders 2020 revealed that 62 percent of digital leaders are making decisions in real-time, and 62 percent also state that decision-making is distributed across the organization (compared to only 41 percent of other executives surveyed.)

When employees are empowered to make fast decisions, they’re inspired to challenge the status quo and achieve business agility, which leads to more satisfied employees. In fact, 87 percent of digital leaders say they recognize and reward people who make process improvement challenges. By showing confidence in employees, digital leaders also create a more engaged workforce and help attract and retain top talent. Digital leaders invest in their employees and  give them the tools to succeed. In turn, these employees will go the extra mile beyond their job requirements.

Encourage collaboration to drive continuous innovation. The pace of change in the digital economy is not slowing down, so neither can the pace of business. Leaders 2020 revealed that barely half of executives surveyed say their senior leadership is highly proficient at using technology to achieve competitive advantage and facilitate innovation and collaboration.

Digital leaders, however, implement technology to facilitate collaboration, motivate employees, and create a dynamic business culture. They are creating fast-paced, productive work environments and responding to change quickly – 63 percent are capable of adapting to decisions made in real-time, compared to only 47 percent of other executives. Deploying human capital management (HCM) solutions that encourage collaboration is critical to helping employees adapt to change, create competitive advantage, and drive innovation.

Navigating the digital transformation is about more than deploying technology—it’s about creating a culture of innovation, cultivating employee engagement, and mastering business agility. Each incremental investment in digital must to be part of overall strategy, not just getting the latest technology for employees. Strong leadership in the digital age will inspire your workforce and yield significant business results.

To learn more insights from the Leaders 2020 study by Oxford Economics and SAP SuccessFactors, click here.