Digitalization: 10 key success factors

Digitalization is a hot topic in management due to its relevant impact on different business sectors and the way people are managed.

Various surveys indicate that digitalization is already one of the main issues facing managers as it is a new and complex subject that questions key management paradigms.

In this article, we will be sharing 10 key points that may help you to meet this challenge successfully.

1. The key to digitalization is not technology, but rather people and the transformation of business models. This is something non-evident which has already been accepted by leading companies in in the different sectors the digital world (including the more industrial ones). It should, therefore, entail a process of evolution in organizational culture, involving the whole organization and with CEOs and HR departments playing a key role.

2. It is a process of transformation that requires focus and resilience. We must rethink what we have learned (transforming traditional jobs to adapt them to the new environment) and learn (create positions related to new areas of knowledge: big data, social networking, ecommerce, robotics, artificial intelligence…).

In such a professional development process, it will be necessary to wisely combine doses of challenge and support in terms of our employees: fostering the necessary evolution from comfort zones and helping teams to achieve a positive attitude that is open to new horizons.

3. It is essential to generate a sense of urgency. According to Pierre Naterme (CEO of Accenture) digitalization is the main reason for the failure of 50% of Fortune 500 companies since the year 2000. It is clearly a critical matter which should be swiftly addressed: not adapting to the digital world may constitute professional suicide in numerous cases.

4. Senior Management sponsorship is key, as in any strategic transformation project, but must be complemented by a down-up approach. The involvement of managers and employees is a key factor to ensure organizations’ understanding, support and long-term adherence to change.

5. Digital optimism. According to Nacho de Pinedo (CEO of ISDI), organizations should be aware of the risks, but must face this process positively. This will allow them to be quicker than their competitors in detecting business opportunities (not only their “traditional” competitors, but also new players from other industries).

6. Employee engagement is still one of the key factors of success in this new context. The challenge is to achieve this at two levels: from employees in order to maintain cohesion, productivity, idea sharing and the capacity to reinvent themselves, and bravely address the difficulties inherent in the process and, also, from customers so we can transform them into prescribers (e.g. influencers on Social Media networks). This will empower brands in a hyperconnected world where reputation is fragile, has to be earned on a daily basis and is constantly under scrutiny (especially on the Internet).

7. Traditional employer branding is also in question. Being attractive to digital talent often involves changes in the traditional employee value proposition, with greater stress on elements such as flexibility, conciliation, higher participation in strategy, accelerated development and new forms of total compensation. And we should also be open to new forms of professional collaboration (involving groups such as the millennials) which transcend the more classical confines of employment contracts.

8. Agility and innovation are critical, both in terms of decision making and our teams’ capacity to learn and quickly adapt within a context of great uncertainty and an unpredictable future. We must try and, inevitably, mistakes will be made (hopefully quick and inexpensive). Technology should be perceived as a true pillar of business and as transcending its technical components.

9. Implementing a multi-channel strategy is not being digital if it is not accompanied by a truly digital mindset in the management of key processes, customers and teams. We must apply more bidirectional management and actively listen to all our stakeholders and multiple generations. This requires greater transparency on key issues such as strategy, products and services, management styles, CSR policies and people management.

10. Successful digitalization will only be achieved with the involvement and a shared vision of all employees. There will be a high risk of failure if this new management approach is solely visualized as a perishable project championed only by the General Management team or a specific department (typically Marketing, Digital or IT departments).

 

Conclusions

In the current socio-economic context, past models of success do not guarantee survival in the future.

The digital revolution will have lights and shadows and winners and losers as in the industrial revolutions of the past. The companies which best position themselves will not necessarily be the strongest, but they will be the most agile and will be prepared to take risks whenever necessary.

The good news is that, in such a technological world, digitalization has once again placed the emphasis on people and talent management as a substantial and sustainable competitive advantage. And this is positive in that it generates greater competition for the benefit of customers and constructively challenges the traditional status quo of a whole range of economic sectors by giving access to new players in many different fields.

David Reyero (HR Business Partner & Strategic Projects at Sanofi)

Juncal Garrido (Executive Director at Russell Reynolds)