Companies have already got used to the constant increase in demands of today’s business world. A few years ago, digitization was the answer to adapting to these increased expectations. However, we have not yet got used to the fact that internal digitization is turning our companies upside down from within. Digitization doesn’t just mean that new technologies or applications are introduced, it means that companies have to, and will, change at their core, i.e. in their structures. The path of this change is called digital transformation and is the most important management task for the next few years.

Digital transformation combines three goals:

• Maximum focus on customers
• More attractive products and services
• Increased efficiency and yield

Managers face three challenges:

• Rebuilding structures
• Guiding people through the change
• Promoting creativity and innovation

Rebuilding structures

We see the first major challenges in the questions: How can we react quickly to the dynamics of the market and position ourselves best? How can we offer attractive services in the shortest possible time? Who are the people among us who understand best what customers actually need? What is the best way to get them to share what they know? So, where do we need to become more agile and creative?

Today, it is not enough to design technically sophisticated products. The focus needs to be on value for the customer. Processes must be rigorously examined from the customer’s perspective. Does the customer really need to know what every department is and isn’t responsible for? Why are decisions often moved up and down in the organization for days and weeks until ultimately nobody knows what they are about?

Current pain is quickly identified, but starting points for good, permanent solutions are often difficult to find. Ready-made solutions, à la Spotify, will soon be circulating and appear to make a lot of sense, but are usually unsuitable for „copy and paste“ implementation.

In these times of cyber-crime and data protection, dealing with technological risks is essential to avoid major damage and high, unforeseen costs.

Guiding people through change

This aspect of the transformation is the most difficult to accomplish. It’s not about a few employees having to adjust to new framework conditions. It is more about changing the „mindset“. It all starts with improving basic digital skills throughout the company – especially the executives, many of whom are „digital immigrants“ who find it difficult to understand the switch to digital processes because they simply don’t know enough about it. Comprehensive training initiatives need to be started in which „normal“ employees can, of course, also be included.

Promoting creativity and innovation

It is important that everyone in the company is open to experimentation. Trying out, evaluating, adapting – this requires courage, speed and an appetite for learning. At the same time, a positive error culture must be established. We’ve been talking about this for a number of years, but now it’s getting really serious. If errors are seen as “damage” rather than “information”, digital transformation won’t happen. Product cycles cannot be shortened without experimentation and a positive error culture.

The following approaches and methods can provide answers to the challenges we have mentioned:

• Design thinking, co-creation, multi-disciplinary collaboration
• Intensive stakeholder engagement and broad networking with maximum openness
• Lean start up and lean management
• Change and transformation management
• Agile organizational models
• Self-organization and self-responsibility
• New Work Leadership

In order to meet the needs the future will throw at us, it is no longer enough to just continue developing leaders’ leadership and management skills. The entire organization has to learn to develop continuously. Then digital transformation will pretty much take care of itself.

Thanks to Angelika Lošek, Sheila Purdy, Christopher Rettenbacher and Hansjörg Zahradnik for working on this article with me!