Oh, it’s mental, stupid!

by Julia Culen &  Christian Mayhofer

Many leaders still think that Industry 4.0 is about increasing efficiency and decreasing costs of production. It might be too late when they will be proven wrong.

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Digital transformation is not automation, it actually means business model disruption and when Philipp Justus, German CEO of Google, says “…the digital transformation will never again be as slow as today” – that sounds really scary!

When we talk to leaders today many seem to be stuck in something we call “Schockstarre” or: lamed due to shock. There is no other explanation for their non-reactiveness, their slow motion way of moving forward and the kind of threats they identify as relevant to them. Instead, many organizations face massive problems to even go into the first stages of digitalization: like collaboration platforms or CRM tools (Customer Relationship Management) – terms from the 1990ies.

A recent IBM study tells us that main success factors in embracing digital change are strong relationships and feedback-loops with customers, being fast in new markets (first-mover-advantage), being prepared to be attacked by big and small new businesses and bringing down hierarchies, empowering employees with direct contact to customers. All these factors challenge the given identity of employees and the status quo of whole organizations. “We are best in class”, “we are the technological leaders”, “we have the best quality” – good morning, what if not?

So are we then really talking about technical rocket science and new cutting edge technology? Most likely not! Instead we are hitting mental challenges and barriers, much more perilous and poisonous as they are invisible to our old and proven ways of reading the world – and addressing them will lead to some uncomfortable questions to be answered:

  • What are the threats you are not even aware of?
  • What if today’s success is telling you nothing about tomorrow’s challenges?
  • What if todays success is not at all a proof that you are doing the right things today?
  • Are you still the right management team to face the challenges?
  • Do you have the right cultures, skills, people in place?
  • Who are the people you should listen to, in order to be in business tomorrow?
  • Which are the territories you are searching and hunting in?
  • What if your attitudes and beliefs are the limiting factors for the company’s needed transformation?
  • What if your business is currently being under disruption and you are not even aware of it?

There are many mental barriers to embrace the digital transformation while the speed and complexity of changes is totally overwhelming. But ignoring and dismissing these threats is not an option either. So what to do? Some ideas:

  • Get some young people and fresh thinking in your management teams.
  • Don’t belief your old beliefs!
  • Open up and connect to the world – go outside and see what is happening, don’t hide in your board rooms, companies and yesterdays playgrounds.
  • MOVE FASTER, YOU ARE TOO SLOW!
  • Go for a corporate culture rewarding competencies, ideas and speaking up, not hiding under the table in order to not making mistakes.
  • Rethink your business models every single day – and have your people do the same.
  • LISTEN TO YOUR CUSTOMERS!
  • LISTEN TO YOUR EMPLOYEES!
  • Listen to people with uncomfortable news.

We could go on, but the message we want to convey is the following: digital transformation is not primarily a technical but a mental challenge – and most likely it will hit like an avalanche. It smashes old believes and known success patterns. And it challenges leaders on a personal level, unknown of in the past. As this is only the beginning, you better get going. NOW!

Many people have great thoughts, expertise and articles on digital transformation, e.g.:

http://www.forbes.com/sites/gilpress/2015/03/09/5-things-to-do-when-you-lead-a-digital-transformation/

http://www.forbes.com/sites/gilpress/2015/12/06/6-predictions-about-the-future-of-digital-transformation/

http://sloanreview.mit.edu/article/the-nine-elements-of-digital-transformation/

https://www.linkedin.com/pulse/die-geschäftsmodelle-der-digitalen-elite-holger-schmidt

 


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