The secret behind companies that achieve digital transformation
Discover why leadership is the first step to avoiding business failure in digital transformation. Schedule a consultation with Avantech.
The secret behind companies that achieve digital transformation
Part 1: The Starting Point No One Wants to Accept
“Digital transformation in a company begins with the CEO's mental transformation.”
Key Figures on Digital Transformation Failure in Mexico
IDC reports that 70% of digital transformation initiatives in Mexico fail. The report also notes that 81% of companies have already initiated some type of digital transformation process, which contextualizes the high failure rate.
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More generally, a study by the consulting firm Equipo Humano reveals that more than 70% of digital transformation initiatives fail to achieve the expected results. Among the main causes, they cite a lack of clear strategy, weak leadership, and insufficient digital maturity. In short, most studies agree: approximately 70% of digital transformation projects in Mexico fail to achieve their objectives.
Weak Leadership: The Real Enemy
In this context, and identifying the main causes of business failure, “weak leadership” is mentioned.
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In previous articles related to digital transformation, we have shared the importance of the roles of each of the actors involved in a digital transformation strategy.
Regardless of the size or industry of the company, roles represent the most important critical success factor, after the strategy itself.
With the goal of preventing false starts or failures due to not considering key factors, we will share some experiences of companies that, due to not planning properly or assessing the feasibility of success, ended up facing obstacles that resulted in results far below expectations, or even in the cancellation of the project after significant progress had already been made. Based on these experiences, we have coined a phrase that we frequently use:
“Digital transformation begins with the CEO’s mental transformation.”
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1.Leader and collaborators celebrating good results due to good leadership.
Although the mindset must change throughout the organization, it must start with the CEO. They must be the force of change that everyone in the organization follows, starting with the C-suite. The CEO must adopt transformational leadership, moving from being the highest authority to becoming a facilitator of resources, processes, and people at every stage:
- Evaluation of the initiative.
- Implementation of each phase.
- 100% project completion.
The CEO must focus on making things happen on time, on budget, and on schedule.
2. Accept new paradigms
Digital transformation demands profound changes in:
- Culture and leadership style.
- Organizational structure and performance.
- Job profiles and necessary competencies.
- New ways of measuring performance and competitiveness.
You will have to accept letting go of employees who don't meet the new profiles, as well as adopt recruitment methods that guarantee the hiring of A+ talents. In short: the CEO must not only lead, he must be willing to make difficult decisions that define the direction of the entire organization.
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3. So where do you start?
It starts by making the CEO aware that their role is key and cannot be delegated. They must be a force for change in leadership, organizational culture, and project execution, promoting good practices in communication, commitment, discipline, and respect for the roles of all stakeholders. They must then focus on changing the mindset of their management team to embrace change and collaborate in its implementation, without neglecting daily business activities.
Here's an open question for reflection: If the CEO doesn't change first, how can they expect the rest of the organization to do so?
What has been theoretical so far will become a practical guide in Part 2 of the blog: "The secret behind companies that successfully achieve digital transformation," with the exact steps that separate successful companies from those that fail to achieve it.
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