Along with colleague Nathan Furr, INSEAD professor of innovation, strategy and entrepreneurship, Shipilov has spent the last five years studying more than 70 companies undergoing digital transformation. What they learned about how to drive a digital transformation can best be summed up in following strategic steps; to succeed, follow them like breadcrumbs to the right change champion.
In dozens of case studies, Shipilov and Furr found the same mistake that led to the same failure: putting an outside digital specialist in charge.
“Most of us are worried about digital transformation and feel we may not fully understand it,” Shipilov said. “Thus, our intuition is to hire a digital guru and put them in charge.”
But companies’ intuition can lead them astray. Although technical talent is a definite must, Shipilov and Furr warned that top technical talent often has been developed in an environment that’s very different from that of an established enterprise. Leading digital transformation can stump those who’ve never worked anywhere that needed it.
“The ‘digital guru” likely comes from a digital native like Amazon or Google,” Shipilov explained. “They tend to take for granted that they were part of a complex machine that was born digital. Preaching fire and brimstone about how no one gets it alienates the organization.”
Indeed, their unique pedigree means tech experts often lack experience in change management, and frequently become impatient with executives and teams who don’t seem to “get” digital. Brought in as leaders, they may be seen as outsiders, akin to the management consultants whom employees so often meet with skepticism and resistance. Even if the newcomer is right, therefore, they typically lack the organizational capital to influence employees or inspire adoption.
“The myth of digital transformation is that it’s about a total radical re-envisioning of the company – e.g., becoming Google,” Shipilov said. “For 97% of companies it isn’t. Instead, it is about two things: How can I use digital tools to transform the core to serve customers better? And what new opportunities – new products, markets, business models – are available to me in a digital world?”
Moreover, Shipilov and Furr observed that outside experts chosen for their digital fluency typically weren’t vetted for proven skill at the core task: change management.
“Digital transformation is as much about organizational change as it is about technology,” Shipilov said.
Look for Eager Insiders
As co-authors of multiple books and Harvard Business Review articles on transformation and management, Shipilov and Furr have a good sense not only of who fails in the digital-transformation driver’s seat (e.g., tech gurus), but also of who succeeds – individuals who check the following boxes:
Insider with a track record: A digital initiative is best led by a proven employee who has a track record of leading teams and getting things done, Shipilov and Furr assert.
Eager to learn digital ways: “They often didn’t know much about digital at the start,” Shipilov said of successful leaders. “But they were humble and willing to learn.”