The online economy has made it more important than ever for organizations to leverage digital technologies to meet rapidly evolving needs and challenges. Yet the process of digital transformation is complex, and successful implementation requires an organization-wide commitment to change. There is perhaps no one that knows this better than Jim DuBois, the former CIO of Microsoft, a published author and an advisor to various Fortune 500 companies and startups.
Jim played an integral role in the digital transformation of Microsoft. We caught up with Jim in the latest episode of Globally Speaking Radio in which he shared with us his thoughts on digital transformation and corporate culture.
What is digital transformation?
Digital transformation is the process of integrating digital technologies into all aspects of an organization. By leveraging digital solutions, an organization improves the efficiency of its processes, reduces operating costs and provides superior customer experiences. Moreover, a business can better adapt to uncertainties like changing consumer needs and supply chain disruptions.
Yet as Jim points out, “There’s tons of different definitions for digital transformation because everybody’s doing a digital transformation. But if you ask them what is the digital transformation at your company, you get a couple of different flavours of answers.” In other words, the process of digital transformation is largely subjective and dependent on the problems that an organization is trying to solve and their unique business needs.
A confluence of factors like innovative new technologies and the fear of disruption by tech-enabled competitors drives the global digital transformation revolution. According to the International Data Corporation (IDC), organizations will spend a combined total of nearly USD $2 trillion on digital transformation in 2022. And research suggests that the COVID-19 pandemic has done little to slow the pace. An IDC report published in May of 2020 found that global spending on digital transformation technologies will grow at a rate of 10.4% in 2020 to USD $1.3 trillion.
A working plan for digital transformation
One of the biggest mistakes that organizations make in their approach to digital transformation is developing and sticking to a rigid plan. This is a point that Jim makes in both our discussion with him and his book, Six-Word Lessons to Think Like a Modern-Day CIO. He says, “it’s about the vision that you have for what you’re going to transform…but also the ability to recognize that you can’t get it all figured out at first, that you’re going to learn along the way, and that you can have a vision. That’s a living vision that [gives] clarity to the whole company, but recognize you’re going to learn things.”
So, a successful digital transformation starts with identifying a problem that needs to be solved. This is the “why” of an organization’s digital transformation. The goal could be improving customer service, boosting productivity or workforce enablement. From there, it is a matter of selecting a digital transformation framework. Two examples of popular frameworks are the MIT Sloan and Cognizant models.
The key is then to put the plan in motion and, as Jim points out, prioritize “the things that are going to get us along the path faster.” This will allow you to build some momentum and gain an early ROI. Realize, however, that you will face some challenges along the way. Be prepared to re-evaluate your plan and implement what you learn.
The role of corporate culture in digital transformation
Corporate culture plays a critical role in digital transformation. In fact, Jim describes corporate culture as the “most important thing to get right,” and that organizations must get “everything aligned and a culture in the company that’s going to embrace what you’re trying to do and support moving forward, as opposed to fighting the progress and holding it back.” This commitment to change starts at the top of the organization and trickles down through the ranks.
During his tenure as the CIO of Microsoft, Jim observed the integral role that the new CEO, Satya Nadella, played in changing the company culture when he took over in 2014. As Jim tells the story, when Satya was among a handful of finalists for the position, they were tasked with writing a paper on what they would do when they took over as CEO. Satya’s paper focused on his desire to transform the culture to facilitate “the acceleration of progress,” and it helped him land the job.
Once he was hired, Satya employed a pragmatic approach to bring about change. He started by clearly defining the culture. Microsoft became a learning environment. Teams employed a scientific approach that was conducive to digital transformation. Employees were taught to define hypotheses, experiment and learn from their results. Satya emphasized the importance of leaders modelling the new culture and holding others accountable.
One example of Satya’s leadership approach that Jim mentioned was the well-known incident involving the artificial intelligence (AI) bot Tay, released by Microsoft in 2016. Tay caused a good deal of controversy when it began to post inflammatory and offensive tweets on its Twitter account. This was due to a bunch of internet trolls hijacking the bot by feeding and teaching it inappropriate content.
As Jim describes it, the media came down hard on Microsoft for not having better controls in place. But instead of admonishing the team lead on the project, Satya asked what she learned from the experience and how they could improve the next time. Satya also “had her go speak to a bunch of teams around the company to explain what she learned to share that learning. And it turned out that it wasn’t as much about sharing the learning, it was about her talking to everybody about how Satya responded to her.” This leadership style not only fosters learning, it facilitates trust throughout the organization.
As a result of Satya’s transformative changes to Microsoft’s company culture, they converted from a long-term waterfall project methodology for their software releases to an agile software development model to speed up releases and improve customer satisfaction. None of this would have been possible without both leadership and their employees changing their ways to adapt to this new digital way of releasing content and doing business.