COMPANIES IN EVERY industry must scramble to keep pace with artificial intelligence and machine learning. But people who believe digital transformation hinges on new technology miss a fundamental rule of business: Gadgets don’t drive change. Leaders do.
True solutions to complex business problems cannot be ordered from a catalog. They don’t come in a box. And they don’t flow from the IT department. Digital transformation may require a change in technology. But nothing happens without a change in mindset—and that starts in the C-suite.
This reality raises the stakes for business schools, where many leaders in the rising generation come for their first lessons in strategy, change management, and data-informed decision making.
As promotions and pay raises come for these b-school graduates, they must be ready to infuse “digital everywhere” cultures within their units and organizations—cultures that can drive business transformation on a digital foundation. They can use these six principles to guide them on this journey:
Learn the language. Executives in the modern workplace do not necessarily need PhDs in information technology or data science. But they do need a threshold level of understanding about technology, so they can ask the right questions when talking to engineers, information technology specialists, and data scientists on their teams. At the University of Maryland’s Smith School of Business, we require our MBA students to take courses in strategic and transformational IT before taking deep dives into topics such as business analytics and data modeling. Students learn how, why, and where to infuse technology into business processes.
Incentivize the people. Machines don’t drive change, but they also don’t resist it. Fear of the unknown is a human trait, and leaders must anticipate pushback against new ideas. Implementation typically requires broad participation, and leaders must incentivize teams to step outside their comfort zones.
Build the processes. Digital solutions are complex, and implementing them usually requires participation from workers in every functional area. Leaders must educate, encourage, and motivate their teams to think creatively and innovatively. Success often requires a reconceptualization of how business processes can be executed across the enterprise with greater speed, lower cost, and higher quality.
Think now and later. Things move fast in a digital economy. By the time organizations implement one solution, another opportunity will manifest itself. To navigate the uncertainty, leaders must learn to be ambidextrous. They must continue to generate value from the technological investments they already have made, while simultaneously seeking novel and innovative opportunities enabled by the latest advances.
Beware of the hype. Not every promised disruption will materialize. Leaders must be skilled at separating the hype from reality and understanding what specific technologies work best for them. They must continually scan the horizon to ensure they don’t miss a development that could be critical to the company’s future competitiveness.
Teach tech literacy. Computers used to be the domain of highly trained specialists in white lab coats. But improved user interfaces have put smart machines within reach of nearly everyone. Leaders today must appreciate the importance of technological literacy among the entire workforce. The most creative ideas will emerge when frontline workers can match the right technology to their jobs.
The financial services and retail industries embraced the possibilities of digital technology decades ago. Currently, the healthcare industry is on a digital journey that promises to change the practice and delivery of medicine in ways that could improve health outcomes, patient safety, quality, and costs. My EMBA students marvel at the opportunities for achieving truly significant gains through data and health analytics across the entire ecosystem of insurance providers, pharmaceutical manufacturers, hospitals, and physician offices.
For the healthcare field—and nearly every other industry—machine learning and artificial intelligence offer almost endless possibilities. Technology is key to the metamorphosis. But real change starts with an active mindset.
Working together, business schools and the companies that hire their graduates will increasingly recognize information technology as a strategic and competitive differentiator. They will create awareness that digital disruption is inevitable and must be proactively managed. Only when this change occurs can organizations truly claim to be digitally transformed.
|Ritu Agarwal is interim dean at the University of Maryland’s Robert H. Smith School of Business in College Park and a Distinguished University Professor. She is also the founder and co-director of the Smith School’s Center for Health Information and Decision Systems.
This article originally appeared in BizEd's January/February 2020 issue. Please send questions, comments, or letters to the editor to [email protected].
OPERATING IN THE GAP
By Terence Tse
Business schools must bridge the distance between technical workers and business leaders.
By Raj Echambadi
Business schools must master three distinct literacies to thrive in the digital world.
COMPETING IN A DIGITAL AGE
By Anh Nguyen Phillips
Organizations must rethink how they organize, operate, and behave.
By Ying-Ying Hsieh
Transformation takes place across multiple levels and dimensions of an organization.
COMMITTING TO RESPONSIBLE DIGITAL TRANSFORMATION
By Rubén Mancha, Steven Gordon, and David Nersessian
Schools must emphasize personal responsibility as they educate the next generation of digital leaders.