Organisations need to adopt the agile decision-making mindset that Silicon Valley is renowned for where management lacks the right mindset to change and the company’s organisational practices are flawed, a digital transformation process may simply result in magnifying those flaws rather than transforming them.
Digital transformation has to be viewed as a continuous process and mindset rather than a one-off implementation. The common denominators in achieving a successful digital transformation include having finance leaders who understand that the following elements add up to strategic agility:
- Understanding the existence of blurred lines within the technology stack of data, infrastructure and applications;
- How unravelling tightly integrated systems makes them more flexible; and
- Understanding that by minimising the differences among processes, their company will be better able to leverage all of its data.
Because of the need for these elements, responsibility for the process has shifted over the past five years from the chief information officer to the CFO, or even the CEO. These C-suite roles have to be integrated with support not only of each other but also technological and business transformation. This is why the role of the CFO is evolving at such a pace.
At the start of this shift, in 2017 research by Bersin revealed that close to 90% of organisations surveyed reported that while they are undergoing digital disruption, 70% felt that they were not ready to address this digital transformation.
They recognised gaps in their existing leadership capability, digital mindset, operating models and skills set. These points have been identified in our CFO 3.0 report as increasing the responsibility of the CFO, leaders which are already typically responsible for major projects with major financial impact.
The CFO 3.0 — Digital transformation beyond financial management report explains that, since budgetary approval is a key element of digital strategy, the finance function has also moved to the centre of digital strategy. Our report is a new guide that looks at the evolution of finance leaders.
Here are five tips to change mindsets
- A critical aspect of changing mindsets is to leverage insiders — use internal staff who have intimate knowledge of what works and what doesn’t in the company’s daily operations. All too often, organisations seeking to transform (whether digital or otherwise) bring in outside consultants who tend to apply one-size-fits-all solutions in the name of best practice.
- To succeed in digital transformation, finance leaders are well advised to go back to the fundamentals: focus on changing the mindset of employees, as well as the organisational culture and processes, before deciding what digital tools to use and how to use them. What they envision to be the future of the organisation must guide the choice of technology, not the other way round.
- Changing mindsets becomes even more critical where teams are working remotely. The CFO 3.0 report finds that since lockdown began, 27% of finance leaders have taken on the additional responsibility of managing remote workers. With the rise in people working remotely comes the need to work as collaboratively as possible to ensure maximum support and productivity.
- Personal growth mindset: Instil in people the belief that they can learn something new. Digital dexterity is one of the most critical skills for employees to learn to be able to understand technology and, more importantly, how they can apply it in their jobs for the better.
- Promote a complex problem-solving and critical thinking mindset: In today’s context, the only constant changes. As jobs become less routine and more strategic, workers need to become more mentally agile and be able to adapt to changes fast to solve complex problems in the real world.
Reskilling and upskilling
These skills are unlikely to be widely available, so recruitment may not be the answer. The solution will be for companies to constantly reskill and upskill their own people, and to instil a digital mindset. In this way, people can come to recognise opportunities to use technology to generate more revenue or to digitally disrupt their existing operating models. Businesses need to become more innovative and to provide more chances to their people to make frequent use of technology.
This will go some way to assuage real fears regarding job security in terms of the future of work and the impact of artificial intelligence and machine learning over the next five to 10 years. Workers need to understand that most digital technologies provide possibilities for efficiency gains and customer intimacy — but in the absence of the right mindset, digital transformation may simply magnify efficiency flaws rather than cure them.
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The original article appeared on Business Live