Leading through flux: how you can approach digital tran Leading through flux: how you can approach digital transformation

Leading transformations has always been tough. And in the last few years, it’s only become more complex with greater uncertainty and disruption. Today, organisations are not just tweaking parts of themselves, they are fundamentally rethinking their strategies, products and services.

We have been closely looking at what this means for leadership teams during digital transformations. In working with clients across sectors, we have insight into what works and areas where teams often face roadblocks. Our ‘Leading through flux’ model identifies key enablers for staying agile and delivering change in a fast-changing environment. It defines the thinking for working through common challenges and creating lasting change.

As humans, we are creatures of habit. People, culture and established ways of working make transformation hard; it’s not the technology or processes. Given that people are at the heart of change, leaders need to focus on relationships with customers and staff. As we found in the KPMG 2021 CEO Outlook, leaders must stay true to their purpose and values while remaining agile.

In our model with trust at its core, there are four key parts to achieve this – Strategy Making, Test and Learn, Execution and Sustainability.

To deliver on digital transformation today, you have to be in tune with what’s happening around you, be prepared and listen to colleagues who think differently. You are likely to get left behind if you remain insulated.

On the other hand, with an informed and agile strategy, you can manage to stay on track. For instance, for one of our clients, we moved 400,000 learners from face-to-face learning to virtual learning within a month. Even though no one could predict the pandemic and its effects, we couldn’t have delivered the learning programme without accounting for some disruption in our strategy.

With fast-changing market dynamics, leaders may need to change strategy to match emerging opportunities. We call this strategic flux. This may include changes to the external context (e.g., customers’ requirements, availability of technology, cost pressures, vendors, political considerations, regulations, etc.) and internal context (shifting priorities, funding, etc.). Successful leaders scan their environment in an unbiased and sophisticated way. They stay on top of emerging developments and their impact on business.

With this awareness, they are in a better position to come up with new ideas and solutions. They are also able to identify barriers and pivot as required. Transformation leadership teams can formalise this scanning process, for example, by building in time on a regular agenda to consider external trends or nominating team members to track specific trends (regulatory, technological, political, etc). 

We have seen that start-up founders are willing to pivot business models more readily than corporate leaders. Their preparedness – and even desire – to hear tough feedback on their product, service or approach is critical.

Successful digital transformation leaders also actively seek and encourage real challenge, counter-views, a good ‘kicking of the tyres’ by internal customers and other informed stakeholders. Less successful leaders are fixated on their chosen approach and avoid feedback or dissenting views. In a world of strategic flux, you won’t reach far with the latter approach.

Leadership teams need to set a culture where colleagues feel safe and incentivised to challenge assumptions or decisions. They can do this by building in mechanisms, for example, by implementing a design-thinking ethos to ensure customers are involved throughout the design and build phases.

You can’t simply rely on things that have worked in the past. You have to be willing to take risks, do things differently and leave behind what doesn’t work. This is what the ‘test and learn’ approach is about. You need to reassure colleagues and encourage this mindset.

At a global retail bank, leaders found they were not making any progress with their transformation. So they went with a “take a blank sheet of paper” approach, giving teams permission to test and learn with new initiatives. As a result, teams were more engaged, and they adopted ideas for transformation they wouldn’t have otherwise. 

You might have heard of technology start-ups testing minimum viable products (MVPs). This is often done in multiple formats simultaneously, learning from customer response and adapting accordingly. ‘Test and learn’ has become a familiar approach in DevOps and user interface design. However, it can be applied to any programme and is core to many agile methodologies.

But it only works when your colleagues feel confident to experiment and take risks. When something doesn’t work as expected, they should be able to see it as a learning exercise rather than as a mistake or failure. Digital leaders who want to adopt ‘test and learn’ should be able to convince colleagues that they are safe to experiment within boundaries. Here, actions speak louder than words – how leaders respond to success and failure will tell programme team members if they can trust their leaders

Leaders often go all in with one approach and stick with it. This limits how people experiment and innovate. It takes a brave leadership team to put in place a culture of experimentation.

Along with setting the right culture, leaders must also contribute to how experiments are set up and designed. Not many know how to experiment – what a control group is, what a placebo is, what a representative sample is, and which statistical tests are appropriate for an experiment.

Rather than trying to do everything at once, it is often better to focus on what is likely to have the most impact. It’s also important to highlight how the different priority pieces link together and what they will deliver.

In a global media organisation, we found that with nine strategic digital programmes in progress, leaders were not aligned to outcomes. This had a rippling effect on project leaders and team members. They were left confused with the slew of ongoing projects, slowing down the pace of progress with unclear integrated outcomes. Focussing on a handful of priority projects and communicating their impact would have helped build trust across the organisation. 

Large agile programmes often get so caught up in testing, learning and backlog management that they fail to deliver anything meaningful and lose confidence in their key stakeholders. Delivering on digital transformation means taking the outputs of sophisticated scanning, challenging feedback and experiments to eventually take decisions, even if they are tough.

We call this ‘brutal’ prioritisation to emphasise the importance of making hard decisions in a timely way. Taking such calls is difficult for leaders, to commit to something without full confidence or evidence. They often delay such decisions by weeks or months, waiting for new information that is supposed to make a choice easier. But there is usually no easy choice or a perfect answer. It is better to cut losses, close down streams, and choose the best possible option based on what they know.

Brutal decisions are tough on your wider team and those who will ultimately live with the outcomes. Without proper communication, multiple pivots can be confusing and demoralising. So it is important for you to prepare people; devoting time and budget to capability, skills and talent building is key.

Yes, this will include basic user adoption training, but also consider awareness training on the overall programme strategy. This will help end users understand how you are approaching the project and why. It may also include new standardised ways of working, for e.g., new meeting protocols, core agile methodologies and feedback skills. Think of building a culture of learning with pathways, access to insightful learning content and continuous improvement to make the most of technology. This kind of capability development creates a common language for the programme and adds to a sense of identity and unity.

Time and again, we find it is important to not just kickstart change but also sustain it. At a global retail bank, the leadership team wanted to transform by challenging the status quo. The team focussed on people-led culture change. Key middle managers were established as change agents and were critical to making this successful.

They drove engagement through local presence, sponsoring continuous improvements. They were the face of high energy and impactful communication campaigns. Not only did they have influence to bring change, but they were personally invested in making it happen. This approach made it possible to carry on the momentum.

To use a cliché analogy, transformations are marathons, not sprints. Leadership teams need to think about how to make the programme sustainable, whilst running at pace. Burnout is a genuine problem after the initial 6-12 months of adrenaline rush, including for leadership team members. However, they need to stay on track if they are going to scan, inspire, make brutal decisions and maintain momentum.

How can you ensure your team continues to function well? It starts with trust, at the heart of our model – team members need to truly trust each other. For this, they need to get to know each other and build relationships. Then, they need to learn to both support and challenge constructively. And they need to commit to building relationships and understanding well the system they work in.

This links back to the workforce having the confidence in its leadership to test, learn and innovate. Such continuous learning is the only way teams can be equipped to respond to external challenges in an agile way. 

In a fast-changing programme, communication itself needs to be fluid. So we talk about a constant rippling of messaging through multiple channels, rather than relying on large set-piece events – although they have their place too. Internal social channels may be useful here, along with networks of influencers you cultivate. We’ve seen leaders record and post short video messages from their phones – rough and ready but fast and authentic. What matters is that leaders are confident and honest about communicating changes in strategy and results of experiments.

You need to encourage continuous two-way dialogue – internal social channels can be useful here. You also must make it a point to listen as much as you say. The purpose of rippling strategy is to maintain awareness, engagement, and confidence in the project to contribute to its sustainability. It’s good to have a dedicated communications lead, but your participation as the face of the programme is essential – you can’t delegate it.

Delivering on multiple fronts described above while staying true to core values is the true test of a digital leader.

If any of these themes or leadership challenges resonate with you, we would love to hear from you. Also let us know if you would like to join one of our Chatham House leaders’ circles where we have open and honest conversations with like-minded leaders.