Digitalization – Design by Finland
You would expect when reading a book filled with digital transformation stories from Finland to come up with couple of well describing attributes to our national, mental landscape such as sisu and perkele, yet I managed to found no reference to either one when reading the book digimuutos.fi this weekend.
The case examples of the book – Nokia, Finnair, Fonecta, Verohallinto, OP, Reima, Company X, Yle, Rovio and Wärtsilä have internalized the need for change already early and have worked their way into digitalization by focusing on customer experience, competence development and data driven decision making. They have completed their first steps on digital transformation journey and are now sharing their experiences and insights on how to lead the change.
To start with, you need to have a clear vision of what it is that you wish to reach. If your market is being disrupted, it might be that you will need to re-envision your whole business in order to survive. But behind everything there needs to be a clear strategy with a solid digital governance model. The right direction, is the one that our customers are pushing us towards.
If I would have to pick one story from the book that underlines how the world is changing, it is case Wärtsilä. Tomas Hakala describes the challenges of digitalization clearly and anyone in B2B, has experienced by now how customer demands and purchasing processes have transformed essentially.
“Today, customers expect their suppliers to become partners that have shared responsibility for the customer’s success“
The better we can help our customers’ customers in fulfilling their needs, the better we can ensure revenue for our customers and us. But it is not a simple thing to find new business or make existing ones grow in a tough market. For this reason, majority of digital transformation initiatives focus first on process optimization, efficiency and cost-reductions. For some, it means also scaling back the organization so that you will be better able to scale ahead.
The second thing I wish to point out from the book was a story told by Kaisu Karvala from Rovio. She highlighted the fact that top management needs to be able to speak out aloud if they are not sure or if they don’t understand something. This is sort of a taboo subject. How can I stand in front of people and tell them that I have no exact plan how this digital transformation will be done? I think however, that your employee engagement percentage will score higher if you admit that you don’t have all the answers but you are determined to find out those answers, together with your employees and that you will hire the best talent, if necessary to ensure success. After all, digital transformation is a learning path, and there are ways to increase that learning!
Talent is a key operative word here. Almost all interviewees were highlighting the same thing. You need new talent, young talent with fresh perspective and mix it with seniority and competence. You need change agents that will evangelize your transformation story inside and outside your organization and you will need someone with a holistic, 360⁰ view across your organization to lead the change as Juha Järvinen from Finnair pointed out. Järvinen also speaks in favor of job rotation which I strongly advocate as it will help cultivate more versatile leaders by broadening their horizon and help tear down any organizational silos along the way.
Shared understanding of business executives and IT, shared agenda and common goals is critical to any digital transformation program success. In some companies, CIO is the person bridging the gap between IT and business, in other cases a specific role such as CDO is appointed to ensure working dialogue between all stakeholders. It is no secret that one of the most difficult yet a key factor to success in digital transformation is ensuring employee engagement.
In general, do people wish things to change? Yes. Are they ready to change themselves? No. And what’s more, this goes through all the different organization layers alike. If your organization culture is more focused on preservation of the current state of the business than welcoming change, you are going to have to put considerable effort into leadership and management programs and employee engagement initiatives in order to reap the benefits of your transformation program. And trust me, there is no room for management by perkele when transforming your business into digital.
As for digital transformation process in general, Finnish companies have already made great progress on customer touchpoints and performance management but they are still falling short in transforming their business models.
“It is a lot simpler to do digital projects which aim for cost-efficiency than those aiming for top-line growth” – Tomas Hakala, Wärtsilä
Implementing digitalization in our own playground is far easier than envisioning altogether new business models or disruptive ideas. Tommi Uitto from Nokia offers sound advice for this and explains how we should look for certain capability or competence within our organization on which to start building on with new digital technology. So essentially looking in, before looking outside. After all, as Uitto points out, we do have all the capability and competence needed to create amazing success stories here in Finland!
So finally, this is where sisu steps in, when grit meets perseverance. Just get started, and keep moving.