Recently, there has been a contentious debate about how to protect innovation in California. The state has long been a leader in the tech sector, and in an effort to ensure that remains the case, Gov. Gavin Newsom vetoed a bill that would have imposed significant restrictions on the tech and AI industries.
While California attempts to stay at the head of the pack of innovation, it’s similarly incumbent upon business leaders to ensure their companies are adopting new technologies to remain competitive by creating the best experiences and products for their consumers.
Adoption of AI
Let’s face it, artificial intelligence is everywhere. We use it whenever we search the internet or unlock our phones with facial recognition. It’s built into our GPS, health care systems, online shopping platforms and businesses.
However, despite significant investments to transform and optimize AI across industries over the last decade, the majority of these efforts fall short of expectations. While 89% of large companies report implementing digital and AI transformation initiatives, only 31% have achieved the expected revenue increases and just 25% report the anticipated cost savings from these efforts.
The primary challenge is that we have not advanced our means of implementing these tools. As companies lead digital transformation initiatives, their management strategies need to change too.
Fortunately, there are evidence-based talent development strategies to equip leaders with the skills and tools to do this well. Based on my work with leadership teams across industries and sectors, I believe the following practical insights can help organizations navigate current and future digital transformation initiatives by developing effective talent management strategies.
First, companies must adopt a digital leadership competency model. In order to lead a successful digital transformation, leaders must develop the requisite skills and behaviors to successfully transform their organization’s mindset and culture. The most effective approach is to enact a leadership competency model (a set of core behavioral competencies across management levels) that reflects the challenges of leading teams through digital transformation initiatives.
Executive teams should implement new models, or improve existing ones, to capture core digital leadership skills and behavioral competencies such as leader agility, design thinking, collaboration, growth mindset, change management and the ability to develop talent to meet future business needs.
With a well-designed digital leadership competency model, executives can select the best leaders across levels, develop new talent and address critical skill gaps. This is a powerful tool that fosters a culture of innovation and agility, as well as a common language that cascades across the organization, and can foster success by working from the inside out.
Next, it’s important to cultivate a collaborative culture. For many organizations undergoing digital transformations, a major obstacle is the lack of collaboration across functions and business units. A common misstep is to empower a single functional unit – often the IT department – to lead digital transformational initiatives.
My experience reveals an effective approach for overcoming this critical challenge is to assess the organization’s agility practices across all functional and business units
These practices relate to environmental scanning, knowledge sharing, experimentation, rapid decision-making and learning cycles, cultivating psychological safety, and other core principles of organizational culture.
How does an organization strategically assess its agility? A central feature of this strategy is the recognition that no single department or business unit is responsible for the organization’s lack of collaboration, information-sharing or innovation. Essentially, promoting a culture of collaboration is a team effort.
After conducting the agility assessment and sharing the key findings with all stakeholders, an effective next step is to conduct group feedback sessions that allow for thoughtful interpretation of the findings and targeted changes to strengthen agility practices. For example, group feedback sessions may focus on practical steps that leaders can take to cultivate psychological safety among their teams. This could include fostering curiosity for new ideas and encouraging experimentation with new technological procedures, such as potential generative AI applications to their jobs or work processes.
By combining validated assessment data on agility practices with group feedback sessions, leadership teams can make substantive progress on cultivating a collaborative culture across the organization.
Creating a ‘playbook,’ training
Finally, leaders must develop their organization’s change management capabilities. One of the most common challenges for organizations implementing digital transformations is to develop a practical “playbook”’ to guide leaders as they manage the change process.
The change management playbook captures the overall change strategy and industry positioning, the organizational values that will facilitate the change, a change management framework that illustrates the stages of the change process, and recommended leadership practices across each stage that engender strong employee support for the goals of the digital transformation initiative. These leadership practices include targeted talent development strategies such as closing key skill gaps with training on AI tools.
In addition to generating the playbook, a highly effective practice for developing change management capabilities is to design high-impact, experiential training programs for leaders across the organization. Simulations and supportive training environments offer leaders invaluable opportunities to develop their repertoire of change management skills across the stages of a digital change initiative.
The blend of a change management playbook and a practical leadership guide, as well as highly experiential opportunities to develop change management skills via virtual simulations offers leadership teams valuable opportunities to strengthen their capabilities to lead digital transformation initiatives.
Kevin Groves is a professor of Organization Theory and Management at Pepperdine University’s Graziadio Business School and president of Groves Consulting Group.
