Title: 3 Top Leadership Priorities for Successful Digital Transformation
Date: Wednesday, Feb 14
Participants: Dave Horstein hosts Hannah Farley - Vice President of Advisory Services at Hitachi Solutions America
Dave & Hannah focus on key leadership priorities that are essential for successful digital transformation. The conversation revolved around three major aspects:
Overall, Dave & Hannah stress the importance of clear communication, effective training, and the need for accountability and reinforcement mechanisms to ensure the successful implementation of digital transformation initiatives.
global.hitachi-solutions.com
Title: 3 Top Leadership Priorities for Successful Digital Transformation
Date: Wednesday, Feb 14
Participants: Dave Horstein hosts Hannah Farley - Vice President of Advisory Services at Hitachi Solutions America
Dave & Hannah focus on key leadership priorities that are essential for successful digital transformation. The conversation revolved around three major aspects:
Overall, Dave & Hannah stress the importance of clear communication, effective training, and the need for accountability and reinforcement mechanisms to ensure the successful implementation of digital transformation initiatives.
global.hitachi-solutions.com
Dave Horstein and Hannah Farley, Hitachi Solutions Advisory Services
Folks, January was a tough year, but we made it. Okay. I can't take credit for that one, as we enter into the second month of 2024, it felt like a really great time for us to take a look at what lies ahead for what has already proven to be a very interesting year. got inflation finally tapering off. Interest rates are slowly coming back down. We're sure to be walking into a. Tumultuous election cycle and disruptive technology continues to promise incredible returns, but introduces changes that are increasingly difficult to keep up with. I'm joined by a very special guest, vice President of Advisory Services, Hannah Farley. since she's my actual boss, I've taken the liberty of writing a professionally flattering intro. And the cool thing, Hannah, is I actually use co-pilot to help me with this, a little bit of a sneak peek in the background. I uploaded Hannah's LinkedIn profile PDF to copilot and asked it to help me out here.
So some AI magic getting right to it. Hannah is the Vice President of Advisory Services at Hitachi Solutions America, where she leads a practice of seasoned advisors, including me, that help organizations achieve their desired business outcomes and realize the ROI of their most important initiatives. has over 15 years of experience in leading and managing change projects for large scale global system implementations and enhancements. She's also a pro size certified change practitioner and holds a Master of Science degree in human resources. Organizational development. What did you think about that, Hannah?
Uh, I love it. It's very flattering. I would say the 15 years is, is more around 20. Um, but the 15 years I think, lends to that large scale global, uh, you know, change experience. Whereas I started in the change realm with, with smaller projects and smaller groups of probably around 3000 people years before that.
But yeah. I love it. And, um, you're gonna have to "learn" me a little bit more on copilot so I can figure out how to write, write a flattering review about you, Dave.
That's right. Yeah. And we are in review season, so perfect timing. That, that didn't drive any of this intro, by the way. Um, today's format, it's gonna be a little bit like a hot seat. Um, so I've come up with a few topics that I think are relevant based on everything I just talked about with the start of this year. Um, we are having a lot of conversations with executives across the globe. It's safe to say around how they should be prioritizing now that we've got a little bit more certainty in the market. And boards are, are loosening the purse strings a little bit. Um, trying to find investments that are more strategic in nature, uh, especially around the cost optimization side. But I want, what I wanted to do to get started is throw a little bit of a scenario at you. I. Where, let's pretend A-C-I-O-A-C-O-O is coming to you and they're just trying to figure out, they've got their budgets set for 2024. They're trying to figure out, figure out how to prioritize their digital initiatives. Knowing that there's so much complexity right now in this digital disruption and everyone's really thinking about cost optimization, revenue generation, would you respond to that? How should we prioritize our digital investments in 2024?
Oh, that's a really interesting question. Um, since you just said you're gonna put me in the hot seat, I feel like I should be blindfolded for this, so I'm just maybe, maybe I'll do that here.
We will plan it for the next one.
Perfect. Um, so, you know, I think obviously the timing of the, of, you know, all the things that you're discussing do play a part in what people should prioritize, but I think the approach to it isn't extremely different, I think, and. this time, then I think it would be any time, but really understanding if they've got an understanding of what they need to do from a strategic perspective to drive their business forward. You know, that's, that's really the first part of it. Businesses have to have, um, a well thought out strategy, right.
And vision for where they want to go. Um, and so if they've got that. well defined, um, and they've got it clear, um, and very well communicated across their organization. Um, then I think that's how they can prioritize what they're doing, what's gonna go help them achieve, um, the vision and strategy, right?
So every initiative, if it's not helping you, achieve what your goals that you're set out, uh, to, to growing the business. I'm sorry you guys, can we pause for a second? I hope we can cut this out. There's this major hammering that is like in my brain right now. Um,
So Hannah, today's format, it will be a little bit like a hot seat where I'm going to throw some questions at you. You could take a moment before you drop some deep insights onto us. But what I figured we'd start with is a little bit of a scenario where we're going to focus on prioritizing digital initiatives. Let's pretend a COO is coming to you. saying, Hannah, I've got my budgets for 2024. Uh, they were based on some high-level objectives that I agreed to with the board, but I've gotta figure out how to prioritize this spend. should I do? I.
Ah, that's an excellent, excellent question. Excellent scenario. So, you know. Given the climate of everything that we're going through right now, um, I don't think that really shifts the approach I would take here. Right? I would first go in and ask that executive like, what's your strategy? What's your vision, you know, for, for the organization?
So if they've got their objectives outlined, how do those things really fit into how. They're hoping to transition their organization and what their plan is for that. Right? Is it a, is it a one year, three year, five year plan? So understanding how those things fit. Um, and then I would say, let's go look at the strategic initiatives and figure out which ones are going to give them like the most return on investment for what they need to do.
Right. And something. I give every client I speak with c-suite, you know, um, director level, even down to, um, some of you know. I would say end users and organizations, um, is if you prioritize everything, you prioritize nothing. And a big mistake I see organizations make so frequently is saying, Hey, we have all these initiatives we need, um, now we've got, uh, this transformation we're going to make.
We've got all these directives. We're gonna go do them all at once. Right. Um. usually just not beneficial at all for the org. So I would say let's dig into the strategy, figure out what is going to, um, really help them kick that off, um, and prioritize from that perspective. Um, something else I would have them look at is, you know, I. When we're looking at change initiatives, um, any sort of initiative is a change initiative, right? Because most of the time it's going to impact the way people work within an organization. so I would also say when you're picking out how we should prioritize it, look at how it's gonna fall within, um, the distribution of how it's going to impact the people.
Right? Uh, how long would this initiative take? How big of a people impact is it going to be? Right? Because you have to have some sort of a version of a change portfolio to understand if things are gonna be falling at the right time, right? Because if we roll something out that isn't coming at an opportune time, they may not get the return on investment that they're hoping for.
So from a prioritization perspective, you know, there are a lot of, a lot of things, um, that you could look at, but I would say, um, first define. The three top priorities, um, for the organization, understanding then how, um. Those pro projects and priorities may overlap. Is there any project collision? How are the people gonna be impacted? Are there times of the year or the month or the quarter that we should avoid certain activities to make sure that they're really effective at the implementation? Because the end of the day, if something's implemented poorly, if they're not gonna get the return on investment and achieve the objectives that they were hoping for at first.
I agree with. All of that. And as you're talking, I'm thinking of organizations I've worked with where there, there wasn't that intentionality behind their initiatives. And it tended to be whoever had the loudest voice on the executive team got their initiatives through. I've observed in those organizations is a lot of.
I don't know a better word than chaos where people don't know what to prioritize. So projects just get spun up and then there's no clarity over how resources are being allocated. People are getting change, fatigue projects are getting paused partway through because they can't get the resources they need, and there's no movement forward in the organization towards those strategic objectives because no one's paying attention to them. They're just giving them lip service. So spot on Hannah.
Absolutely. If I could add, I know you probably have another question, but if I could add to that guidance I would provide to the leaders of these organizations is be really conscientious, right? Of this part of it because what you just called out, um, you know, seeing initiatives start and then kind of, uh, fall off or not come to fruition.
It can be really damaging to a culture in, in different ways. Right. And I see this happen quite a bit when we go into, uh, assess an organization to figure out what their climate is for change and what their appetite is and how ready the business would be to implement these things. We try to figure out what the culture is.
And I work with a lot of organizations where, um. A lot of projects have started, but then other things have taken priority. They didn't put the resources that they really needed to to get it off the ground and up and running and get it truly adopted. And so those cultures shift into, you know what? I'll believe it when I see it, sort of thing.
And so people stop paying attention. So if, if leaders aren't super cautious, then they can create a lot of noise. And when you create noise. stop listening, right? So it has to be meaningful. Um, so I would say be, be conscientious of that, right? Something else it does to a culture. If you start a lot of initiatives and, um, you haven't prioritized what's happening, you get people to go work on things. People, people wanna go do a good job, right? Like I work with people at different organizations every day and have for years, and I would say the vast majority of people, they don't wake up in the morning saying, I'm gonna go in and do a bad job today. Right? They wanna go do their best and they really, really wanna try.
And so. Um, as leaders, if we go through and we let a lot, we allow, um, this culture to permeate where we start, a lot of projects that our employees don't see actually finished outside of that, we'll believe it when we see it. We've never really had to change. that have worked and, you know, put their hours and their time and their passion into these projects that really don't get off the ground.
It's, it's very demoralizing for them, right? Like, throw away work. I did all of this stuff and, and now it doesn't count. And so then you start really eroding the trust and the passion that you have in your workforce.
Yeah, that, that makes a ton of sense, Hannah. And something that I've actually seen, uh, firsthand working with some organizations. I'm gonna switch gears a little bit and, and pose the next scenario to you. Uh, and this one I think you're gonna like, it's, it's right up your wheelhouse. We have been doing a lot of digital, um, or data strategies for organizations over the past couple of years as everyone's preparing for the AI revolution. Something we've been having quite a few conversations about is what we do with employees. As we increase automation and leverage technologies like artificial intelligence, uh, to make, uh, to make our employees more productive in their day to day. So the question becomes, Hannah, what, what do we do with these employees?
How do we help them refocus on more strategic initiatives we roll out this new technology?
I adore this question, Dave. Um, so this, this is just on the forefront of, you know, nearly every change initiative, um, that we see lately. Um, and even before we, we got so heavily into AI even 10 years ago when digital transformation was, you know, uh, buzzing and we were creating efficiencies in work. So, um, it was, you know. Leaning away from having employees do a lot of the tactical work and leading into, you know, different things that could be automated. Um, there are conversations to be had about that. And now what AI's doing is just progressing it quite a bit, right? It's making it happen faster. Um, I think I. From what I've gathered in my experience, people are afraid of it a little bit, right?
They're like, oh my gosh, this, this is absolutely gonna take, take my job away. Um, and I haven't seen that as much. Of course, that's a possibility and that can happen. Um, but you know, I think what, what companies need to know, what leaders need to know too, is their people need to understand what the vision is for them going forward, right?
And so a lot of times it's. hey, we're gonna automate these things, which means we're taking away this tactical thing that you might do daily. And that's hard for people to give up because sometimes they feel like their value is caught in that thing that they do daily when really, um, they've gotta, I mean, people are smart and resourceful.
We just have to go shift the direction and be really clear with. What the expectations on their role would be going forward. And so I see a lot of things where we're creating efficiencies, but the companies still need the people. Right. And I can give you an example of a project where I've seen this happen. Um, you know, not with ai, but recently, you know, in, in, uh, another transformation. Um, but being really clear to say, Hey, you know what? You don't have to do this tactical stuff now. Now we need you to help us work more on this strategic value add, you know. Um, help us look at the insights we're getting from AI or from the efficiencies that we're gaining to help push our value proposition in the market.
Right? And you can, it's easy to say, but people need to know at that point too, like, what to stop, start, continue, and then to, uh, you know, really I would say, help them get rid of the fear, you know, that they're not going to produce value because of these efficiencies that are now being created. I.
Yeah. What's encouraging, and I've said this on previous episodes. We're, we're not hearing a lot of, uh, asks to help with, uh, reductions in headcount. It, it is a lot of, uh, discussion around how do we upskill the reskill. And so as we're, a, a data strategy for, as an example, and in those, we're trying to look at the skillsets that are going to be needed
Mm-Hmm.
as we, as we shift the organization and, and help automate what does that open up, what capabilities in the organization. Does that open up that they didn't have previously? And how can we leverage the people they have today and upskill them so that they can drive value in those new areas or new capabilities? So it's, it's been really encouraging to, to hear the, the buy-in from leaders, um, over the past couple years there.
Absolutely. And I'm gonna add something to this that I think you're not asking, but it is, uh, it, it is kind of a soapbox of mine that I'll plug in on probably any podcast that we have. Um, I, I need to look at the study. I think it's a McKenzie study, and then there's maybe another one. And so, I'll probably butcher the statistics.
We can, we can republish those, but there's something like. 92% of employees don't understand their co their company strategy. Right. Which is, um, it's a kind of, it's a startling percentage, right? When, and it depends on who you ask. So, if you ask, and, and I've seen this at companies like that I work with directly.
We see it at our company sometimes too. I see it sometimes as a leader and have to like, walk myself out of this and think about where our people are, but. You know, leadership, especially when you're thinking of the c-suite level, right? And, and senior leadership teams, they live in strategy. And so, to them, if you go ask, if I go ask a client or a CEO, how many, like what percentage of your people?
All the way down to the basically frontline employees understand your organization's strategy. They'll say, oh, like 75, 80, 90%, right? And I'm like, actually, no. They don't, maybe 8% of your people understand that, right? Because the people who live in strategy and may talk about it a little bit, um, you know. They feel like because they're living in it, other people must understand it. Right? And from a change perspective, we know we have to present things in multiple ways, multiple times for it to really resonate to meet people where they are. And so with these things that we're talking about with, with ai, with creating efficiencies, with the innovation that comes with that and figuring out. What these new roles look like for people, and I'm, I'm with you. I haven't had a company say, Hey, help me reduce headcount. It's, Hey, we wanna keep the headcount, help us figure out how to transition these people so we get to keep these good humans that we have, um, transition them into doing different kinds of work that's now gonna help us move forward.
Right? And so one of the first parts of that is making sure every employee in the company has line of sight into how, what they do daily. Executes the strategy, right? And it takes a level of detail. 'cause that means, you know, your c-suite executives need to take that down to the leaders below them. And those leaders need to take it down to the leaders below them.
And those leaders need to take it down to the leaders below them. And, um, and it, and it has to be consistent messaging that permeates to the lowest levels of the organization, you know, for that to be successful. It helps eradicate the fear that people have about these things happening and lets them know, hey, you're a.
You're a part of our plan. Um, and here's what we need you to go and do now. Right. And I've, I've always heard that, um. Being clear is being kind. And I think that that's applicable in any personal relationship that we have, right? With our employees. If we're really clear, um, you know, it's very, it's a kind thing to our employees and so go set the expectations and make sure they really understand your vision and strategy and how they're going to fit into it. And a lot of times like that in and of itself, if they understand they're gonna fit, they're gonna try to be resourceful enough on their own to go and fit in those roles. They need support and preparedness. Right. But they will.
For sure, and it, it gives a sense of purpose, like the work I'm doing, it's driving towards a, a greater good, a greater, greater strategy. And that clarity can help people feel that ease that you're talking about. So it's so important for leaders to be able to articulate that and to repeat it whenever they can.
Absolutely. absolutely. If one thing, if, if we've got a leader listening to this one thing, um, you know, I would, I hear this all the time. They, someone should know this. Because I said it to them in a meeting in October or in April or however many months ago. Right, because I said this, like, they must know it. Um, and that's just not true, right? That's not how the, that's not how human brains absorb things. They could hear something, but they need to hear it over and over, and they also. also need reinforcement for what that messaging is. So like, don't feel like, because you've said something once, people have taken what you've said.
Right. And they understand what they now need to go and do with that. Um, you have to be, um. Patient with people, right? Even, even the smartest folks, there's a lot of stuff going on in their mind. So make sure you're clear and that, and you message out what you feel people need to hear to keep the, uh, you know, the organizational projects and the objectives moving in the organization.
So communicate it often and that helps.
Perfect. So I'm gonna get us to the final part of our scenario here and then tying it all together. Hannah, so far, thank you. You've helped me prioritize my initiatives. You've helped me figure out. What I'm gonna do to help upskill and reskill our employees. I'm rolling out this new cutting edge technology and I have to figure out how to help my people adopt it. How do I do that?
Now I'm rolling. Yeah, there's a lot to unpack there. So, you know, when you think about rolling out something new, a change of any sort, and then maybe it's a cutting edge technology or maybe it's a new process. Right? Or maybe it's a new way of working.
Um. You know, there are a whole lot of things that you can impact with that. Um, but there are special things to, to think about. First, people need awareness. Make sure they're aware of what's happening. And like I said, clearness is kindness. So be really clear in setting expectations. Be clear and tell people what to stop doing, start doing, and continue doing.
Right. Um, all of this is, it's enablement. It's enabling them to go out and work in this new world because these things that we're implementing, it's, it's. It's a new future state of the business and the organization, right? They're trying to get to, make sure they're prepared. So training is something that I find people underestimate the value of doing well, and most companies don't, are not effective at it, right?
If you're effective in training, um, you know, it takes a lot of hours to go develop something that's gonna be really. Really relevant. And so make sure any sort of training is role-based and relevant. So don't roll out one training for, you know, entire groups of people. If they need to know different things about how to interact, show them what they need to do, um, in, I.
In their day in a life in the new future state and give them opportunities to have experiences with that. Right? Especially if it's technology, some hands-on exercises and experiences and things like that. And I think a lot of leaders think, okay, cool, we've communicated and now we're, we're training and we've trained. That's it. We've made the transition. And I have to say that's just the start of it. Turning on a system or, or starting day one of a new process. Once you've communicated. And once you've trained day one, starting, it is really the start of your battle from an adoption perspective. And I call it a battle just because, um, you know, humans innately.
Fall back to old behaviors in any sort of a change management exercise, we're asking people to change their habits, their behaviors, or their beliefs about something. Right? And that's true even for digital technologies. And so, um, even the, the folks we talked earlier, I said, you know, hey, I've never met a person who said I wanna go in and do a bad job at work today.
Right? and I believe that to be true. Um, but. Humans by nature revert to what we know best are automatic competencies, right? Those things that are habits that become second nature to us. And so what you have to do at that point, you've rolled it out, you've trained 'em, you're ready to go. Now you need. Some behavioral reinforcement mechanisms in place and some accountability measures, and there are lots of ways you can do that depending on, um, what you're rolling out. You know, I think about CRM systems or something that, you know, we do quite a bit, uh, of, you know, at, uh, at our company, um, and. With those, like we say, Hey, what are your accountability measures? Um, if something's in the CRM system, is that your accountability measure? If somebody's logging into the system, and a lot of times that that's not it, right? But if you don't have accountability, like some sort of reporting to say, uh, are these people doing the things that we need them to do, uh, to meet our objectives, uh, you know, and to fall in line.
In the execution of this strategy that we've developed. And if not, how are we gonna reinforce the behaviors? Right. And there's so many ways to do that. You can incentivize, you know, the behaviors, um, through, I mean there are monetary incentivizations, there are different things like that. Um, and um, there's also like just making sure that communication still stays a part of it.
So, um, are you. Are managers holding the frontline employees accountable for, uh, making sure that they're executing the changes are second line managers holding the managers accountable for making sure that the frontline employees are doing what they need to do, right? So they're multi-level of that. So I would say just, just because you've trained and communicated does not mean, um, that you're gonna ensure adoption.
You have to have that reinforcement. Um, and it. Accountability planning in place to create sustainable change. And that's the biggest thing. Nobody wants to, everybody wants to roll out a change and think it, it's just gonna stick, but make it, um, and make it sustainable and plan really well for that.
Yeah. That's the part that I always reinforce when I'm first talking to an organization's. I just used the word the importance of reinforcement. As, as I've learned from you years ago, people revert back to those old habits, behaviors, and beliefs, and it's, it's incredibly important in these rollouts. We're planning for the reinforcement mechanisms to ensure that people aren't reverting, that they are adopting these new future states or their, their new future state behaviors so that their, the organization is, is attaining the return on investment that they actually seek to achieve from the initiative to begin with.
Yeah. And so a little example I like to use, 'cause I think sometimes when we talk about this human behavior stuff, it sounds kind of soft and machine, it also feels unrelatable, right? Like, it sounds like it's gonna be really complicated from an organization perspective and it, and it can be, but I think about an example of like. I'll try to make healthier, uh. Eating choices. Right. And for years, every Monday I'd start a diet and I'd eat chicken and broccoli on Monday and chicken and broccoli on Tuesday. And then I'd get busy and later in the week I revert to like what's natural to me, which would be ordering pizza, right? Or Chinese food or something like that. Um, and it's because. If I'm get, if I get busy, even though I know I need to make this right decision, my habit would be, Hey, I'm busy, so I'm gonna go revert back to this. And it's really hard to get outta that. So if you think about anytime you've made a personal change and what you had to do to really make that concrete, how you held yourself accountable or somebody else, you know, for those things, those things all still apply in the business world, right?
It's, it's figuring out how to shift habits, behaviors, and beliefs.
And people are gonna find the path, at least resistance. And that's typically what they, what they know and what they've known for a long time.
sure.
Uh, well, Hannah Farley, vice President of Advisory Services here at Hitachi Solutions, thank you so much. In less than 30 minutes, I think we've managed to, to walk through a real digital transformation roadmap approach. That any organization could benefit from. So really appreciate you being on to our listeners as always. I've got three things written down that I think you should really take back with you. The first I had asked Hannah about prioritizing digital initiatives. Where do you start with that? And she took it back to my favorite place strategy. How do we make sure that the digital initiatives that we are about to embark on as an organization help us as a business achieve our strategy and the goals and objectives that we've already committed to? The second thing we're talking about upskilling, reskilling employees and helping them fit into the new future state. need to ensure that they have a line of sight into the strategy I just talked about so they can see where they're gonna play critical roles in helping the organization grow as they upskill into new areas. The third thing, we're helping employees adopt new cutting edge technology, it's important that we communicate, let them know what they should be, what they should start doing, what they need to stop doing.
What they should continue doing and also ensure that we're training effectively, know what works, how your people learn best, and build tailored training programs to ensure they have the skills to adopt this cutting edge technology that we're rolling out to them. Thank you listeners for hanging out with us.
If you liked what you heard, be sure to check us out@global.hitachi solution.com and be sure to subscribe to our podcast at wherever you download your favorite podcasts. Talk to you next time.