Leading a 360-Degree Digital Transition

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AccorHotels Group has spent much of the past decade under digital siege. From one direction, Airbnb threatens to upend its traditional hospitality business model. From the other, online aggregators like Booking.com cut into margins and undermine Accor’s ability to manage its inventory. Accor’s response has been decisive – it has transformed itself into a formidable digital competitor by combining the advantages of both scale and speed. But its years-long effort has also highlighted a key challenge for corporate leaders faced with chronic disruption: Becoming a digital leader is as much about strong, bold management as it is about technological savvy – maybe more.

Many describe digital innovation as a wave, which implies that once it passes, everything will resolve to a new normal. But we see it as a tide that is in constant and powerful flux. Hyperconnectivity; massive, cloud-based computing power; streams of data tamed by predictive analytics – all are colliding with trillions in investment capital to produce a new era for business, characterized by constant innovation, the prevalence of predictive analytics and dramatically accelerating cycle times.

Speed – which has long been something of a holy grail for the leaders of large companies – is no longer a nice-to-have, but an essential capability that will separate winners from losers. It is not just a matter of smart thinking and anticipation. Companies also need to accelerate the deployment of digitally powered processes, customer experiences and ways of working across global organizations and teams. If creating a platform for digital evolution is not among a CEO’s top two priorities over the next two to three years, his or her company runs the risk of being dramatically displaced in its own industry.

The magnitude of this digital challenge can look overwhelming. But it becomes manageable when leaders understand that a digital transition is not a linear journey, from A to B; it is a voyage toward a target that will shift over time. In this environment, the goal is to create an organization that is close enough to the market to detect when change is essential and agile enough to respond fast with the most competitive solution. While every industry and every company feels the impact of this digital challenge differently, we’ve found that an agile organization has the best chance of finding the correct path and adapting as necessary.

In our experience across many companies in several industries, real and practical digital transition combines managerial practices that leadership teams have examined for years, but have rarely implemented in full: frontline empowerment, organizational flexibility, cross-functional collaboration, decision making based on quantitative analysis, linking strategy to execution and adapting continually.

In a digital world, these capabilities form the composite set of must-have skills. Developing those skills is a journey involving the entire organization, to build a new, more adaptable management model. The most advanced leadership teams break the challenge into a series of manageable steps: Define the problem and a point on the horizon, choreograph the change, orchestrate the transition and turbocharge the organization’s DNA.