Leadership in digitalization

© Marko Luhtala 2019
Click to edit Master title style
Leadership in digitalization
- Why majority of businesses fail in the digital
transformation ? -
October 2019
MARKO LUHTALA
Ajantasalla.fi

My 20-year personal journey in digitalization
2
Early adopter
eBusiness director at Nokia, 1999–2002
Solution provider
Sales director/Enterprise solutions at Nokia, 2002–2005
User of digital technology
widely in business
Director/ VP of Retail at Nokia, 2006–2010
Solution provider, SaaS-entrepreneur
CEO at NearMe Services, 2010–2016
Advisor and implementer
Digitalization consultant at Ajantasalla, 2016-
MARKO LUHTALA

Only 16%
of businesses have succeeded in the digital
transformation and achieved sustainable
results
Source: McKinsey 2018
3
When the hype fades and it's back to reality

First, what is digitalization in my mind
4
BUILDING GROWTH AND COMPETITIVE EDGE
WITH DIGITAL TECHNOLOGY
CEO’s modern toolbox for better strategies and more efficient execution
Leadership challenge, not a technology problem
A transition to the digital economy, not an IT-project
Industries are transforming, companies must follow

© Marko Luhtala 2019 5
Many drivers of the digital economy
challenge your “Secret Sauce”

Can you survive success?
6
” Recognizing the need for change may be OK,
but actual acceptance is missing.”
Impulse to Digitalization
Under compulsion
Visionary management
Born to challenge
Fits the culture

Many companies either underestimate or overhype
digitalization
7
“Digitalization is a fancy
word for an IT-project!”
>40% OF 29
EXECUTIVES:
“Enthusiastic board will develop
ten ideas in an hour, of which at
least nine solve problems that the
customer does not actually have”
DO NOT LEAD THE CUSTOMER
ASTRAY!

Only in 11% of companies
CEO and Chairman agreed upon the impact
and direction of digitalization
Source: Ajantasalla 2017-2018
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Do you have an agreement on
where you want to go?

Executives face a big
pressure to cut the
digitalization budget
proposals
”Old business”
complains that
”new business” is
eating their EBITA
Digitalization requires new
kind of investments in
software, skills and external
services that take time to
pay back
Will the “heroes of the EBITA mine” fall behind?
9
“We had a vision of a smart product and data-driven business already
five years ago. Back then, we lacked the money and the courage to act
on it. Now, there are other competitors vying for the same market, and
we’ve lost our advantage.”

Why is this so difficult?
10
New business tools
that people don’t
know yet how to
use
Changes are
non-linear
The strategy has a lot
more uncertainty
The company
culture is
challenged
Do you know how the company will look like in 3-5
years? What digital skills and processes are needed?

A company’s readiness for digitalization
depends on four areas
11
Clear and attractive
Realistic roadmap
Vision for the
digital
economy?
Company
culture?
Digital experience
Understanding digital tasks and
roles
Network of digitally
savvy partners
Availability and quality of data
Status of backend systems
e.g. ERP, CRM
Size of the ICT team and investments
Competences?
ICT
infrastructure?
Invests in what’s new
Encourages trial and error
Agile and fact-based decision
making

What is your ambition level in
the digital economy?
12
NEW BUSINESS FROM DIGI AND DATA
New business models, commercial digital services,
smart products, disruption
IMPROVING CUSTOMER EXPERIENCE
Buyer personas, customer journey, omnichannel,
360°, CLV, personalize
INTERNAL EFFICIENCY
Focus on process and IT-development, automation and data

Digitalization can create unique
customer value in four ways
13
MAKE YOUR PRODUCTS
AND SERVICES SMARTER
APPLY NEW DIGITAL
BUSINESS MODELS
1 2
SCALE YOUR SALES
AND OPERATIONS
3
TURN DATA INTO A
STRATEGIC ASSET
4

Go on an excursion into the future
14
” The management
needs a quick tour to
digitalization that
consists of
indisputable
examples and
ambitious goals.”

CEO and board must share a common vision
for the digital economy
15
” As a business executive, I used to feel in
control of the market and the business. Now
you can’t be so sure anymore. ”

Make sure that the leadership team is awake
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” Business executives often claim that they are seeking growth from digitalization,
artificial intelligence, or some other trending word. To me, that says that the
management does not yet have a clue as to what they plan to do.”
• What is the understanding of the team about
digitalization and its significance?
• Does the team have an appropriate sense of urgency?
• Does the senior management “stick its neck out”?

A good acid test for the leadership
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are you ready to cannibalize
your existing business to
build a new one?
When the time comes

Where are you in digitalization
18

Are you ready for your journey
to the digital economy?
19
1
2
3
4
5
Does the leadership team have an appealing vision
and a shared view on digitalization?
Does your culture support the transition to the digital
economy?
Do you know how the company will look like in 3-5
years? What digital skills and processes are needed?
Have your customers accepted and sales people
adopted the new digital services and business
models?
Have you engaged data and AI widely in the decision
making?

You can download my presentations at
www.ajantasalla.fi
20

Leadership in digitalization

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