Transformational Leadership Theory: What CIOs Need to Know.

by Chris Futcher

Transformational Leadership Theory - What CIOs Need To Know - Cavendish Wood

Transformational Leadership Theory was developed by James Macgregor Burns and involves ways to improve the work of organisations and to inspire the people in them. According to the theory, workers learn to support each other and their company and to work harder because of trust, loyalty, and respect for their leader. This is different from transactional leadership, which works by offering and taking away rewards and benefits.

Using Transformational Leadership Theory for Digital Change.

Everything in business is going digital, and a company that doesn’t follow will find it difficult to be profitable. Employees typically don’t like change, so company Chief Information Officers (CIOs) need to find ways to get them excited about it. Transformational leaders focus on four ways to get workers on board, according to researcher Bernard M Bass:

  • Inspirational motivation
  • Individual consideration
  • Idealised influence
  • Intellectual stimulation.

Bringing digital change into a company takes hard work from people who are inspired, motivated and intellectually capable of making it happen.

 

How Company Culture Affects Digital Transformation.

CIOs need to remember large-scale changes like this are about people, not processes. Going digital begins by changing the mindset of workers away from the fear of being replaced by robots, artificial intelligence, or computer processes.

People need to have common goals, be excited by the new technology, and understand the possibilities it offers. That means having to change company culture if you want your digital agenda to succeed, empower your workers, and get them to support the transformation.

How Company Culture Affects Digital Transformation - Cavendish Wood

Employees have to accept how their way of working will change and the new training they might need to do their jobs. Communications will change because of new technology such as social media, instant chat, and video conferencing options. The Internet of Things will affect the way equipment is serviced and maintained, and how customers buy goods.

Workers who don’t feel positive about the digital changes are likely to cause delays and to be less successful in learning the new methods.

 

Developing a Digital Transformation Strategy.

Digital transformation is happening everywhere. Research by Gartner shows over 125,000 companies started going digital in 2016 and believe they will increase revenue by more than 80% by 2020. The problem is, only 27% of businesses actually have a strategy for doing so.

To escape the status quo and make digital change work for your organisation, it’s important to put a strong culture change in place using transformational leadership styles.

Developing a Digital Transformation Strategy - Cavendish Wood

Developing a workable strategy means:

  • Creating a vision, based on your long-term goals. Focus on what you want to achieve and the experience you want your customers and employees to have. Look at what you need to do to get there, and the short-term actions you will have to take to do so. Be realistic about what’s possible and what isn’t, or your workers will be overwhelmed and unable to be excited.

  • Analyse your market to find out where your competitors are headed. Make sure you are able to offer the same products or services in the future as they are going to. Keep up to date with new ideas they have, to avoid getting left behind. You might have to go outside your industry to look for new ideas that will keep you competitive.

  • Design the experience you want to give your staff and clients. Research shows 93% of business leaders think their success depends on the digital experience their customers have. Figure out how you want digital transformation to add value to your users. For customers, this might mean a better experience shopping online. For staff, it could be a faster, simpler way of doing their work with a new software application or platform.

  • Assess where you are now. This enables you to map out the route between your current position and end vision, with all the gaps in between. Look carefully at your current digital situation, and find out what you’ll need to get (and do) to reach your goal. Set your priorities and consider the cost involved, and how you will finance the process.

  • Get the skills you need to make the shift. Whether this means a leadership expert, a professional consultant, or a technology specialist, you should either employ or partner with the right person to oversee the change. Train your staff in the skills they will need for the new ways of working or get help from the software companies you’re working with to do so.

By becoming a transformational leader and a role model for digital change you can make sure your company avoids “Digital Darwinism”, which happens when technology and society change faster than companies can keep up. This caused the loss of almost half a billion jobs when companies like Blockbuster, ToysRUs closed down because they were unable to adapt.

Digital Darwinism - Cavendish Wood

 

Examples of Transformational Leadership.

Transformational leadership theory has helped several companies make the shift to digital successfully, including:

Domino’s Pizza

This fast-food chain recently made it possible for customers to order pizza from any smart device including watches and TVs using its “AnyWhere” platform. It was still ironing out kinks in the process as of 2018 but hopes to have these under control soon.

Town of Cary, NC

Nicole Raimundo, the resident CIO of Cary, NC, is making major changes to the way the town does business, by dropping old methods such as work orders and permits. These are replaced with Salesforce software, which is also used to manage utility payments, registration for parks and recreation, and other processes. A new app built for Amazon Echo, plus messaging through chatbots, lets people open work orders without having to call by phone.

The CIO’s team are also looking into using the Internet of Things to manage smart town lighting, smart parking, and smart recycling. This is a big step from how transactional leaders typically manage governmental operations.

Examples of Transformational Leadership - Cavendish Wood

 

Summary.

Transformational styles of leadership can help your company meet the demands of the digital market. It’s not only about getting technological skill sets, however. The tools are only as effective as the people using them, so major cultural changes are necessary to take workers along on the journey with you. Motivate them to be positive and enthusiastic, upskill them to handle the new demands of their work, and empower them to understand how the changes add value to their work and their lives.

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