Developing a Digital Mindset
How to lead your organization into the age of data, algorithms, and AI.
Learning new technological skills is essential for digital transformation. But it is not enough. Employees must be motivated to use their skills to create new opportunities. They need a digital mindset: a set of attitudes and behaviors that enable people and organizations to see how data, algorithms, and AI open up new possibilities and to chart a path for success in an increasingly technology-intensive world.
What Is a Digital Mindset?
Learning new technological skills is essential for digital transformation. But it is not enough. Employees must be motivated to use their skills to create new opportunities. They need a digital mindset. Psychologists describe mindset as a way of thinking and orienting to the world that shapes how we perceive, feel, and act. A digital mindset is a set of attitudes and behaviors that enable people and organizations to see how data, algorithms, and AI open up new possibilities and to chart a path for success in a business landscape increasingly dominated by data-intensive and intelligent technologies.
Developing a digital mindset takes work, but it’s worth the effort. Our experience shows that employees who do so are more successful in their jobs and have higher satisfaction at work, they are more likely to get promoted, and they develop useful skills that are portable should they decide to change jobs. Leaders who have a digital mindset are better able to set their organizations up for success and to build a resilient workforce. And companies that have one react faster to shifts in the market and are well positioned to take advantage of new business opportunities.
Like any other change initiative, digital transformation often encounters resistance, and early missteps are inevitable. In our experience, companies do best when they focus on two critical areas: (1) preparing people for a new digital organizational culture and (2) designing and aligning systems and processes. In this article, we lay out the basic principles of this enormous undertaking, drawing lessons from Philips, Moderna, and Unilever. These companies offer a road map for developing digital mindsets in existing talent pools and aligning systems and processes to capitalize on digital proficiency.
Building a Continuous-Learning Culture
The health services company Philips recently transitioned its core competency from supplying health products to providing digital solutions. To bring employees along, it needed to create a continuous-learning environment. Philips partnered with Cornerstone OnDemand, a cloud-based learning and HR software provider, to build an AI-powered infrastructure that adapts to learners’ specific needs and pace. Employees can share “playlists” of tailored lessons with colleagues, just as they share playlists on music-streaming services. The platform’s social media function facilitates connection between new employees and more-experienced members who can serve as mentors, fostering more-organic peer-mentor relationships than formal matching programs do.
Employees who develop digital mindsets are more successful in their jobs, have higher satisfaction at work, and are more likely to get promoted.
The ability to develop a digital mindset depends on the extent to which employees internalize the undertaking. Thinking about how they will interact with and use new tools and how those tools will help them attain superior performance is essential to a successful digital transformation.
Accelerating Adoption
Digital change is often radical, and it involves shifting shared values, norms, attitudes, and behaviors. That’s a tall order, so it is helpful to kick things off with a bold stroke: an act that commands attention and prompts everyone in the company to understand that a new direction is required. (See “What Inexperienced Leaders Get Wrong [Hint: Management].”) Examples include doing a major reorg, making an acquisition, reallocating resources, hiring a digital transformation czar who reports to the CEO, and announcing that a legacy system is being phased out.
While signaling the new order creates momentum, it isn’t enough. A bold stroke must be followed by a long march, one that begins with assessing how employees feel about the plans for digital transformation. Some may be apprehensive about the unknown; others may worry about their own capacity to learn and apply the new technology and skills to their jobs. These anxieties will affect technical and nontechnical roles. Employees may also be dubious about whether the digital transformation matters — to the company and to their jobs.
When implementing radical change, managers must carefully weigh these two key dimensions: buy-in (the degree to which people believe that the change will produce benefits for them and the organization) and capacity to learn (the extent to which people are confident that they can gain sufficient literacy to pass muster). The highest levels of adoption occur when employees are motivated to develop competence because they fully buy into the transformation strategy and feel capable of helping make it a reality.
In a digital transformation, the two dimensions combine to produce the four quadrants of a matrix of responses: oppressed, frustrated, indifferent, and inspired. In the best-case scenario, people will be in the top right quadrant, inspired by the change and believing that they have the capacity to learn digital content. Managers should assess which quadrant each of their team members falls into and then work to move individuals from one to another as needed.
The ability to develop a digital mindset depends on the extent to which employees internalize the undertaking. Thinking about how they will interact with and use new tools and how those tools will help them attain superior performance is essential to a successful digital transformation.
Accelerating Adoption
Digital change is often radical, and it involves shifting shared values, norms, attitudes, and behaviors. That’s a tall order, so it is helpful to kick things off with a bold stroke: an act that commands attention and prompts everyone in the company to understand that a new direction is required. (See “What Inexperienced Leaders Get Wrong [Hint: Management].”) Examples include doing a major reorg, making an acquisition, reallocating resources, hiring a digital transformation czar who reports to the CEO, and announcing that a legacy system is being phased out.
While signaling the new order creates momentum, it isn’t enough. A bold stroke must be followed by a long march, one that begins with assessing how employees feel about the plans for digital transformation. Some may be apprehensive about the unknown; others may worry about their own capacity to learn and apply the new technology and skills to their jobs. These anxieties will affect technical and nontechnical roles. Employees may also be dubious about whether the digital transformation matters — to the company and to their jobs.
When implementing radical change, managers must carefully weigh these two key dimensions: buy-in (the degree to which people believe that the change will produce benefits for them and the organization) and capacity to learn (the extent to which people are confident that they can gain sufficient literacy to pass muster). The highest levels of adoption occur when employees are motivated to develop competence because they fully buy into the transformation strategy and feel capable of helping make it a reality.
In a digital transformation, the two dimensions combine to produce the four quadrants of a matrix of responses: oppressed, frustrated, indifferent, and inspired. In the best-case scenario, people will be in the top right quadrant, inspired by the change and believing that they have the capacity to learn digital content. Managers should assess which quadrant each of their team members falls into and then work to move individuals from one to another as needed.
A leader’s task is not simply to adapt; it is to be adaptive. Digital transformation is not a goal that one achieves; it is the means to achieve one’s goals.
The company must continually gather data to monitor the transformation effort and assess whether employee behaviors are helping or hindering what we call the work digitization process. Leaders should study how information flows within the organization and remove institutional obstacles that might prevent employees from adopting the new process.
Digital technology and its impact on organizational structures, job roles, people’s competencies, and customer needs is ever changing. A leader’s task is not simply to adapt; it is to be adaptive. Digital transformation is not a goal that one achieves; it is the means to achieve one’s unique goals. With a digital mindset, employees across the organization are equipped to seize the opportunities our dynamic world presents.
