The first step to DX success - Change the management mind-set 

Current status of DX promotion

According to the interim report “DX report 2” released by the Ministry of Economy, Trade and Industry on December 28, 2020, about 95% of companies are at a level where they are not working on DX at all. The results show that DX is only being implemented sporadically, and has not reached the level of sharing a sense of crisis throughout the company and lacking awareness to reform. In 2020, the pandemic was thought to have a major impact on corporate management, raising awareness of change and accelerating DX promotion, but why didn’t that happen?

What are the barriers to DX promotion?

Last year, several hearings were conducted in order to hear from employees who were involved in DX promotion about their activities and issues within the company, as a result, 2 barriers were identified from those hearings.

1) Lack of sense of crisis and adherence to the existing rules
At the time of hearing, many expressed that it was difficult to convince the management level to implement new initiatives as there’s no precedent in the company, therefore they failed to pursue. It shows the company itself is missing the opportunity to leap forward due to the management with poor evaluation skills, a culture where failure is not allowed, and lack a sense of crisis enough to change and breakthrough barriers.

2) Organizational structure that prevents the provision of a superior customer experience
All interviewees emphasized that they prioritized the customer’s voice, which is the way it should be when working on DX promotion. At the same time, they all expressed unwillingness to cooperate with other organizations in the company mainly due to lack of precedent. Some might wonder why “customer first” and “cooperation with other organizations” are relevant. The DX era is the era of VUCA, and the environment surrounding everything such as the business environment, markets, organizations and individual is changing constantly, making it hard to predict the future. Customer needs in such an era are complex and ambiguous, but there are limits to what can be done from a single organizational perspective or business area to continue to anticipate them, respond quickly and create value. The organizational structure in which inter-organizational cooperation cannot occur may hinder achieving a superior customer experience.

Two barriers demonstrate that there is a lack of support from the management in DX promotion. Many are aware of the need to train DX human resources, but it is also important that managers too are also trained. It feels that the environment for DX promotion is not yet developed. Creating an environment is important for the success of DX promotion and it is the managers who play the crucial role. Furthermore, in order to fulfil the role, primarily it is necessary for managers to understand the environment surrounding the company, take action for changes with a sense of crisis on the company’s future, and appeal to the vision to the upper-management level. How is it different from the current role of managers?

Managers required in the DX era

In an era when the environment surrounding customers was relatively stable and predictable, it was important for managers to manage progress toward the goals set and planned initially according to the strategies and rules. This is the most common management method. However, this is VUCA era, there is a possibility that the environmental change from the time when plan was formulated and if no change or adjustment are made along the way, the service might be of no value to the customer. Therefore, management that continues to maximize customer value by repeating hypothesis formation and verification in the value creation process becomes important. In that case, the members need to act autonomously, respond to change with flexibility and be willing to cooperate with others to break through barriers rather than waiting for top-down support. Managers are required to create organizational directions and frameworks in order to create a situation (so-called self-organizing team) in which the members are willing to cooperate with each other, draw out positivity from each other and cause a chemical reaction of creativity.

What awareness to have in order to successfully promote DX

In order to be successful in DX promotion, as a manger required in the DX era, all managers should be aware of the following:

• Strong sense of crisis in the current situation
• Sense of change that is not bound by conventional wisdom and methods
• Instead of leaving it to others, take action with a sense of ownership

NTT DATA is preparing training menu for managers to foster the above awareness among them and to strengthen them to new weapons instead of using the conventional mind-set as a weapon in the VUCA era.

What steps should managers take to successfully promote DX?

NTT DATA provides training for mangers in stages according to the maturity of DX promotion.

• Step 1
  Step 1 aims to understand what DX is in the first place and how the market environment is changing, and to be inspired by the DX efforts of other companies, and to be aware of the issues of their own organization. This step aims to foster sense of crisis among participants.
• Step 2
  In the VUCA era, each individual has independence regardless of organizational differences, authority and job titles. Step 2 aims to give the idea of how to interact with other organizations and how co-creation should be. In this step, managers will have a sense of change that is not bound by conventional wisdom and methods.
• Step 3
  As mentioned in the previous sections, the management layer required for DX is not a so called authority type or reformer type, but more over as supporter type, it is required to encourage the independent actions of the filed members and bring out their abilities. In step 3, participants are asked to understand what DX should be and what kind of action managers should take to support the members. This step aims to prepare themselves to act with a sense of ownership, rather than leaving it to others.

Testimonies from participants in mind change training

At present, more than 90% of the participants in the training for managers provided by NTT DATA expressed their satisfaction with trainings. In particular, the section that introduces the voices of the NTT DATA employees who actually worked on creating a DX organization as an example are well received by them as it gives them better idea of the way the organization should be in promoting DX. In addition, group work carried out after obtaining such input information has both aspects of expanding the horizons and fostering a sense of unity, and training provides the opportunity to experience the co-creation activities in the organization required for DX promotion.