Published October 6, 2022 in Magazine • 9 min read • 
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During a brief period in 2020, business and its relationship with digital technology changed forever. The pandemic took digital tools, which for many companies had been a “nice to have,” and turned them into a core necessity.
In the months and years that followed, embracing these tools has often marked the difference between corporate success and failure.
But with the digital revolution now firmly established as a “must have,” how should companies be implementing it? And what role should leaders play in driving it? Having dedicated my career to digital transformation, I believe that there are six tenets that companies and their leaders need to adopt as they venture deeper into the digital decade – the title of a recent book I have written on the subject.
But what exactly is digital transformation?
It is all about companies leveraging enhanced technology to improve their business capabilities, operational efficiencies and ultimately, their customers’ experiences. If companies approach this in a structured, timely way, they can gain benefits that could give them an improved competitive advantage.
During COVID-19, the main thing I saw was both companies and their employees becoming overwhelmed by the need to get everything online. People found using digital tools from home exhausting and difficult.
But then something clicked. Across Europe, organizations started digitization projects that previously would have taken years, and sometimes they did it in a matter of months or even weeks. One survey by McKinsey showed that companies’ overall adoption of digital technologies had sped up by three to seven years in just a few months.
The business leaders who have contributed to my book highlight many of the advantages that digital technology can bring. They discuss how improved technology has the potential to change virtually every sector, to speed up cumbersome processes, to work together, to help us make more-informed decisions, and to turn the unthinkable into the achievable. They also explore the wider benefits for society: from potentially cutting carbon dioxide emissions by nearly half to detecting disease patterns and even extending our life expectancy.
It is for all these reasons that encouraging a digital revolution is not only my aspiration, but is also high on other people’s agendas, too. The European Commission has set out its own vision and targets for the successful digital transformation of Europe by 2030. By the end of this decade, 75% of companies based in the EU are expected to use digital technologies such as cloud, artificial intelligence and big data as a matter of course.
Yet there are still companies and sectors in which, after an initial acceleration during the pandemic, digitization efforts are stalling. In Germany, only one in five of the largest corporations has significantly increased investments in digitization in the recent past. Furthermore, just under a third of all Germans do not yet use online services in the areas of health, administration, education or work. One in four feels left behind by digitization.
All of this makes it clear that relying on the pandemic alone to propel the digital transformation is not enough. I believe that companies — and more specifically company leaders — have to play a defining role. We know that trust in business is high around the world. According to the 2022 Edelman Trust Barometer, perceptions towards business and employers were better than other organizations — with 77% saying they trusted their employer, and 61% trusting “business” as an institution. With trust, businesses can have influence. But they also need vision and ambition.
Our expectation is that within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers. In fact, I believe that the metaverse will be the biggest opportunity for modern business since the creation of the Internet
In the 1990s I worked at Microsoft. Bill Gates had an ambitious goal: to get a desktop computer onto every desk and into every home. He was able to turn his vision into reality and computers are now used by a majority of people in the developed world.
But beyond transforming how others lived and worked, Microsoft was on a journey of its own. As the business model grew more complex, it needed to change. I saw how the web-based collaborative platform SharePoint was able to transform the way staff could work together on projects, and how business intelligence solutions could enhance decision making by giving leaders access to real-time information and insights into the performance of their businesses.
There was one driving ethos behind each project we did at Microsoft that has stuck with me: you need to decide your goal, communicate it and then engineer backwards.
In January 2020, I joined Meta – previously known as Facebook. Like Microsoft, it has been on a transformation journey of its own. Facebook was founded 17 years ago as a single social media platform. Since then, the company has transformed into a family of apps and technologies, including Instagram, WhatsApp and Meta Quest. Having successfully shifted from being on desktop computers to mobile, pivoting to video and embracing products such as Stories and Reels, it has stayed true to its mission of building technologies to help people to connect. More recently, this has included building richer and more-immersive experiences in the metaverse, which will be the next computing platform.
Essentially, the metaverse will be a set of digital spaces, including immersive 3D experiences, that are interconnected so that you can easily move between them. It will let you do things that you cannot do in the physical world – and do them with people you cannot physically be with. Our expectation is that within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers. In fact, I believe that the metaverse will be the biggest opportunity for modern business since the creation of the Internet.
The metaverse has not been built yet, and it will not be built by Meta alone. But it is an exciting next step in technological evolution that is pushing the boundaries of what is possible. It is very different to the tech built in the early 2000s, but it is all part of the same journey of reimagining business in the digital age.
Digitalization is not going away. In fact, I was recently introduced to the “barbecue theory” by Elke Eller, former Human Resources and Labor Director at Tui, the travel company, which states that everything that can be barbecued will end up on the grill. Applied to digitization, this means that everything that can be digitized will be digitized.
The sooner business leaders understand this, and act on it, the better the chances of their companies prospering in the digital decade and beyond. While I don’t seek to give a comprehensive set of instructions for action on digital transformation, my own experiences have led me to these six recommendations for leading it:
This should be your starting point. You won’t get anywhere without these two perspectives. Business leaders need to be able to identify how their company’s digital transformation can help customers as well as society more broadly. Several authors in my book give compelling examples of how this works in practice. For example, through the use of digital tools and their intelligent freight cars, equipped with sensors and navigation modules, Deutsche Bahn is making rail-freight transport even more efficient and reliable. In the process, it is saving thousands of tons of CO2 by taking trucks off the road and emitting around 80 to 100% less CO2 than road transport.
Many authors also explore the transformative impact of digitization on healthcare. Chantal Friebertshauser, Managing Director of the pharmaceutical company MSD Germany, explores how life expectancy could be boosted considerably by digitization (perhaps by as much as 30 years over the next half century) through things such as apps that allow patients to manage their own health, and machine learning to detect expected side-effects at an early stage.
Do not make the mistake of thinking that digital transformation is all about technology and replacing or marginalizing human resources. People still count.
As Eller puts it, every transformation process should focus on people. Business leaders need to ensure that they strike a balance between having employees who make decisions themselves and good managers, who are coaches, create the vision, and enable and empower people.
I agree. To drive business return on investment, change needs to be a grassroots effort driven by users and permeated through the organization. But you also need to encourage employees to share their ideas, try new things as well as allow them to fail. As business leaders, it is our job to visualize the destination, but not to dictate how to get there. We also need to be prepared to get out of the way!
Humans are naturally resistant to change. Questioning what you have known for decades as the right way to do something requires an open, brave and agile mindset. As a leader, you also need to be prepared to make brave decisions that could include removing talented people from your organization if they are also blocking others from reaching their full potential. Identifying and empowering the people within the company who have the knowledge to bring about the change you want, as well as bringing in external talent, is key.
For digital transformation to be successful, you need to be implementing change as part of your day-to-day business. Those who treat it as a one-off project and separate from the day-to-day operations of the enterprise are going to fail.
We need to equip young people for digital transformation. High-quality digital education needs to become more mainstream so that we have a workforce with the right skills and knowledge to perform the jobs of the future. As Katrin Suder, former Secretary of State of Germany for Planning and Equipment, Cyber and Information Technology, puts it, kids need to learn “reading, writing, arithmetic, data!”
At Meta we have a motto that the journey is only ever “1% done.” Keeping pace with the change that our customers and communities are driving is an iterative process involving incremental changes. There is no finish line; recognizing this is key to success.
While the COVID-19 pandemic has accelerated the rate of digitization in many sectors, there are still many areas where progress is not as fast as it could or should be. We have a once-in-a-lifetime opportunity to ask what really matters to people, and to continue to challenge the status quo in fundamental ways using evolving technology. Company leaders need to lead the transformation.
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