On January 15, 2009, when the US Airways Airbus A320 made an emergency landing on the Hudson River and almost all passengers remained uninjured, radio stations, TV channels, and newspapers dispatched their reporters. Information and images about the incident trickled into the evening news and the next morning's reports.
Today, in similar events, numerous on-site observers typically report immediately via "X" or blogs. News are available in real-time and for free.
This fundamental shift in the information architecture has made it increasingly difficult for publishers to generate profits both offline and online. Axel Springer recognized this impending shift early on and was fully aware of its impacts. The company quickly decided on a bold corporate restructuring. Today, Springer CEO Döpfner even speaks of a "digital-only approach," which sounds quite daring for a publisher known for the Bild newspaper. Yet, foresight and consistent implementation have paid off for the company. By gradually phasing out print reporting and expanding digital sectors, including strategic acquisitions of online portals like "StepStone" and "idealo," Europe’s largest publishing house stands strong today.
The transformation of Axel Springer Verlag is a necessary evolution, as seen in many past decades. Technological revolutions change the framework conditions. Those who adapt have the chance to remain successful, perhaps even more so. Those who don’t will eventually fade away.
In this article, we will explore why readiness and expertise in adapting the business model during times of digital upheaval are so important, how companies can maximize their return on transformation investments, and how an Interim CIO can be the key piece in this puzzle.
The Importance of Digital Transformation for Sustainable Business Success
Digital transformation presents significant challenges for companies but also offers opportunities for sustainable success, as demonstrated by publishing houses like Axel Springer. With declining sales of printed publications and dwindling advertising revenues, the traditional publishing industry was forced to rethink its business models. Transitioning to digital platforms and content became a strategic necessity to stay competitive.
Axel Springer responded with a comprehensive transformation that included not only technological innovations but also a realignment of content and distribution channels.
Transforming a decades-old business model and its associated corporate culture is a complex task. Additional top-level expertise is beneficial here. Adapting the business strategy requires careful planning and systematic implementation. An Interim CIO from Swiss Interim Management can contribute by supporting the cultural shift within the company and by tackling the technological challenges.
Key Considerations for Executing a Digital Transformation in Your Company
Like any change process, digital transformation in a company goes through several phases that should be implemented sequentially. It's important to create broad readiness for change within the company. The entire team must understand that maintaining the status quo is not an option; on the contrary, it can pose a greater long-term risk to an organization than taking the proverbial plunge into cold water.
The Backbone of Transformation: A Modern IT Landscape
A comprehensive strategic shift toward a more digital business model requires an adjustment of the digital landscape within the company. It forms the foundation that allows for a smooth modernization of the company.
A large-scale transformation process requires resources, and modern IT provides the foundation for efficiency, flexibility, and innovation. It makes employees more productive by automating repetitive tasks, allowing them to focus on more strategic and value-added activities, which are particularly important during comprehensive transformation.
Additionally, modern IT allows companies to adapt more quickly to new changes. The purely digital market is much more dynamic than traditional markets. Axel Springer’s competitors are no longer just based in one location but may now be situated in Silicon Valley. Therefore, the technical component must be of the highest standard and globally competitive.
Furthermore, a modern IT infrastructure provides the foundation for gaining competitive advantages and can even create new business opportunities through technologies such as big data, artificial intelligence, and machine learning.
Additionally, a modern IT landscape enhances the company's security and data protection by implementing robust security measures and ensuring compliance with legal regulations.
John Kotter’s 8-Step Process for Successful Change
Business thought leader John Kotter described eight aspects of managing change processes in companies in his book "Leading Change." His insights are valued by experts and business leaders worldwide. Below are these apects applied to digital transformation:
1. Create a Sense of Urgency for Digital Transformation
Analyze current digital systems, processes, and challenges. Show why modernizing the digital landscape is essential to stay competitive and meet business demands. Communicate this convincingly to all stakeholders.
2. Form a Powerful Coalition
Involve influential leaders from various areas such as IT, management, and departments in a coalition. This group should drive the transformation and serve as role models.
3. Develop a Vision and Strategy for Digital Transformation
Create an inspiring vision for the modernized digital landscape and its benefits. Establish a clear strategy with concrete steps, milestones, and responsibilities.
4. Communicate the Vision and Strategy Continuously
Communicate the vision and strategy for digital transformation regularly and through various channels to all employees. Explain the necessity and benefits to foster understanding and acceptance.
5. Remove Obstacles and Overcome Resistance
Identify and eliminate obstacles such as outdated systems, rigid processes, or employee resistance. Provide the necessary resources and training to enable change.
6. Generate Short-Term Wins
Define short-term, achievable goals and make successes visible. This creates motivation and shows that the transformation is making progress.
7. Build on Success and Deepen the Change
Build on success and drive further modernization steps. Consolidate changes and continuously deepen the transformation.
8. Anchor New Digital Processes into the Corporate Culture
Integrate new digital processes, methods, and technologies into the corporate culture through training, adapting incentive systems, and continuous communication of the new digital orientation.
By applying these eight steps to digital transformation, companies can approach change, foster acceptance, and achieve successful modernization of the digital landscape.
The Role of an Interim CIO in Digital Transformation
Unexpected challenges can arise at any stage of the digital transformation process, slowing momentum. Even experienced leaders are not immune to misjudgments, often due to a lack of experience in comprehensive digital landscape overhauls. Initially, Axel Springer, for example, attempted digital initiatives that were perhaps too one-dimensional and did not achieve the desired success. Attempts to monetize online newspapers did not yield the expected revenues. Only a strategy adjustment, including acquiring digital firms, provided the key impetus for the successful transformation.
In this context, an experienced Interim Head of IT can play a decisive role in guiding the transformation process. Their extensive expertise and broad knowledge base provides the flexibility and adaptability needed to respond to emerging challenges and initiate necessary actions.
Extensive Expertise, New Perspectives, and Rapid Implementation
The Interim CDO's broader perspective and innovative yet proven approaches enable faster and more efficient implementation of necessary changes.
An Interim IT Manager often brings a broad network and valuable external resources, further accelerating the transformation process. Speed is critical in digital business models. Additionally, their independence from existing corporate structures allows them to act objectively and impartially, making them more effective than an internal candidate in identifying and solving problems.
Seamless Integration of the New Digital Landscape in the Company
Interim CIOs work closely with the existing team to ensure the new digital landscape is seamlessly integrated into the corporate culture. This includes employee training, implementing incentive systems, and continuous communication of the new digital direction. Through this holistic approach, an Interim CIO ensures that the transformation is anchored not only technologically but also culturally.
By leveraging the expertise and experience of an Interim CDIO, companies can drive transformation purposefully and fully exploit the benefits of a modern, flexible, and secure digital infrastructure. This not only enhances the company's competitiveness but also ensures that the overall business model remains future-proof in today's fast-paced digital world.
In our community, we have IT interim managers with extensive expertise. If you are interested in learning more about this exciting topic or have specific needs, schedule a consultation appointment today.
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