Successful Transformation in a VUCA World

Anyone who looks back wistfully and wishes everything was the way it used to be is unsuitable as a leader.

When we fill leadership positions today, it is often in connection with digital transformation. The candidates we are looking for are expected to initiate and support this change process and make it a success - al this at a time when it is impossible to plan for the long term over several years.

The challenges in terms of agility, people management and customer centricity are different than they were 3-5 years ago and require new skills. Most importantly, resilience is needed in this VUCA world. It takes a certain robustness to resist the disruptions that are currently affecting you, to still work in a planned and goal-oriented manner, and also to calmly lead employees through these turbulent times.

You can only be successful if you are prepared to adapt (quickly) to changing conditions – in other words, to learn new things and develop further.

Those who are stuck in the past, looking back wistfully and wishing everything were the way it used to be, don't stand a chance. On the other hand, those who embrace new things and venture into unfamiliar territory can help shape the future.

Of course, digital and technological skills are also necessary in an increasingly digitalized world. These include the ability to successfully use digital working and management methods and a fundamental understanding of digital business models and processes.

In the future, it will be even more important to transform data into insights and make them useful for companies.

In our day-to-day executive search work, we see that people who have a great openness to new things are much faster at building and expanding this expertise. We need people like this in the executive ranks.

Success factor: lifelong learning

Leadership today involves conveying to employees (ideally, of course, by example) that it is their responsibility to continue to develop and that learning on the job is part of the job.

Success factor: private balance

Increasing agility in the market, shortened product life cycles, the onset of recession... – the demands on managers and the associated pressure to adapt one's own management and working methods accordingly are high. In addition, the home office job is ubiquitous. Private balance is more important than ever. Whether in sports, by spending time with the family, in silence/meditation, etc. – everyone needs a place to wind down and recharge their batteries.

Success factor: be inspired by change

You can be paralyzed by change or inspired by it. We need more people to choose the second option. People who make all the nebulous things in this VUCA world tangible and thus make decisions possible. People who develop a vision of how goals can be achieved  - despite all adversities.

We spoke with some of our researchers who are vital to the success of each and every Search process we undertake at Friisberg.

Here’s a few insights from Delyan Grozdev, Veronika Mohacsi, Raik-Eric Theil and Sina Nowack about the invaluable role they and all our researchers play.

What does a day in the life of a Researcher look like?

It is varied! Being a researcher is undoubtedly a wide-ranging role involving lots of communication (with the team and our candidates), timely emails, telephone interviews and compilation of project briefs leading to systematic search, collection of business news and knowledge sharing (in person and with web platforms), thorough industry research and of course database maintenance.

What is your typical approach to finding candidates for a specific role?

At the outset we discuss with the consultant the best approach in terms of any possible sources or candidates on which to focus. If the role is one we do regularly in a given industry, then we get rolling pretty fast. In other cases though, the first thing to do may be to talk to a source well-positioned in the given field to get a better understanding. Vera says, “Naturally, we examine our earlier projects for similar roles, draw on our database and do Boolean search. I am old school in that I strongly believe in great candidates recommending great candidates.”

Raik-Eric agrees, “I work with Boolean strings in Linkedin and Xing and systematic cover letters. I talk to key people from the sector and ask them and contacts for recommendations.”

With an ever-increasing online presence, Executive Search is changing. How do you see your role developing in the future?

Delyan believes that the future is already here with automated tools like LinkedIn and Google Alerts being a good way to stay up to date with people and companies. “Technical skills for working with CRM/database tools and web search tricks are essential, but it is still a knowledge-based job so it remains crucial that we are deeply interested in how businesses and people work, to be able to target our searches well, using all the technology at hand. Data management is an increasingly time consuming issue both in terms of volume and knowing what’s what - don't talk to me about GDPR!”

The modern researcher, agrees Raik-Eric, must understand how to collect the right data, process it and translate it into appropriate action in order to continuously improve. “In the digital world, work is becoming more data-driven and scalable. We must therefore be able to move confidently in the relevant systems and on the relevant platforms.”

Sina reiterates however that is vital researchers do not lose professionalism in the way candidates are contacted, “It is becoming more and more important to address candidates in the right way and to network in a discreet way.”

What do you enjoy most about your role?

All agree that it is a privilege to interact with many differing personalities from a range of industries on a variety of issues. Acquiring knowledge is a vital part of the role – from business through to science - as well as understanding how businesses work and how the economy evolves.

In terms of international collaboration, Sina added, “Networking across national borders is very important for our clients and thus for me as a Researcher.”

How has the changes and new demands on industry affected the search process?

With so much information readily available and the pace of change in the world today, clients expect results faster. To stay competitive we need to balance speed with quality search methodology. In general, the demands on services are constantly increasing. In the course of customer centricity, our clients and candidates also expect our process to be targeted, transparent and fast.

Whenever the new normal arrives, and it will come in 2021, there will be a rush for talent. What action are you seeing companies taking at the moment?

Vera sums it up, “ In my experience, companies have recruitment needs now same as ever, I don’t see them holding back on a rush for talent later. Most of our clients are simply rethinking the way they work in the new normal.” Reflecting on the anomalous 2020, she added, “We’ve been conducting projects with virtual interviews  and while it doesn’t offer the same experience as live interviews, it seems to be working pretty well. Considering how much time and energy can be saved (both from our side and candidates’ as well), virtual interviews may be with us for good. Our roles could involve zero face to face interaction with candidates - but I hope not!”

Veronika Mohacsi, Hungary
Raik-Eric Theil, Germany

Delyan Grozdev, Bulgaria
Sina Nowack, Germany

The Digital Revolution:

Many companies are in a process of epochal change.

The Italian Experience...

Digital transformation is now a strategic priority for companies in all sectors and the past year, due to the pandemic, has highlighted even more gaps in larger companies.

Digital technologies are present in our daily lives and are also forcing companies to change - it is no longer possible to procrastinate.

The increasingly widespread adoption of the Cloud, the introduction of the IoT (Internet of Thing), the need to give value to the enormous amount of data, are causing to all industries to undergo a radical change in processes, in their ways of working and in the corporate culture itself.

Research conducted by Accenture The European Double Up: A twin Strategy that will Strengthen Competitiveness of 4,051 executives of European companies was presented at the annual meeting of the World Economic Forum last January. It underlined that for European companies to return to levels of profitability before the pandemic would take 18 months and only 32% of companies expect to realize an increase in profits in the next 12 months. These latter realities, defined as "the leading companies of tomorrow", will focus on the adoption of digital, together with the implementation of sustainability actions. The study shows that around half (45%) of European companies are prioritizing investments in both digital transformation and sustainability, with 40% of companies planning to make large investments in the field of artificial intelligence, 37 % in the cloud and 31% in sustainability.

In Italy, a survey made by the European Investment Bank, still highlights a low focus of Italian companies on innovation with just 17% having concentrated investments in innovation relating to the introduction of software and digital technologies. Proof of the benefits of digitization is the analysis of the productivity level which shows that digitized companies perform better and are more dynamic than non-digitized ones. The EIBIS survey shows the average productivity of digital companies in Italy is 12.3 %, more than 11.7% of non-digitized companies. Furthermore, in the last three years, companies that have undertaken innovations in the digital field have had a growth trend of the workforce higher than that of companies that have not implemented digital technologies. There is no doubt, in fact, that digital transformation requires a profound cultural change and the acquisition of new skills and profiles, which often come from the digital world.

The technologies that drive this transformation are many, such as:

Production and logistics managers as well as network managers will need to acquire more and more new skills in this area to be able to lead the change.

Guglielmo Sallustio
Partner, Italy

What does a digital leader do in the 21st century?

An interview with Antti Kleemola, CDO at the Finnish Rail Company, VR Group.

Digitalization has transformed the business world, depending on your point of view, for at least the last couple of decades. The change has been immense, not only in terms of processes and systems, but also in terms of the need for new competencies and working cultures.

Major changes require skilful management and many companies have reacted to digitalization by hiring a CDO to manage this change.

Is there still something left to be done in this digital transformation and is an appointed Digital Director required to successfully manage it?

We interviewed Antti Kleemola, CDO at VR Group, a government-owned railway company in Finland, operating in public transport services in both long-distance and commuter traffic, as well as in logistics and maintenance, about this topic.

From measuring kilometres to assessing customer satisfaction: digitalization means to VR above all a change in their thinking culture

VR is a textbook example of a giant organization where the need for a CDO was determined through experience. The changing business environment and with it the new measures of success drove the traditional logistics group, which has long had a monopoly over rail transport, to reflect on its capability in change management. Kleemola explained:

“Strangely enough, the focus of VR earlier was on the train instead of on the customer. For example, not that long ago our performance indicators focused mainly on kilometres driven.

“Due to both digitalization and the fact that competition for passenger rail transport will increase in the coming decade, our focus has shifted more than before from our fleet towards our passengers. Nowadays we focus on both the number of customers and customer satisfaction when measuring our success.

“Changes are happening on many fronts, which is why we need the entire organization to coordinate as to how to prioritize accordingly”.

The CDO is always busy – the need for change management due to digitalization shows no signs of slowing down

Kleemola's journey zigzagged, with the help of headhunters, through various leadership positions in the information administration to the digital executive of VR. Originally, he joined the organization to set the passenger transport sector in order, from the perspective of digitalizing the customer value chain. One of his first tasks was to make purchasing tickets easier, with the help of information technology.

“Quite soon it was noticed that it would make sense for the whole organization to think about how our business can better benefit from technology. It was desired that insights gained from the digitalization of passenger transport be applied to the entire organization. In this light, the need for a CDO was also identified,” Kleemola says.

“In a big organization like VR, reacting to changes isn’t always that simple. When both technology-driven reforms and demands for change from the authorities have an ongoing impact, it takes a strong digital leader to successfully hold everything together”..

The responsibility for digital change doesn’t lie solely on the CDO’s shoulders.

Whose responsibility it is to implement change in organizations, especially at giants like VR? Should it be only among CDOs, or possibly include someone else?

“To allow true change to happen, someone proactive and able to invest enough time and effort is needed. I doubt that a CDO alone has the power to do this. People in the organization are the key, and both employees and executives have a lot to take on when it comes to digitalization.

A viable partnership with business leaders is also of the utmost importance for a digital leader. This means digitalization throughout the entire organization’s agenda, not just in that of the CDO and his inner circle.

"The partnership and networking with both internal and external stakeholders need to be in good shape to succeed in times of digital transformation. Not even we at VR have all the answers; we need partners across industries,” Kleemola explains.

If the organization were an electric locomotive, information technology would be its fuel.

A successful digital leader turns his attention not only to making business more efficient through technology, but also to how such changes affect the overall customer experience.

“The goal of all our activities is ultimately to ensure that our customers are satisfied and have access to our services as easily as possible, be they train passengers or industrial customers who need an unbroken flow of goods. Therefore, we actively collect our customers’ insights and experiences and use them to draw useful conclusions about any developmental needs.

I believe that excellent customer experience still requires, in terms of digitalization, making organizations more collaborative and sharing common service platforms for the benefit of the consumer. There is still plenty of work to do in building these ecosystems for us digital leaders”, Kleemola states.

From IT's perspective, one of the biggest transformations has undoubtedly occurred in the area of cloud transformation. As data has moved from organizations' own servers to the cloud, its overall meaning has also fundamentally changed.

“With cloud transformation, information technology, as I see it, is becoming more of a “basic electricity”, so to say, that sustains operations. This “electricity” can then be recharged from the charging station if necessary, to allow the journey to continue.

As it stands, technology itself no longer requires that much management; the perspective has changed even more to people and change management. I believe that this will become even more pronounced in the job description of the CDO in the future,” Kleemola concluded.

Who knows, maybe the digital director of the future will be the title of CTO — Chief Transformation Officer.

Mika Rossi
Partner, Finland

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