As the Filene Research Institute prepared to launch our newest Center of Excellence, Design for Digital, we were lucky enough to interview some of the foremost leaders in digital organization and digital transformation research. Over a three-month process, fellow candidates were asked to consider several areas that Filene had identified as critical to credit unions, such as member-first digital strategies, digital talent and culture, and tech innovations. They shared their relevant past and planned research, as well as their perspective on how their expertise could bring meaningful advancement to the credit union industry.
In partnership with the Design for Digital sponsors, we are excited to announce that we selected Dr. Gerald Kane from the University of Georgia as our fellow. Dr. Kane is the Department Head and C. Herman and Mary Virginia Terry Chair of Business Administration and Professor in the University of Georgia’s Department of Management Information Systems. Much of his work has centered around how legacy organizations successfully undergo digital transformations, including a multi-year partnership with Deloitte and MIT Sloan Management.
We are very much looking forward to the perspective and impact Dr. Kane will bring to the credit union industry, but we also wanted to be sure to share some of the insights we learned throughout the search from the other very accomplished candidates. We are thankful for their time and effort throughout the search process, and we hope to find ways to incorporate their expertise as the center moves forward. In the meantime, here’s what the top researchers in digital are thinking about.
Digital transformation, and its success, is ultimately about people.
When most people think of digital transformation, they tend to think in terms of game-changing platforms that will radically alter how they do business. But the reality is that digital transformations are much more about people and the change management around them than the new technologies coming online within an organization.
In fact, many business leaders feel the vast majority of their digital transformation initiatives fail because of a disconnect somewhere between the people and the technology. Across industries and organizations, you’ll spot spending – sometimes massive spending – on digital products promising transformative benefits only to find employees and customers don’t use them. New tools can become a barrier to work if they don’t actually help right out of the box. Before even taking the tools out of the box, the people who will have to use them should understand why new tools are being introduced, what they will do to improve operations.
As such, the most successful organizations follow a human-centered approach, offering employees the opportunity for meaningful input throughout the selection and implementation of new digital products and cultivating a digital mindset. As a new tool is being implemented, credit unions should take note of employees who, regardless of their title and level, have influence with their coworkers. People weigh the opinions of their peers and connections differently. Using organizational (social) network analysis, you can find and train the best people to support their colleagues and the credit union’s digital transformation goals.
Digital requires new leadership styles and new leadership skills.
Most companies start off digital transformations with a top-down, management driven approach, but those that are most successful evolve to a space where the culture drives adoption based on leadership and a plan that employees can believe in. Wherever on their journey, most organizations recognize a need for new digital leadership to properly look to the future of digital transformation, focusing on those who are change oriented, have a forward-looking vision, and have some substantial understanding of technology.
The shift in vision and skills isn’t only with leaders; employees throughout the organization will need to adapt to the change. There are a variety of human-level hurdles to organizations’ digital transformation, including:
- Organizational fear of experimentation
- Knowledge guardians, used to being relied upon for expertise and afraid of "losing power," souring the culture
- Executive leadership with sunk-cost feelings, afraid of abandoning nonoptimal solutions
For personnel hurdles, like overcoming reluctance around new tools and operational changes, it’s up to top-level management to drive a cultural change that frames digital transformation as a positive. Effective positive reinforcement can be as simple as vocal support or even involve organizational rewards for adopting a transformation mindset. However it is realized, the approach should embody the organization’s clear, unified digital transformation strategy.
Data is an extremely value asset and digital tools ultimately change how, and how well, people are able to interact with that asset.
At its core, digital transformation is about restructuring the relationship between people and data via the digital tools at hand. As organizations become more digital, the amount of data and the accessibility of that data ideally grow in tandem. What researchers see more often, however, is the proliferation of data across increasingly siloed systems and teams.
Technology should be viewed through the lens of how it can enable employees to do their jobs better; in other words, allow them to more easily access the data that they need. Successful companies also look at how innovations in data can improve their institutional nimbleness, scalability, stability, and optionality. Organizations across industries are using technology and data together to innovate within their operations and customer offerings and disrupt their respective spaces.
Digital changes the structure of individual roles and organizations overall.
As organizations become more digital, many traditional roles and ways of working will be disrupted. For example, roles that were heavily based around processing large volumes of information are likely being changed by digital tools that are significantly faster and more accurate than a person at rote tasks. Employees in affected roles will have to take on higher level strategy tasks that cannot be automated or be re-skilled for a new position.
Credit unions should be prepared for this shift if they aren’t already undergoing it. The good news is that research has shown that companies who foster continuous learning and innovation tend to outperform their rivals who don’t.
Individual roles aren’t the only things being disrupted, though. Leading organizations have a developed core of more standardized processes and shareable data that connect traditionally siloed areas of the business. The picture of integration, and organizational structure, within these companies is much less convoluted than we’re used to seeing among those that have bolted on integration after integration as they go. Credit unions will need to begin to think less about traditional departments and organizational structures, and more about how to organize to deliver better, more efficient services.
Organizational mindsets and culture impact digital transformation success.
Carol Dweck’s “fixed” and “growth” mindsets don’t just predict individual performance – research into digital maturity shows that the organization mindset predicts how successful companies’ digital transformations will be.
Along with a growth mindset, successful organizations tend to see experimentation as an opportunity worth taking as opposed to a risk or hassle. With the technological inflection point we’re at, experimentation is the best way to find the right solution, and it’s important for organizations to open to and interested in frequently testing new methods and tools.
Trust is paramount in digital interactions.
The shift to digital fundamentally changes the way that organizations function internally and externally. With fewer face-to-face interactions, trust needs to be gained and maintained through different means than it has been before. Consumers trust organizations more if they perceive them as having more social capital. Input from a trusted family member or friend could lead to more social capital in the same way that a good interaction with an organization could.
How do you build trust with new members in a digital world? Research shows that unfamiliarity is only temporary, and so social capital can be developed. With that being the case, trust in a relative stranger on an unfamiliar platform can reach levels of close friends and family. It’s through continued interaction with an organization, service, or platform that an individual solidifies trust in a new relationship, whether a service or digital tool.
One caveat to keep in mind as interactions become more digital: ensure you have proper protocols in place to maintain that trust. The tools of digital transformation driving credit union business and membership into the future, like GenAI, for example, are groundbreaking because they can interpret and manipulate data faster than we can on our own. They are also capable of making mistakes or proliferating errors. It’s vital to keep a tight collaboration between the technology and the customer-facing teams to ensure that your innovation stays true to its intent. Regulatory and liability implications abound among new technologies, especially AI tools that can provide advice or make eligibility decisions, en masse.
What can you expect from Design for Digital over the next few months?
We are currently in the process of forming the research agenda for the center, which will form the structure through which we carry out our research. All Filene members will have a couple of opportunities to hear directly from our fellow, Dr. Gerald Kane, in the first half of 2025, including on a soon-to-be-announced webinar in February and at EDGE in May. We expect Filene members will start seeing research from the center around the middle of this year. We look forward to your input and participation in this research!
