Reshma Ramachandran is an award-winning chief transformation officer with a successful track record in different geographies and sectors ranging from power, energy and oil & gas to manufacturing and consumer goods. She currently serves as a senior advisor with BCG and as a non-executive director at Danish facilities management company ISS A/s, one of Europe’s largest employers. Ramachandran previously led transformations at L&T, an Indian multinational conglomerate, GE, ABB and the Adecco Group. She is an engineer and alumni of India Institute of Technology, Madras with an MBA from the SP Jain Institute of Management and Research and has completed global leadership programs at IMD and Harvard Business School. She has won numerous awards for leading digital transformations during the last decade. She actively champions for more women in STEM and leadership roles and serves as an advisor with World Woman Foundation and the Swiss CxO forum. Ramachandran, who has lived in 13 countries across three continents, currently resides in Switzerland. She recently spoke to The Innovator about how to create value through digital transformation.
Q: Why don’t more companies succeed at creating new revenue streams or new business models that move the needle?
RR: Digital transformation is not about owning or rolling out technology. It is about using the technology to create value for the business and for the different stakeholders. This is where most organizations fail. It you look at the past decade the statistics have not changed: 70% of transformations do not deliver the value originally intended. That is a nice way of saying that 70% fail. Why do they fail? When it comes to digital transformation all the organizations want to do the easy thing which is buy and roll out the technology. At the moment everyone wants to buy [Microsoft’s] Copilot or Salesforce’s Agentforce but forget that technology is only an enabler. Most organizations are struggling a lot due to FOMO [fear of missing out]. They are worried that if they don’t jump on the latest technology bandwagon the perception will be that they are not creating value. But to create new revenue streams and create more value, organizations have to spend more time understanding customer needs and then use technology to address the needs.
Q: What, in your view, are the keys to success?
RR: According to an IMD study organization that succeed in digital transformation are the ones that take a very slow and steady approach, focus on fundamental issues in the organization and use technology to enable problem solving. Organizations I worked with were successful by looking at where they wanted to play and how to win. This allowed them to develop three-year and five-year roadmaps that would allow them to add incremental revenue. They never completely pivoted. Complete pivots at large organizations are rare and take time. For most companies it is about defining where to play and how to win and using data and technology to enable that. My personal advice is don’t try to solve a lot for the future. Try to fix the present, then use both internal and external data to extrapolate the future. Only then can you start solving for the future, otherwise you will be placing a roof on a shaky foundation.
Q: You have worked in a lot of geographies. Is there a difference in the way companies approach digital transformation?
RR: There is a stark difference. Take the three geographies that I am most familiar with – India, the U.S. and Europe. In India it is not about risk taking but really about the necessity. Necessity is driving technology adoption and they are leapfrogging ahead. The U.S. is very capitalistic and has a high-risk reward ratio. In Europe is there is no real necessity and no real capitalism. People are risk averse, they don’t like change and the way their policies are shaped to protect the legacy kills innovation. Change driven by technology is accelerating at an unprecedented rate. The average shelf life of the companies used to be 18 years; with technological disruptions its coming down to less than a decade. That means that unless organizations, like Europe’slargest auto manufacturers, innovate, they may not exist 10 years from now.
Q What key changes do companies need to make?
RR: Attract new thinking into the organization by making changes to your messaging, policies and recruitment processes and upskill and reskill.
Organizations need to make a conscious effort to have diversity in their culture if they are going to be able to think outside the box. So how do you make legacy organizations more attractive to new talent than they are now? You can’t change a structure that has existed for 100 years from Friday to Monday, but you can give a message to new talent that communicates that ‘we are changing.” To attract talent, you need to give more thought to not just what you have built but what you want to leave behind and how you communicate that.
The good side of social media is the cost to communicate is free. Again another positive impact of technology. The tone and the message really needs to be set at the top, aka, the CEO. Social media like LinkedIn can then be leveraged to clearly and continually communicate both inside and outside the organization.
If you want to attract fresh talent than you also need to look at your processes. I recently spoke to a group in the UK – they were all under 22 years old – and I asked them how they would select their next employer. One Gen Zer told me that a company that had reached out to her had a clause that banned social media usage. That was a no go. ‘All of us are on Instagram,’ she said. ‘I’m an influencer and I’m not going to give that up.’ A policy of banning social media is old school. The time when people had their identity tied to the job and devoted 100% of their life to an organization is over. Social media makes it possible to showcase our other talents. It is a simple thing but allowing people to express themselves and who they are can bring in different talent.
Communications around the hiring process is also key. While working with ABB we changed the gender of a job advertisement for engineers from male only to a version of word that included women (the German language has the masculine and feminine versions). This change resulted in a surge in applications by women engineers. It is a small but tangible example of how changes to process can make a difference in hiring, retention, and promotion processes.
Behavior is also something that is measurable. When the CEO sits in on meetings does he encourage bringing in different points of view or immediately shut people down? There are so many seemingly small things that encourage inclusion and create a sense of belonging for all demographics. The complex problems organizations face today can only be solved with different perspectives.
It is also important to paint a rosy, rather than a gloomy picture, especially around technology adoption. I graduated in 2001 and the year before there was the Y2K issue [a problem in the coding of computerized systems that was projected to create havoc in computers and computer networks around the world at the beginning of the year 2000] As a young person about to graduate I was scared. I worried that the job I was studying for wouldn’t exist. Those fears proved unfounded. Fast forward 24 years and now we are faced with AI replacing jobs. I agree with [Amazon founder] Jeff Bezos. It is important to focus on what will not change with AI: the need for the human skills of creativity and collaboration. These attributes will drive the jobs of the future. In my generation we focused on university degrees or pedigrees. Today it is about adaptability. The ones that will survive are the ones that can adapt and continuously learn new skills.
The concept of human resources comes from the industrial era. Today companies are instead progressing to chief people officers. I think that is the right terminology. The whole concept of humans as a resource needs to change. Today it is more about how to unleash potential creativity and futuristic thinking. Figure out how to create processes adapted to the times that we live in and create a sense of belonging. Humans are social animals. That will not change. People need to feel proud of who they work for and have a sense of belonging and being valued.
Q: What do you want to be the key takeaways from this interview?
RR: Tech is an enabler. Do not look at technology in isolation. Articulate your problems. The more clarity on the problems you want to solve, the more technology will help in solving those. Look at what will not change and focus on what technology can’t take away from us. Ultimately we are going back to Charles Darwin´s theory of evolution: the winners will not necessarily be the strongest or the fastest but those who are most adaptable.
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