As we navigate the ever-evolving landscape of digital transformation, it’s crucial to recognize the vital role of entrepreneurs in steering this change. Their unique blend of vision, innovation, and adaptability is not just an asset but a necessity for businesses seeking to thrive in a digitally transformed world.
This is an exclusive article series conducted by the Editor Team of CIO News with Eslam Taha, Digital Transformation Expert | CTO from the Aviation Industry.
Digital transformation is the adoption and integration of digital technologies across all business areas, resulting in fundamental changes that reshape how businesses operate and deliver value to customers. Digital transformation has become critical for companies seeking to remain competitive in today’s fast-paced and technology-driven business environment.
In this context, entrepreneurship is essential to digital transformation. Entrepreneurs, with their innate ability to identify gaps, innovate, and adapt, are the catalysts for digital waves in traditional business waters. Entrepreneurs are often at the forefront of digital innovation, pushing the boundaries of what is possible and disrupting traditional business models. By embracing entrepreneurship, companies can stay ahead of the curve and remain competitive in an increasingly digital economy.
The entrepreneurship field still needs to be mature enough, especially since no formally defined body of knowledge exists. So, there are many overlapping definitions from different business and social sources.
Harvard Business School defines entrepreneurship as “the pursuit of opportunity beyond resources currently controlled.”
This definition highlights the importance of identifying and pursuing opportunities beyond the resources one currently possesses. This definition suggests that entrepreneurship involves a mindset focused on identifying market gaps and developing creative solutions to fill them. Successful entrepreneurs can leverage their creativity, ingenuity, and resourcefulness to overcome obstacles and turn opportunities into profitable ventures. This definition also highlights the importance of risk-taking in entrepreneurship, as pursuing opportunities beyond one’s current resources often involves taking calculated risks in the face of uncertainty.
Stokes and Wilson (2010) express entrepreneurship based on three dimensions:
(1) Entrepreneurship as behaviors required by entrepreneurs
This dimension focuses on individuals, behaviors, and engagement in the process of entrepreneurship.
“Entrepreneurship, as a field of study, seeks to understand how opportunities to create something new (e.g., new products or services, new markets, new production processes or raw materials, new ways of organizing existing technologies) arise and are discovered or are created by specific persons, who then use various means to exploit or develop them, thus producing a wide range of effects.” (Baron and Shane 2008, 5). In 2003, the Northern Ireland government’s Entrepreneurship and Education Action Plan defined entrepreneurship as:
“The ability of an individual, possessing a range of essential skills and attributes, to make a unique, innovative, and creative contribution in the world of work, whether in employment or self-employment.”
It is widely acknowledged, as per the available information, that entrepreneurs’ personal traits should include the following:
- Confidence • Creativity • Energy
- Initiative • Determination • Resilience
- Risk-taker • Dynamic • Flexible
- Growth-oriented • Intelligence • Emotional Stability
(2) Entrepreneurship as processes undertaken by entrepreneurs
This dimension centers around developing new products, services, or innovative ideas and then preparing business plans. So, the dimension focuses on the structural process carried out by the entrepreneur, including identifying and evaluating opportunities, developing and testing ideas, preparing business plans, and securing resources such as funding and talent.
Entrepreneurship is the “process of creating something new of value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence.” (Hisrich and Peters, 2002)
Entrepreneurship as a process involves the ability to identify and seize opportunities, which often involves taking risks, assuming financial and social costs, and being persistent in pursuing goals. Entrepreneurs need to be innovative, resourceful, and adaptive, constantly seeking new ways to create value and meet customer needs.
Entrepreneurship as a process also involves developing a business plan that outlines the objectives, strategies, and tactics for achieving success. This includes identifying the target market, developing a value proposition, creating a marketing plan, and securing resources such as funding and talent.
(3) Entrepreneurship as Outcomes
This dimension focuses on the outcomes of entrepreneurship and entrepreneurial activity, such as new products, services, innovation, and value creation for the economy and society.
Entrepreneurs are innovators, opportunists, and thinkers who not only perceive new combinations and opportunities but also pursue them into reality. This combination of ideas and implementation is effectively the role of the entrepreneur, who essentially recognizes and pursues opportunity, which in turn is the heart of entrepreneurship.
An old story about a shoe manufacturer who, many years ago, sent two of his marketing graduates to the interior of Australia to see if they could come up with new product ideas for the undeveloped Aborigine market
- The first one responded, “There’s no business here; the natives don’t wear shoes of any type!”.
- The second one was more enthusiastic about the prospects: “This is a great opportunity; the natives haven’t even discovered shoes yet!”.
There is a debate surrounding entrepreneurship—whether an entrepreneur is born or can be created. People have different perceptions and reactions toward opportunities. Entrepreneurs are visionaries and can easily see opportunities before anyone else. The available literature acknowledges that entrepreneurial education plays a key role in assisting the development of entrepreneurs. Many internet studies show how entrepreneurial education has affected students’ attitudes and motivations toward entrepreneurship.
Digital Transformation in Today’s World
- Digital transformation looks different for every company, so it’s hard to unify the digital transformation definition for all; however, in general, the term is the process of using technology as an enabler to change the way you operate and deliver value to the customer to meet the rapid changes and customer expectations in response to the digital disruption. The change might cover the people, the business processes, and the culture. The accessibility of digital technologies and the recent COVID-19 situation have accelerated digital transformation initiatives among organizations. Digital transformation should start with a problem, an opportunity, or a goal. The digital transformation’s main objective might be improving the customer experience and enhancing the efficiency of the operation, which positively affects productivity or increases revenue. Digital transformation enablers vary from one company to another and from industry to industry; however, some common enablers can be applied among enterprises:
Figure 1. Key enablers for digital transformation
Source (Lokuge & Duan Enabler of Digital Transformation in SMEs)
- Supportive organizational culture: This is a critical factor in the success of digital transformation, yet it needs to be considered more in many organizational change initiatives. While it may be represented as a lower-level factor in the diagram, its impact on the success of digital transformation should be considered. Creating a supportive organizational culture is vital to overcoming the challenges associated with changing people’s behavior and getting them to accept and embrace new ways of working. Resistance to change is a natural human reaction, and digital transformation often requires significant changes in work processes, skills, and attitudes. Therefore, fostering a culture that supports and encourages innovation, experimentation, and continuous learning is crucial. This culture should promote open communication, transparency, and collaboration, creating a sense of ownership and accountability for the change process. By creating a supportive organizational culture, organizations can facilitate the adoption of digital technologies, enhance employee engagement and productivity, and achieve the desired outcomes of digital transformation.
- Sustainable Technology Capabilities: A successful digital transformation implementation requires proper utilization of IT capabilities. It is important to manage the IT staff and skills and develop the competencies needed during the journey. Also, emerging technology like big data, cloud computing, AI, IoT, cybersecurity, VR, etc. is a significant enabler of digital transformation that helps businesses harness the power of information technology to improve performance and drive productivity.
- Flexible Organizational Controls: Organizations with flexible hierarchies and top management with a clear vision and good intervention are good enablers for digital transformation. Also, organizational coordination, awareness, and communication are essential for the success of digital transformation initiatives.
- Skilled People: When we talk about skilled people, we are talking only about the IT staff; however, we are talking about the whole organization’s staff as an enabler in digital transformation. The skills, including knowledge, expertise, leadership, empowerment, etc., are essential during the journey. As we also need to build high technical skills, we also need managerial staff capable of renewing their innovation cognition and developing managerial social skills to support such initiatives strongly.
- Agile Business Processes: The processes are critical to the success of digital transformation initiatives. As digital transformation introduces new business processes that differ from the current ones, it is essential to adopt an agile approach to ensure that they create new value or enhance existing value while maintaining the organization’s identity. Agility in business processes is crucial to supporting the organization’s ability to seize opportunities and gain a competitive advantage. Opportunities that meet specific criteria can create value and allow a company to produce products and services that are better or cheaper than those of its rivals.
Although this article does not focus on opportunities per se, opportunities must have four characteristics to be considered: attractive, durable, timely, and anchored in a product, service, or business that creates value for the end user.
Conclusion
In the realm of digital transformation, the entrepreneurial spirit is the secret sauce. Entrepreneurs, with their unique blend of vision, innovation, and resilience, do not just participate in the digital revolution; they lead it. They are the architects who bridge the gap between traditional business models and the digital future, redefining the landscape of global business.
The debate might still persist: Are entrepreneurs born with these abilities, or are they shaped by their experiences? While opinions may vary, one aspect remains clear in the context of the digital era: the invaluable role of entrepreneurs. Their influence extends beyond business success; it fosters continuous innovation and adaptation.
Entrepreneurship, particularly in the digital domain, is not just about creating new ventures. It’s about a mindset that challenges the status quo, embraces risk, and relentlessly pursues innovation. Entrepreneurs are the catalysts who convert challenges into opportunities and ideas into reality. They are not just participants in the digital transformation journey; they are its leaders.
Also read: Navigating the Cybersecurity Labyrinth: A Strategic Blueprint for CIOs
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