ONLY THE LONELY; THE CEO DILEMMA

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Lonely at the top? How can CEOs get the support they need to grow their businesses?

Lonely in boardroom

The secrets of great leadership are wide-ranging and well-documented – but some of the most successful leaders of the modern generation all claim to do one simple thing: they work out. That’s right, plain old-fashioned exercise is regarded as a key factor in the accomplishments of some of the world’s most prominent entrepreneurs, with many citing the correlation between physical fitness and mental sharpness as the science behind their success. Now I’m not going to argue with Messrs Branson, Zuckerburg and Dorsey – in fact my continuing endeavours as an amateur triathlete suggest we share similar beliefs if not a similar bank balance. But my own analysis of successful leaders – and in particular the characteristics of effective CEOs – suggests a variation on the theme. Strong leadership may well be contingent on working out, but it’s also dependent on working together.

We all know the expression ‘it’s lonely at the top’. It’s a cliché, but it’s true. There are high profile examples all around us, with two of the most recognisable once again underlining parallels between business and sport that I’ve previously discussed in this forum. Undeniably, the principles of great leadership transcend all professions.

Few leaders have looked lonelier in recent months than Theresa May in the wake of her General Election debacle and Arsene Wenger following three consecutive 5-1 defeats to Bayern Munich in the Champions League. (Clearly, in both cases, presiding over a European exit can be a tortuous experience). Yet their apparent loneliness is arguably self-inflicted. Critics claim that the authoritarian and insular nature of both May and Wenger’s leadership styles, along with their reluctance to seek input and perspective from others, is at the root of their travails. They’ve found out the hard way that a more collegiate approach – and in Arsenal’s case, perhaps a defensive coach – is the secret to sustainable success. The same is undoubtedly the case at the top of the Boardroom.

Loneliness is a familiar feeling for many CEOs. It’s perhaps not surprising; business leaders are under enormous pressure to create value, drive growth and deliver results for both internal and external stakeholders. These are huge responsibilities and it’s easy to understand why many believe they shoulder the burden on their own. The reality is, they don’t. Or at least they don’t have to, since there are a variety of resources that CEOs can turn to for support. True, CEOs are ultimately accountable for results – good, bad or indifferent – but match-winning performance does not need to be a solo pursuit, it works much better as a team sport.

Helping hands for CEOs

So how can CEOs get the support they need? The options are out there. The past few years has seen significant growth in executive coaching as business leaders look outside for professional guidance and mentoring. Executive coaching can undoubtedly assist personal growth and effectiveness to lead organisational change. But when it comes to shaping strategic decision-making – the core of the CEO remit – it invariably pulls up short.

The most logical strategic resource open to a CEO is the executive leadership team. The executive leadership team offers a rich source of specialist expertise, schooled in the organisational culture and cognisant of its challenges and goals. But the dynamic between the two is still tricky; whereas individual team members typically have a one-dimensional focus, CEOs have a broad agenda and are required to look across everything. As a result, CEOs often feel they need to operate at a level above their executive team, depriving themselves of the opportunity to bounce ideas off senior leaders. This naturally leads to strategic decisions being made in isolation and perpetuates the loneliness of life at the top. 

The value of the Non-Execs

Savvy CEOs see their board as a strategic asset and use it to shape their thinking. Moreover, the most effective maximise the value of their Non-Executive Directors (NEDs). NEDs are often the strategic sounding board that CEOs desperately need but seldom feel comfortable to invite from their peers. Unlike the executive leadership team, NEDs are not caught up in the day-to-day of the business – they’re independent of it – enabling them to offer an impartial view.

NEDs offer a different kind of independence to executive coaches, typically drawing on sector-specific or discipline-specific experience to help ensure that CEOs are asking the right questions and thinking about the right things. Where executive coaches focus on the personal effectiveness of a CEO, NEDs concentrate on the strategic effectiveness of the business – offering objective advice on the definition, direction and delivery of strategy. Where it works best, a NED will provide both a sounding board and a helpful ‘nudge’, nurturing a ‘course correction’ relationship that positively supports a CEO.

The closest NED relationship is invariably between the CEO and the Non-Exec Chair. In the most effective examples, the latter not only has responsibility for board effectiveness, it is also more likely to maintain regular dialogue with a CEO in between board meetings. There’s a strong argument for ‘between meeting’ engagement to be maintained with all board members to ensure that thinking is proactive, holistic and collaborative.

Non-Exec specialists

In recent years, boards have begun to appoint NEDs with specialist domain expertise to address company-specific strategic challenges. A good example of this is in the digital domain where there’s a growing trend towards boards appointing digital NEDs. The development follows 2014 research that showed a high majority of boards lack the digital leadership required to meet the challenges of digital/business transformation. The Russell Reynolds study of all board members in the ‘Global 300’ companies revealed that only 10% of boards could be classified as ‘highly digital’. This indicates a strategic capability gap that clearly needs addressing. Thankfully it seems progress is being made.

The enduring importance of digital leadership – a theme I’ve explored previously – is significant. However, digital is just one area where CEOs can benefit specialist domain expertise from NEDs. Outside of digital, proactive organisations are increasingly deploying Non-Exec specialists with regional, customer or commercial expertise to provide strategic counsel to the leadership team. These specialists are offering invaluable support to CEOs both within, and crucially outside of, formal board meetings.

Advisory Boards

An alternative approach – and one that’s rapidly gaining traction – is the use of specialist Advisory Boards. Advisory Boards offer a totally different kind of resource, comprising paid advisors rather than company employees or NEDs. They typically focus on specific, resonant business challenges and solicit the independent and regular input of experts in the topic. Advisory Boards are useful in that they can help businesses address gaps in knowledge without needing to alter the conventional structure of the board. Crucially, they’re an inexpensive way of bringing significant expertise into a business without the burden of fixed employment costs. The use of Advisory Boards is becoming very popular, particularly in areas such as digital strategy, technology and new/emerging markets. Their value is both significant and demonstrable.

So the message is clear: in today’s ever-competitive and highly pressurised markets, there’s no need for CEOs to find life lonely at the top. Effective leaders adopt a more collegiate approach, leveraging the divergent skillsets of NEDs, Advisory Boards and, of course, their executive leadership teams to shape strategy and drive growth. It’s an approach that makes sense. The most successful leaders recognise it’s far better to lean on others for support than to stand alone until they fall. There’s a lesson in there for Arsene Wenger. It may be too late for Theresa May.

In the final analysis, the advice of Branson and co is eminently sensible. After all, healthy body, healthy mind. But to be truly fit for purpose, perhaps it’s a good idea for CEOs to mix the metaphors: work together and it might just work out.

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WE SHOULD HAVE GROWN FASTER |MINUTEHACK

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INTERVIEW: http://minutehack.com/interviews/we-should-have-grown-faster

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By INTERVIEW TEAM – Aug 10, 2017

Judging how fast to grow is a nice problem to have. For Transform, the time has come to move up a gear, says its chairman.

Bill James, non-executive chairman of digital transformation business Transform, is happy with the company’s steady growth over the last 15 years. But he says now is the time to push harder and to shout about its positive results.

Give us the lowdown on your business

Transform works with companies and government departments to bring digital transformation to life. What that means is that we make sure their investment in digital benefits both the organisation and their customers.

How did it come about?

I joined the business in its infancy. It was created in 2000 when the founder recognised that the internet was massively going to impact every major company and government department and saw an opportunity to create a service that could guide them through the process and to work out best practices.

Plot the growth story to today

Turnover for 2015 was £10m+ and we have over 40 permanent members of staff. However, as an associate based business, the number of staff on our books isn’t reflective of the size of the business.

Due to the fact that we are pretty integral to our clients, we’ve continued to work with many of the clients for a long time. Our strongest legacy is with retail brands, but we have expanded into telecommunications, media and financial services.

We also have a long track record of working with the public sector across a diverse range of government agencies and departments. This included working with Public Health England to develop their One You app, which advises consumers on staying healthy.

How are market conditions right now?

Everyone wants to be in our market. Every week there seems to be a new entrant, whether a one man band, boutique organisation or marketing agency, all saying they do what we do. This is because the space is very vibrant with a huge amount of opportunity.

We sit at the centre of the digital transformation landscape and were one of the pioneers of the sector. Our clients trust us to ensure they can continue to operate successfully amidst digital developments. As a result, we think we can continue to be relevant in the market.

How have you overcome obstacles?

The major bumps in the road always come when there are changes in the market – the financial crash of 2008 being the most obvious one. We were, however, flexible enough to navigate that very successfully.

We also weathered the period when the government shut down spend on digital consultancy. At the end of the this period we worked on the Martha Lane Fox report, writing the new digital strategy for the government. This guide to digital transformation is still the blue print for governments today and is being used globally.

What do you do to market the business?

At Transform, our marketing approach has always been about relationships, so vital to retention and referrals, two areas we’ve always performed very well at. In many respects, we’ve been modest in our approach to marketing the business, becoming a bit of a best kept secret in the process.

However, we’ve reached a point where the time has come to share the great work we’ve been doing and ensure we’re known for it.

What the hardest thing about running your own business?

I think the hardest thing about running a business is how hard we are on ourselves because we genuinely care about the work we do. You have to constantly be on your toes, ahead of the latest innovations, ensuring we can respond to developments relevant to our clients – you don’t get much rest!

The most fulfilling thing is the fact I get to work on some of the most exciting projects with some of the smartest and most interesting people in the business. It’s so great to see our work actually make a huge impact on a business, so things like implementing click and collect for Argos that completely overhauled their market offering.

What is your biggest mistake?

The only thing that really stands out for me is that we could have pushed for growth more aggressively 7 years ago – not that we didn’t push, we just could have accelerated the speed in which it happened.

How is the business different?

Our associate model is very important to us, so much so that it’s become the life of the business. What it means is that clients get the best person for the job, not the next person on the bench – we custom build each team to fit individual client’s needs.

Our aim is to work with our clients to get fishing rods, not fish, which basically means we don’t want them to become dependent on us. We want them to have the tools to grow, so they can come back to us for the next stage of their development.

We do things this way because we’re really focused on client satisfaction and have outstanding ratings amongst our clients, this is why our repeat and referrals are so strong.

How do you keep staff interested?

We are a part of the Enging group, which is a Times top 100 organisation. With this association comes all kinds of positive attributes and incentives that make us a really positive place to work.

Essentially, our associate model means we can focus on allowing employees to work on the things they enjoy and enables them to really connect with their clients.

Do you think the government is supportive of businesses like yours?

As part of the Engine group we’re not really exposed to this anymore, but when we were starting up we found the business environment a challenge and could have benefited from slightly more support than we received – but this is 16/17 years ago now!

What are your top three tips for people starting a business today?

  1. It’s harder than you think it is.
  2. If you get it right it’s more enjoyable than you think it could be.
  3. If you’re absolutely convinced that it’s the right thing to do just do it now.

Board Games: what can sport and business learn from each other?

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Two different worlds facing near-identical challenges: what can Sport and Business learn from each other?

The subject of leadership has dominated the news agenda in recent months, ranging from who should lead our country to the behaviours of those at the very top of our businesses. Surprisingly, our politicians had the headline messaging right: good leaders are strong and stable, for the many not the few. If only they offered more than platitudes. Talk of leadership always invites parallels with the world of sport where the topic is much debated; from the leaders on the pitch to the leaders in the Boardroom, leadership has fuelled many a radio phone-in. As a long-suffering Leeds United supporter bruised by years of disappointment, the recent absence of leadership both on and off the pitch had me at times longing for a return to the 70s. But as Rudyard Kipling wrote, ‘never look backwards or you’ll fall down the stairs.’ So rather than risk injury, I’ll look instead to the future – and the ever-increasing importance of good leadership. We’ll return to Leeds United much later.

The parallels between business and sport – whether that’s leadership, culture, performance metrics or governance – have always intrigued me. Off the bat I’ll declare a personal interest; as a board member of a sports governing body, as well as a businessman who’s spent years in senior positions at commercial organisations, I’ve got a foot in both camps. But it’s no bad thing. It’s allowed me to experience the specific pressures these quite different environments face, and it’s also enabled me to spot the common ground – the areas where sport and business face similar, and in some cases identical, challenges. And there are many.

All of which got me thinking: what can these two distinct sectors learn from each other? My instincts reckon quite a lot.

It’s fair to say that there have been too many examples of sport and business finding themselves under a cloud in recent years. The well-documented travails of governing bodies in numerous British sports are yet to cross the finishing line while the international soap opera that is FIFA is currently broadcasting its latest episode. The corporate world is facing similar scrutiny; from Google to Uber, Barclays to United Airlines, large corporations are hitting the headlines for the wrong reasons with their ethics and culture being called into question. In every case these are leadership issues. The catalysts for crises, whether an aggressive air steward or a sexist employee, may occur at ground-level, but the enablers – the culture – emanate from the Board.

Let’s look at two examples from sport and business. A major UK supermarket chain has been in the news recently after shareholders responded angrily to its CEO being awarded a significant boost to his remuneration package. Similar disquiet has occurred at other well-known UK businesses culminating in a House of Commons Select Committee calling for a ban on complex incentive schemes for top executives and a crackdown on corporate governance. In the sporting arena, the governing body of one of the UK’s most successful Olympic sports has been accused of covering up allegations of bullying. The subsequent investigation has had widespread media coverage, damaging the sport’s reputation and taking the shine off its hard-earned medal haul. In turn bringing changes at the top of the organisation hopefully to steer them back to world leading status.

The two situations may be very different but, equally, they are analogous. In each example there’s a case for arguing that the leaders of the organisations had fallen asleep at the wheel and that Board members should never have allowed either situation to progress as far as it did. In both cases the organisations had, prior to the controversies, enjoyed considerable successes. This raises an interesting question: were Board members paying sufficient attention to the impact of ethical issues on the culture of their organisations, or were they blinded by a disproportionate focus on ‘performance’? In the case of British Cycling, I don’t wholly subscribe to that view, but it’s an easy trap to fall into. In performance sport, the focus on results can be all-consuming. In business, an obsession with ‘hitting the numbers’ can be similarly dominant. But it’s only half the story.

Naturally, all successful organisations put their achievements down to having an effective commercial strategy. It no doubt plays its part. But, in these times of increased public scrutiny, an old Peter Drucker quote has never felt more appropriate: ‘culture eats strategy for breakfast’. If an organisation’s culture is right, it will do the right things.

Defining ‘culture’ is potentially quite difficult; culture is all-encompassing but, at times, it’s intangible. For me, the best definition is simple: culture is what happens when the boss leaves the room. Fundamentally, it’s the responsibility of the Board to nurture that culture. What’s more, in competitive environments where the race for results can steal focus, the Board is accountable for both performance and culture – and the two are not mutually exclusive. It’s here where good Non-Exec Directors can play a valuable role in challenging the Board and asking the right questions; is the thinking one-dimensional, focusing only on the numbers? Or is it multi-dimensional, focusing on the health of the organisation, its culture and its ethics?

Organisational culture is the stuff of corporate governance. Once again this falls under the jurisdiction of the Board. It’s in this important area that sport and business might benefit from some shared learning.

Despite the recent headlines – in fact perhaps because of them – the current focus on strong governance in UK sport is significant. There is huge desire and no less effort to demonstrate good governance across sport. This culminated in the 2016 publication of ‘A Code for Sports Governance’, which is being applied as a required standard for all bodies funded by UK Sport and Sport England. I encourage you to read it.

Some of its guidelines relate to issues that are recognisable in the commercial workplace and should translate in the business environment. Primarily, the Code sets out ‘gold standards’ of transparency, accountability and financial integrity to be adopted across sport in the UK. In particular it calls for greater transparency in publishing information on the structure, strategy and financial position of organisations. Similar measures already apply in commercial organisations but there’s huge variability in requirements and adoption. Could businesses use these guidelines to improve their performance? Certainly, good leadership requires a clarity of purpose. Efforts to improve transparency, accountability and integrity can only strengthen that resolve.

Another mutually recognisable area is gender diversity. The Code outlines an ambition to increase the skills and diversity in decision-making across sport, setting a target of at least 30% gender diversity on Boards. At present, whilst some governing bodies are already at that level, many others are some way off. Typically, board composition is unevenly distributed – a situation that arguably mirrors Boards in many commercial organisations. My view is that the 30% directive is something that all business should strive to achieve. There’s a wealth of research out there that shows a tangible improvement in performance in organisations whose Boards have an appropriate gender balance. Similarly, evidence shows that businesses who have female CEOs tend to have more women coming through into senior positions. This can only be a good thing. Initiatives like the 30% Club indicate positive signs for the future. Businesses can certainly learn from sport in this area.

For the final example of the parallels between business and sport – and the impact of culture on an organisation – I’ll return to my beloved Leeds United. The gradual shift in ownership from Cellino to Radrizzani has brought with it a culture of professionalism, organisation and structure that had been missing at the club for years. It took us to the brink of the play-offs against all expectations and enabled an air of calm as the club transitioned to a new coaching set-up following the departure of the manager at the end of season. This month, the club even bought back its Elland Road home, 13 years after being forced to sell it. Everything about the way the organisation now operates is entirely different to what it was just 12 months ago. This is a culture created by one leader – the owner of the organisation. It shows how strong leadership, structure and a healthy culture can have a powerful impact both on and off the pitch.

So I’m no longer looking back to the 70s – I’m looking forward to next season. And as I embrace the new era, I’ve finally worked out that even Leeds legends can be wrong. In a professional world where the blinkered focus on winning is now rightly decried, Billy Bremner’s 70s remark that you get ‘nowt for finishing second’ is clearly outdated. More than that, it’s plainly not true. If we finish second next season, we’ll be back in the Premier League! And that would be good for sport and good for business.

YOUR #CMO NEEDS TO BE THE SHERLOCK HOMES OF THE C-SUITE

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A write up from a Leaders Breakfast I chaired recently for Transform & Princedale Partners with an impressive group of Chief Marketing and Customer Officers.

Sherlock

Your #CMO needs to be the Sherlock Holmes of the c-suite.

I love this expression and not purely because I’m a big fan of the 20th Century private detective but as a marketer it highlights the skills we have the potential to bring to the boardroom table. Last year Forrester research predicted that in 2017, at least 30% of CEOs would get rid of their CMOs for not having ‘the blended skill set they need personally to pull off digital transformation’.

With this in mind we invited a bunch of CMOs from well-known UK brands to join us at one of our digital leadership breakfasts. Did they feel armed with the required mix of left and right brain thinking to steer strategy, advise on technology and curate the content demanded by today’s audiences?

As we discussed transformation, culture, technology, job titles and shareholder value, one attendee said “The days of marketing being all about going into an ad agency and starting a campaign are gone. If they’re not, they should be. That’s marketing for the dark ages.” Marketing’s business as usual has to be data, brand AND the customer experience if it’s going to have a positive impact on the bottom line.

So is it the role or the title that’s under threat?

Today’s boards include Chief Marketing Officers, Chief Customer Officers, Chief Growth Officers all of which seem to be subtle variations on the same theme. How do they interact with traditional CEO, CIO and CTO roles in an efficient and effective way? Collaboration is fundamental as the lines around who owns the customer, data and technology become blurred. In the past, IT owned technology systems but in a digitally enabled organisation they need to be co-owned. Marketing sets the requirements, IT delivers the system; neither function owns these systems in isolation. The general consensus round the table was that job title isn’t important — understanding the customer, recruiting the smartest people to solve the hardest problems, supporting a culture of innovation — these are the real priorities of the modern marketing chief.

Internal agents of change

Sitting in the sweet spot between IT, HR, Finance and Sales the CMO (if we choose to keep this title) is in the privileged position to drive change. They recognise the need to connect — with product teams, recruitment teams and development teams. An experienced coder is wasted if they’re sat in a corner with no input to conversations that determine the ‘what’ and the ‘how’. There’s no room for marketing activity that focuses on how many ‘likes’ a business receives, it’s about fixing issues and solving problems that add value. Business value.

Transformation — it’s never over

We challenged the term ‘digital transformation’ and whether it’s redundant now; is it simply ‘the way things are around here now’? We came to the conclusion that transformation is never complete. Once one goal is reached a new one will take its place. The primary challenge is to create a culture where it’s the job of everyone in the organisation to deliver against those evolving goals.

Future marketeers

Finally, talk turned to people joining the marketing profession. How often will they change roles? Every 6 months? What skills will they have? Digital, yes but also an understanding of user experience, agile working, business intelligence, process and customer experience. Think about the Spotify approach — flexible objectives, cross functional teams, self-reliance. About the significance of role clarity within this way of working. Whatever direction an organisation takes their people need to be accountable and empowered; they need to believe in the purpose of the organisation and the part they play.

30% out of a job in 2017? I’d be very surprised if that statistic applies to any of the CMOs we met over breakfast. Unless one of them decides on a career change and auditions to be the next Sherlock Holmes.

It’s time for digital to have a seat in the boardroom

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Success comes when the board and CEO lead the way, so if digital transformation is core to your strategy then it’s time for digital to have a seat in the boardroom. The CEO and all of the C-suite need to drive the digital agenda, to drive a culture that is customer centric and puts digital at the forefront – not as an afterthought. Extending digital ownership beyond a function or department is key, and having a leadership model that can drive the digital transformation journey is key.

The push into an ambitious digital transformation will challenge the status quo and the equilibrium of the organisation. It will be a journey into unknown territory, sometimes demanding a leap of faith into new business models and/or investments. New skills, approaches, technologies and products will be needed or will emerge. The very culture and balance of the organisation will be tested and/or changed. Success in these situations will only come if the CEO and leadership team are committed and seen to be committed.

Embrace digital, slash the silos:

Organisations still find it hard to categorise digital, fluctuating between a horizontal function and a vertical department; battling with questions of benefit attribution; struggling between traditional and new organisational models. Looking at digital as an eco-system which affects and is affected by the whole organisation, creates a new way of looking at the challenge, a way of opening up collaboration, culture change and new business models. It’s time to stop trying to change digital to t the business and instead look to change the business to accommodate digital.

Digital and innovation are everyone’s responsibility and opportunity. Be prepared to change the people, processes and technology to make this happen. Embracing digital as a silo-slicing collaborative function in the business creates a chance for individuals and teams to work together in new ways and, critically to understand, empathise and respect the different functions that form the foundation for innovation and lasting change.

How to organise for digital has been an on-going question, and remains in flux as organisations change and mature. The most successful models enable a bi-modal operating model, where the business can operate successfully while the innovation and change finds a way to work with it. Whether working in agile, waterfall or somewhere in between, the most effective digital model is one where cross-functional teams come together for projects de-coupled from their reporting lines.

This approach reduces the pressure on getting the perfect fixed structure in place at a time when flux is the only constant and has the benefit of stepping into the fully-integrated nirvana in controlled project situations. There are several factors that can either enable or prevent digital teams working in this way:

  • Shared objectives – collaborative fast-paced teams can’t afford to be pulling in different directions; alignment around a set of shared customer and organisational objectives is essential.
  • Culture shift at the top – in the majority of organisations, the barriers and silos are most firmly reinforced at the top of the organisation.
  • Co-location for collaboration – working together in a shared space with the right tools to involve remote teams and individuals; beats a lab in Shoreditch hands down for innovative digital delivery.

Digital leadership is a team sport:

The appointment of a CDO is becoming increasingly common, especially for organisations in the early-mid stages of their digital transformation, with numbers doubling year-on-year according to the CDO Club. The definition of what this role means is wide ranging and the ambiguity in role, remit and experience is adding to the confusion. Add to that the proliferation of the other C-level roles and the ownership of the various aspects of digital is more unclear than ever.

CEO – the board and CEO cannot delegate digital, they need to overcome the fear of the technology (which they don’t need to understand) and engage in the impacts and outcomes (which they really do).

CFO – a report from EY found that only 50% of CFOs are making the shift to a digital business model a priority over the next three years, and suggest that many simply do not understand the impact digital could have on their business.

HR & Talent – the link between digital and HR is about to get more important by a magnitude, from recruiting scarce resource to owning the cultural change, from delegation to collaboration – it’s currently one of the furthest away from digital.

CDO – having a Chief Digital Officer does not correlate to digital maturity.

While not arguing against the creation of the CDO as a role, it is important to draw the distinction between a seat at the table and a transformational intent. If in doubt, ask yourself, how the does the role fit in the whole model for digital leadership in this organisation? The rise of digital is set to continue, and delivering large scale change using diverse technology takes organisation infrastructure which the CDO sits at the head of. However, that alone will not deliver the DNA level change that organisations need to embrace to make digital part of their business.

Paradoxically, in many ways the rise of the CDO can be less helpful to digital transformation than the investment would suggest, and this has nothing to do with the capability of the individual in question. For digitally mature organisations the appointment of the CDO is a culmination of business strategy and is both an organisational and reputational move.

However, for immature organisations the creation of the CDO, or similarly titled role, can act to reinforce rather than break down the silos – trying to solve the problem of digital through hiring rather than changing. A 2014 Gartner survey of CIOs found that only a third of companies with CDOs were “very clear” on how the role integrates with wider IT needs.

Instead of making digital and innovation part of the DNA of the business, it is hived off to one side, actively invested in but remaining on the periphery of the business. Culturally this can be even more damaging signalling to the rest of the organisation that they are not considered innovative, and valuing the ideas of a special few over the collective brain of the wider business. Locating these labs in high- cost uber-cool locations away from the core business reinforces this.

Bring the boardroom onboard

Following the logic of slashing the silo, of digital leadership as a team sport* it follows that the entire C-suite needs to embrace its role in the digital transformation journey. The C-suite is critical and that’s covered already, but what about the external directors who steer, challenge and influence the CEO?

A Russel Reynolds study of all board members in the ‘Global 300’ companies revealed; only 10% of the boards could be classified as “Highly Digital.” The definition used in this research is any board with 2 or more digital Non-Exec Directors (dNED)**. The study concluded; “while digital is impacting some industries more than others, we believe every company should be preparing for the disruption to come. To date, few companies have established boards that are equipped to guide them through these changes.” This will change, as it must, but in the meantime it leaves a heavy burden on CEOs and the C-level leaders to carry.

This can be made easier with the aid of well applied business transformation techniques.

  • Bring to life the challenge, and the opportunity using digital stimuli to get them thinking responding to rapidly changing customer behaviours and disruptive digital business models.
  • Enlighten those not yet digitally savvy using the external influences they can relate to, that might be industry analysts or innovators, but in language they can relate to.
  • Leverage the strength of the C-suite aligned in a determination to take on the digital transformation journey, such alignment is very powerful in the boardroom.

Be brave, make it a team sport and take the boardroom with you.

 

*Credit ‘Digital To The Core’ – Mark Raskino & Graham Waller, Gartner Inc.

** Russell Reynolds Digital Board Director Study – definition of dNED

1     Plays a significant operating role in a digital company—an organization with a primary business function based on web-based, social, mobile/device, cloud/SaaS or big data platform

2     Has a primary digital operating role with a traditional company

3     Has two or more non-executive board roles at digital companies

Digital Thinking; raising the bar

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Superhero Training

Even young superheroes need to train to be stronger.

I’m still buzzing from a lively roundtable discussion at the digital leadership breakfast I co-hosted this morning. One of the key themes that struck me in what I was hearing from our guest Chief Digital Officers (CDOs), eCommerce Directors and digital Non Execs (dNED) around the table was an emphasis on finding the best way to leverage Digital Thinking in their businesses.As with any good roundtable the conversation was lively and wide ranging. We talked about emerging methodologies, we talked about disruptive start-ups, we talked about talent development and we talked about examples of best practice in big companies. But ultimately everyone at the table was focused on what we can all learn. From each other, from inside and outside our businesses, and from everything we do. To leverage Digital Thinking.

The shared stories about waterfall vs. agile and the variations different businesses are adopting to fit their needs concentrated not on the technology and methodologies required but rather on what can be achieved in terms of business and customer impact. Digital Thinking: not dogma.

When we compared what each business is doing to develop digital talent more widely – digital boot-camps, requiring staff to have a ‘digital license to operate’, video learning programmes – they all have one thing in common: adapting to what works in the context of the specific business. Digital Thinking: not a sheep-dip approach.

We discussed testing the water to see how working with start-ups can raise the game of the core business and lift digital performance to the next level – speed-dating with start-ups to partner on new online conversion initiatives, employing your own scout in Silicon Valley to benefit from emerging tech, acquiring start-ups and fostering the learnings across into the core business – different strokes for different folks. Digital Thinking: not accepting the status quo.

And we felt collectively that the approach of adaptive strategies for the big enterprise to pivot the core business strategy – a concept much more familiar in the start-up world – is possible now with the pace of digital change and the insights from customer development and data insights. Digital Thinking: not straight line thinking.

All in all, a fascinating session, thanks to all our guests. It’s safe to say that given the right environment this generation of digital leaders is committed to positive change in their businesses. Digital Thinking: raising the bar.

I’m already excited about planning the next in our series of digital leadership breakfasts.

Digital leadership in the boardroom; where is it coming from?

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Digital leadership is a cornerstone of the eco-system, and is often the difference between delivering digital functionality and digital transformation. We shared this view in our report – Digital Maturity: The butterfly effect – and it’s a subject we’ve discussed both here at Transform and with digital leaders.

I recently helped to host a Transform/Princedale Partners breakfast event for a group of senior execs where we talked about digital leadership and what it means to them and their organisations. In the room were digital leaders who sit on the board and others who don’t but still ‘own’ the digital agenda. Some felt their digital objectives are integrated within the company strategy, others felt they are fighting to secure boardroom ownership and the support they need to be successful.

Inevitably we spent some time discussing the popularity of the relatively new role, Chief Digital Officer (CDO). I’ve been following the evolution of digital leadership for some time now including the relatively recent emergence of the CDO role, positioned in some organisations as ‘Transformer in Chief’. This approach is understandable and maybe even appropriate for those organisations where digital transformation is finally being put centre-stage. But there are also those using the role to lump together several big strategic priorities such as customer and data under one convenient banner. Unless your CDO is Superman or Wonder Woman you’re unlikely to see great success from this approach.

Looking at the information available from various head-hunters and other observers (and bearing in mind their vested interests) it would seem like the rise of this role looks set to continue. The number of CDOs appointed is doubling year-on-year, with 2,000 in place globally, according to the CDO club. For organisations in the early-mid stages of their digital transformation this is an increasingly common appointment. The evidence certainly backs the general view that many more organisations have put a senior person at the helm for their digital transformation journey.

But what’s actually happening in the boardroom? Most of those 2,000 CDOs won’t be Board Directors so how might this trend help to create more or better digital leadership in the boardroom?

Into the boardroom

The rise in volume of CDOs also seems to be feeding the advancement of a few CDOs into the boardroom, often as CEO. Research from Harvey Nash suggests the rate at which CDOs are being appointed or promoted into the boardroom is rising so rapidly that in the world of PR it is excitedly described as “exponential”.

“The rise of the CDO has been exponentially fast! So fast in fact, no other role comes close in comparison growth wise – not even the CIO,” Anna Frazzetto, Chief Digital Technology Officer & SVP at Harvey Nash, said.

David Mathieson, founder of CDO Club claims that 11 CDOs were promoted to CEO in 2015 and five became board directors/non-executive director (NED). He goes on to say “I don’t know the number of CMOs or CIOs who became CEO last year, but given how new the CDO title is (10 years old), and that there are hundreds of thousands of the former and only a couple thousand CDOs, I think this is a startling, meteoric rise.”

But coming through from the role of CDO is surely not the only route to digital leadership in the boardroom? After all, digital transformation affects every aspect of modern business – so which executive should lead digital strategy here?

The boardroom power struggle

The situation and approach varies quite considerably in my experience across different organisations, and is often driven more by the culture and balance of power than by any templated approach. Most commonly the Chief Marketing Officer (CMO) or the Chief Information Officer (CIO) is leading the charge, sometimes from a position of strength where they bring the right understanding and skills, sometimes less so. This can result in some very real digital leadership tensions in the boardroom.

Richard Bhanap of Leading Edge Forum makes the point in this article about digital leadership in the C-suite.

“Soon, every member of the C-suite will need to be leading digital. Abdicating digital to a CMO, CIO or even a newly appointed CDO will be the fastest route to executive obsolescence and accelerated retirement.” He goes on to say, “there needs to be a concerted effort to raise the digital IQ of the whole senior leadership team which, in turn, will ensure the broader organisation appreciates emerging digital opportunities and imperatives.”

The highly digital board

In a survey conducted for the World Retail Congress one of the headline findings is that “British retailers lack relevant e-commerce experience on the boards”, with “only five per cent of executive directors at the leading UK-listed bricks and mortar retail companies have an online background.”

Where is the board level digital leadership experience coming from? Some boards are bolstering the digital experience by recruiting what they see as specialist digital Non-Executive Directors (dNED).

But FT.com quotes Russel Reynolds research into the scarcity of digital directors claiming “a mere 1% of NEDs at Europe’s top 100 companies have proven digital experience compared with 8% in the US.”

In that same report they claimed that that the FTSE 100 has only four “highly digital” boards, defined as those with two or more directors with serious digital experience.

Who should be leading this? According to Juan Pujadas, PwC, the CEO has to take ultimate responsibility “Digital transformation is comprehensive. It’s not just a matter of transforming part of the business; it’s about transforming the entire business. And who else but the CEO should be leading that charge?”

3 areas of leadership critical to digital success

We agree but we think there are actually three areas of leadership which will be critical to digital success in the next decade:

  1. CEO and top level leadership cannot delegate digital, they need to overcome the fear of the technology (which they don’t need to understand) and engage in the impacts and outcomes (which they really do).
  2. CFO – a report from EY found that only 50% of CFOs are making the shift to a digital business model a priority over the next three years, and suggest that many simply do not understand the impact digital could have on their business.
  3. HR & Talent – the link between digital and HR is about to get more important by a magnitude, from recruiting scarce resource to owning the cultural change, from delegation to collaboration – it’s currently one of the furthest away from digital.

In my opinion, whilst the rise of the CDO may be exponential, there’s a long way to go before digital skills are commonplace across all board members in a way that elevates the strategy for digital transformation to the core of the business.

I’ll continue to follow this topic further, so if you would like to discuss it or share your own thoughts please get in touch. I’m interested to hear what you think.