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