Leadership in Digital Transformation

Organisations that I talk to about Digital Transformation all have one thing in common – a real strategic intent to take their businesses into the Digital Age. They recognise that to remain competitive and relevant to their customers, they need to become information based businesses.

Despite this strategic intent progress on the issue has been slow.

One of the reasons is that it has been tossed around the boardroom like a corporate hot potato between executives who’ve not known quite what to do with it.

The CIO

In the early days when digital was still firmly part of the technology agenda there were those organisations who jumped right in, declaring digital a paradigm shift, and making ambitious plans to transform through significant investment in cloud technology. Examples include Deutsche Bank (HP), GE (Microsoft), Unilever (AWS).

Investment was significant but then if a Board is presented with something as significant as a paradigm shift in technology they need to make a big response which requires them to spend significant funds. Right? It’s also risky. If the ability to fail fast is at the heart of achieving digital excellence, then this route has the drawback of being simply too big to be allowed to fail.

At this time however the biggest problem was that this approach failed to understand that this is a paradigm shift in business not technology.

The CDO

As organisations began to see that this was more than a technology change they chose to appoint to their executive a responsible individual, the Chief Digital Officer. Again these individuals expected budgets commensurate with their strategic importance on the board. They built relationships with startups, established their digital “hub” or “garage”, and links to academic institutions; and they did proof of concepts by the bucketful.

Fast fail was the objective and failure was what they got. The percentage of proof of concepts that make it to development was extremely small. But again, they’d invested big they’d demonstrated corporate commitment, they’d taken big steps in responding to this big challenge. And the failures, well the impact of the failures was small, too small to make it on to the boardroom agenda.

This is the world of digital inertia, where lots of ideas are awesome but nothing really flies.

So what’s the issue here and how do organisations break out of it? And in whose cool hands has that hot potato landed now?

Well the biggest problem, and the reason for the inertia was a lack of clarity of purpose or direction. Yes, this is a business problem but not a problem with business operations. With digital transformations an organisation does not know the solution that they seek. What they are buying is a business model transformation, and that relies upon understanding and integration to their business DNA. Remember what you are trying to do – to become an information led business in order to remain relevant to your customers.

CEO’s/MD’s of Business Units

Who better to determine the purpose of digital transformation than those who know and own the relationship with the customers. The CEO’s or MD’s of the customer facing business units. Gartner predicted in 2014 that every business unit would become a technology start-up, and that prediction is reality now.

But don’t look to Linkedin or Uber or PayPal for a blueprint. These organisations did not come to digital with the heritage of legacy systems and normalised corporate behaviour that most enterprise organisations have.

A great example is the innovation apparent in Oral B – Proctor and Gambles oral health brand. Their smart brushing system uses IOT technologies to offer users not only 100% improvement in effectiveness, but the ability to communicate and plan oral health with their dentist. Thus Oral B has simultaneously exponentially increased its value to its core customers and now directly communicates with the dental community – a new market segment. It’s simple, its valuable, its transformational

The Role of the IT Service Provider

I think the Digital Transformation hot potato is now in the right hands. And for those organisations who are leaders or visionaries in digital the time to get there wasn’t wasted. Those CIO’s who invested wisely in cloud infrastructure have created more flexibility and agility in digital adoption. Those CDO’s who explored the emerging solutions have brought confidence and insight to the implementation of new technologies with greater understanding of the potential of data analytics and platform solutions.

Regardless of which seat they sit at in the boardroom, for our CIO, CDO, or Business Unit CEO or MD the key to effective digital leadership is a willingness to undertake a journey where the roadmap and end state is unclear and where things do get hot from time to time.

In support, Fujitsu as your service provider can bring insight, broad skills and a wealth of partnerships. That married with the customers desired outcomes and business DNA will create a Digital Transformation journey that can be expressed as a business case and a commercial framework for success. New business models will ensure we undertake that journey as peers, firmly plant that corporate hot potato and grow your digital future.

Sources:

  • Digital McKinsey: Oct 2016: Leaders and Laggards in enterprise cloud infrastructure adoption
  • Gartner: Oct 2014: Gartner Says Digital Business Economy is Resulting in Every Business Unit Becoming a Technology Startup
  • The Digital Business Divide: Analyzing the operating impact of digital transformation,” in collaboration with Keystone Strategy, funded in part by Microsoft

Tags: Change Management, Digital, Digital Transformation, Leadership, Service Provider, Technology

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