LNS Research Principal Analyst, Dan Miklovic explains why first steps toward Digital Transformation need to be taken and how.
Digital Transformation has become the most hyped initiative to hit the manufacturing sector in the last several years. The need to pursue Digital Transformation, from the supplier community to business gurus, has been the topic to generate thousands of pages with material pertaining to the what, why, and when. There is a near universal consensus that as with any other business process change or improvement initiative, Digital Transformation requires support from top leadership to be successful.
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Just recently I wrote about the role leadership plays. My colleague, Jason Kasper, wrote a compelling piece on the value of Digital Transformation near the same time. So, if leadership is the key this leads to the inevitable question: Who should be the leader of a Digital Transformation initiative?
Is the CEO the Best Person to Lead Digital Transformation?
While there is no denying the CEO of any company usually is the key in establishing the culture of an organization and has the central leadership role, it is questionable if they are the best person to lead a Digital Transformation. In a June 2016 article in the US edition of The Guardian, journalist Marc Ambasna-Jones makes the case that CEO’s should entrust Digital Transformation to IT Leaders while Bain’s Laurent-Pierre Baculard, head of their worldwide Technology practice argues the CEO must own the effort but that the Chief Digital Officer is the person should be responsible for executing the effort.
There is no question CEO’s recognize that Digital Transformation is necessary. In a 2015 Forbes article the results of a PwC survey showed that a majority CEO’s clearly believe Digital Transformation is going to be a necessity to remain in business over the long term. They even identified key technologies that they see impacting business including Mobility, data mining & analysis, and the IoT being three of the top four issues with security being the other concern. This begs the question; just what does “Leading a Digital Transformation” mean? Is it the individual who sets the strategy and decides the objective, or is it the person who translates the corporate vision into actionable activities and sees them through to execution? If it is the former, then clearly the CEO is the person who ultimately must step up to that role while, if it is the latter, a more technical person might be best.
The Role of a Chief Digital Officer
In a recent #MondayMusings post, LNS Founder Matt Littlefield wrote extensively on connecting the CEO’s Digital Transformation vision with technology execution. My colleague Jason Kasper, LNS’s lead APM analyst made the argument that the ideal candidate to enable Digital Transformation is the Chief Digital Officer. Given the pace of technology evolution in the key areas of Cloud, IIoT, Mobility, and Big Data & Analytics, it is critical to have someone who can see the potential of emerging and evolving technology to transform the business as an integral part of any Digital Transformation effort. Someone with a combined technical and business background is an ideal candidate to be the tactical leader of the effort.
Since issues like cybersecurity, data ownership and reliability, and responsiveness are still being addressed pursuing Digital Transformation, today is a bit like converting the engines on a plane from propellers to jets, while the plane is in flight! The Chief Digital Officer has to balance the needs of the business to fulfill customer expectations today while positioning the business to serve the customer of the future. This requires some traits that are critical to success in this role besides business and technological acumen:
- Can overcome business or functional silos: Can communicate well and craft win-win solutions that garner buy-in across the enterprise.
- Can facilitate change: Another approach to gaining buy-in. Change is best accepted when people understand its necessity and how it will benefit them.
- Willingness to use metrics to measure effectiveness: Facts and data are powerful tools. Since technology is still evolving, understanding what is not working and shifting gears quickly is critical. Metrics are essential in determining if your efforts are meeting with success.
- Promotes partnerships and collaboration: There is no off-the-shelf single platform, application or company that can provide all of the pieces required to execute Digital Transformation. A good CDO will have to bring multiple internal and external resources together to accomplish their goals.
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