In most cases, digital transformation will span multiple parts of an organization. Although there might be a single person coordinating the program, multiple people will need to play leadership roles. The organization’s needs and the scope of the program will determine the best approach to achieve this level of collaboration in leadership. Some organizations might institute a task force, while others might form a steering committee.
Errors made in digital transformation initiatives include the following:
- The CIO is responsible for the project, but other business units or functional executives are not involved. Digital transformation benefits from leaders who can bring multiple business units together to define and evaluate options, agree a common approach for the whole organization, and implement it using stakeholders from the impacted parts of it.
- Seeing digital transformation as a project or program, with a senior project management expert leading the initiative. Although good project or program management skills are essential for successful planning and implementation, that is not the primary requirement of a digital transformation program. The program will impact the organization’s strategy and its business and operating models. Digital transformation benefits from leaders who have an in-depth knowledge and experience of the organization and its business.
- Appointing a technology expert to lead the transformation program. Although technology might be at the centre of digital transformation, many aspects of the organization will be transformed. Digital transformation benefits from leaders who fully understand how those components are related, how they contribute to the organization’s success, and how technology impacts each of them.
- Only focusing on emerging technologies, and forgetting that the technology already used by the organization is critical to its success. This common error is based on the perception that newer innovations will automatically overcome the limitations and challenges of the current environment. In fact, emerging technology is far more complex, and demands that the organization must already be able to understand and effectively manage the existing environment. Digital transformation benefits from leaders who understand the challenges involved with the current environment and seek to resolve those with a combination of existing and new approaches. They do not create unrealistic or uninformed expectations for digital technology, and they ensure that the organization has the capabilities to manage the business and operating models.
- Inappropriately scoping the digital transformation program. This topic is discussed in the next sections.
From these errors, a picture emerges about the type of leaders required for a successful digital transformation:
- They understand the organization, its culture, its capabilities, and its current and desired business and operating models.
- They have access to details of the organization’s strategy. Even better, they are among the executives responsible for defining the strategy and overseeing its implementation.
- They have authority and influence over the areas impacted by the transformation.
- They can understand and clearly communicate the drivers of, and vision for, the transformation.
- Even if they are managing individual, small-scale transformation projects, they can assess the impact of each element of the digital transformation on the organization’s strategy and business and operating models over time. They have direct involvement in the team that defines strategy.
- They are senior leaders, usually at the executive level, who can easily work across organizational boundaries and who have the respect of, and access to, other senior leaders.
- They manage a team of experts in business processes, technology, project and program management, workforce management, organizational change management, and architecture.
- They can build strategic relationships with external suppliers, partners, and vendors to ensure that they have accurate information about digital technologies and business trends in their industry.
Some organizations have tried to overcome this by creating a new role of chief digital officer (CDO) to lead the digital transformation effort. CDOs are often dependent on the resources and authority of other executives to plan and implement the digital transformation initiatives. Unless the organization’s culture is highly collaborative, this approach generally results in a confusion of roles and decision-making authority, with a corresponding confusion in the various executives’ departments.
Successful initiatives are more generally led by a senior executive reporting directly to the CEO and acting under the CEO’s authority. They facilitate collaboration between executives, and ensure a process of joint decision-making and resource allocation. In the most successful organizations, the entire executive team and its supporting teams are fully engaged in digital transformation efforts.
This might start as a temporary role, depending on the nature of the initiative. If it is a larger, multi-year program, it is likely to form part of, or lead, the formal strategy function of the CEO.
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