STRATEGY, NOT TECHNOLOGY, DRIVES DIGITAL
TRANSFORMATION PART IV
5 LEADING THE
DIGITAL TRANSFORMATION
More than half of respondents from digitally
maturing organizations say that the digital agenda at their companies is led by
a single person or group. Nearly two-thirds of those respondents indicate that
the person or group includes someone at the C-suite or vice president level. In
early-stage companies, only 34% have a single executive or group driving the
endeavor. “Managers need to go beyond saying digital is a good thing and do
it,” says EDHEC Business School associate professor Charki. “They need to do it
themselves and play the game themselves.”
Leading by example is part of playing the
game. “You have to be an influential leader in the physical, virtual and
augmented worlds,” says Disney senior vice president Milovich. “We have to
engage people through Twitter and other social platforms, but then also stand
in front of 100 people and be authentic. We toggle back and forth between
virtual and physical platforms all day long.”
Employees in digitally maturing organizations
are confident in their leaders’ ability to play that digital game. More than
75% of respondents from these companies say that their leaders have sufficient
skills to lead the digital strategy. Nearly 90% say their leaders understand
digital trends and technologies. Only a fraction of respondents from
early-stage companies have the same levels of confidence: Just 15% think their
leaders possess sufficient skills, and just 27% think their leaders possess
sufficient understanding.
Respondents who rate their companies’ digital
maturity higher are more likely to indicate they are confident in their
leaders’ digital skills and understanding.
B. Bonin Bough, senior vice president and
chief media and e-commerce officer for Mondelēz International, the global
snack-food spinoff of Kraft Foods, points out that when digital transformation
first appeared on the business world’s radar, there weren’t many executives
with a deep understanding of digital technologies. There also weren’t many
digital natives with senior-level experience in large companies. “Now we have
an entire workforce of digitally fluent talent that has worked in big
businesses such as Amazon and Google,” he says. “Digital fluency is on the
rise.”
However, digital fluency doesn’t require
executives to be sophisticated technology users themselves. In our interviews,
we found that the simple practice of commenting on employee posts or “liking”
them is a powerful means to amplify a leader’s presence and digital commitment.
As Scott Monty, formerly of Shift Communications, puts it: “You can lead by
example by showing your support for teams and helping them understand how their
work fits into the overall business plan.”
Several interviewees went so far as to say
that technology skills aren’t nearly as important as they once were. Beth
Israel Deaconess Medical Center’s Halamka points out that when he was a CIO in
1997, he wrote code. Now the emphasis of his job is knowing the business,
creating strategy and influencing the organization. David Mathison, founder of
the CDO Club, a global professional community of digital officers, concurs.
“The technical part of a chief digital officer’s job is becoming less and less
important,” he says. “Hitting the ground running and building digitally enabled
businesses are becoming much more critical.”
While the vast majority of respondents, more
than 80%, say their organizations see digital technology as an opportunity,
only 26% say their companies see it as a risk. The exuberance ignores the fact
that what is good for one company can be just as good for another — competitors
may be able to quickly catch up.
Early-stage company exuberance likely ignores
the fact that what is good for one company can be just as good for another.
Listening to the environment and learning
from it is an equally important leadership expectation. Sree Sreenivasan, chief
digital officer at the Metropolitan Museum of Art, quips that the chief digital
officer is also the CLO (chief listening officer) with the responsibility “to
listen for new ideas, listen for talent and listen for people who can help us
and work in partnership with other organizations.”
Interestingly, leaders and employees do not
always recognize when they’re “hearing” something of value. UC Santa Barbara
professor Leonardi conducted an experiment at a major financial service company
where managers and employees could use a social media platform to “overhear”
what their colleagues were talking about and accelerate the process of finding
out who knows what. The experiment proved successful: Participants demonstrably
increased their knowledge of who to turn to in the organization. But many
participants didn’t feel like they had learned anything.
Leonardi describes this as a paradox between
the ability to listen and the modern online search mentality. “This is the
paradox of the system like this, I think, that people learned a lot by just
becoming aware. They learned by proactively scanning the environment, without
any idea that anything they were gleaning would be useful in the
future.” Now, according to Leonardi, we search and gather data when we run
into a problem and we only listen to the information that addresses it. He
notes that before, people didn’t necessarily think they were learning, but
eventually the moment came when the bits and pieces of information came together
and added up to something important. The implication: It is hard to value newly
created forms of knowledge when you don’t recognize their existence.
6 CONCLUSION:
THE CONTOURS OF THE END STATE
In this report, we have been careful to refer
to companies as “digitally maturing” rather than “already mature.” The digital
transformation of business is a new phenomenon, and no company has yet reached
the end state nor definitively defined it. But the contours are becoming
clearer, as are the practices that move companies forward. In our interviews,
we delved into what executives and thought leaders see on the three- to
five-year horizon that companies should be cognizant of. The discussions found
three key trends that will impact digital strategy going forward as well as the
leadership approaches and cultures needed to support them.
Charting Digital Transformation
Digitally maturing companies behave
differently than their less mature peers do. The difference has less to do with
technology and more to do with business fundamentals. Digitally maturing
organizations are committed to transformative strategies supported by
collaborative cultures that are open to taking risk. Equally important, leaders
and employees at digitally maturing organizations have access to the resources
they need to develop digital skills and know-how.
Greater integration between online and
offline experiences
Digital strategies will need to address the
increasingly blurred distinction between the online and offline worlds. At the
Metropolitan Museum of Art, for example, the goal is to create compelling
online experiences that induce people to visit the New York City museum and
then stay connected through social and mobile.
Emory University professor Konsynski says
that digital technology will provide a completely immersive experience:
“Products such as the Google Glass wearable computing device and Oculus will
bring augmented and virtual reality to levels we have never experienced in our
personal or work lives.” Ben Waber, president and CEO of Humanyze, foresees
dramatic growth in wearables: “I think computing will eventually be just in
your clothing,” he predicts.
Data will be more tightly infused into processes
Organizational cultures must be primed to
embrace analytics and the use of data in decision making and processes. In last
year’s social business report, we found that socially mature organizations
integrate social data into decisions and operations. Twitter is meeting a
similar need by expanding its scope from being just a social media platform to
being a social and mobile analytics provider. In 2014, Twitter acquired the
social data aggregator Gnip as part of Twitter’s strategy to create a new
service offering that integrates social and mobile data with analytics to
provide real-time business intelligence. Data is also changing the delivery of
health care. “We can identify pathogens and chronic diseases quickly with
rapid, low-cost diagnostic tools,” says John Brownstein, an associate professor
at Harvard Medical School. “These tools can be connected directly to
individuals and create an aggregated view of the population’s health.” As
Harvard chief digital officer Hewitt points out: “We are at the cusp of really
interesting and valuable predictive analytics for the enterprise.”
Business models will reach their sell-by dates more quickly
Leaders of the so-called “sharing economy”
such as Uber, the mobile ride-services company, and Airbnb, the online
accommodations marketplace, are rewriting the economics of their industries.
Other disruptions are waiting in the wings. Emory professor Konsynski points
out that the very premise of ownership is fading away, and Millennials are less
interested in ownership than are members of earlier generations. The onus is on
leaders to stay ahead of the curve for their industries’ evolving business
models. “By the time it’s obvious you need to change, it’s usually too late,”
says John Chambers, Cisco’s CEO. “Very often you have to be willing to make a
big move even before most of your advisers are on board. You have to be bold.
And you need a culture that lets you figure out how to win even without a
blueprint.”
Whatever the end state of digital
transformation turns out to be, reaching it is not simply about technology. Our
research found a truism that is often lost in the face of technology hype:
Digital maturity is the product of strategy, culture and leadership. To
position their organizations to move forward into a digitally transformed
future, business leaders should tackle these questions:
Does our organization have a digital strategy
that goes beyond implementing technologies?
Digital strategies at maturing organizations
go beyond the technologies themselves. They target improvements in innovation,
decision making and, ultimately, transforming how the business works.
Does your company culture foster digital initiatives?
Many organizations will have to change their
cultural mindsets to increase collaboration and encourage risk taking. Business
leaders should also address whether different digital technologies or
approaches can help bring about that change. They must also understand what
aspects of the current culture could spur greater digital transformation
progress.
Is your organization confident in its
leadership’s digital fluency?
Although leaders don’t need to be technology
wizards, they must understand what can be accomplished at the intersection of
business and technology. They should also be prepared to lead the way in
conceptualizing how technology can transform the business.
Addressing these questions can strengthen an
organization’s ability to keep pace with digital technologies as they transform
business and society. Change will be rapid and intense, and the road ahead is
probably long. As Disney’s Milovich puts it: “We are still in the first quarter
of a four-quarter game.”
THANKS TO
PUSHKAR GHANEKAR
FOR SENDING
THE LINK
July 14, 2015
by: GERALD C. KANE, DOUG PALMER, ANH NGUYEN
PHILLIPS, DAVID KIRON AND NATASHA BUCKLEY
https://sloanreview.mit.edu/projects/strategy-drives-digital-transformation/?utm_source=twitter&utm_medium=social&utm_campaign=dlrpt15
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