Marketing executives are rubbing their hands in glee, and sometimes anguish, at the potential. Product development directors are dreaming up innovative applications. CEOs are envisioning how their business prospects will be transformed – or, if they miss the boat, how they will probably get eaten alive. Consumers are spending their hard-earned cash on, with and through it. The media is full of it and indeed is transforming itself into it.
We are, of course, talking about digital – the rise and proliferation of digital technologies which is disrupting companies out of existence and transforming entire industries. Members of the C-suite in large firms have a huge stake in enabling their firms to survive, compete and prosper in the digital age.
But what is digital and what’s really new about it? Who should drive it? Who should be kept far away? Is there a need for a chief digital officer (CDO)? What’s the role of the CIO and enterprise IT in all this?
The clamour for answers to these questions led to a wide-ranging research project conducted for the Leading Edge Forum, titled Digital leadership in the C-suite. The project, which included surveys and interviews with C-level executives from a wide range of companies across industry sectors, uncovered some very real digital leadership tensions in the boardroom.
Some of the project findings include:
- Less than 40% of companies believe their business leaders are equipped to harness and lead digitisation.
- Most CIOs feel the digital agenda should be theirs by default, but in reality fewer than 35% of today’s CIOs are expected to be tasked with leading digital transformation.
- Many chief marketing officers (CMOs) also make a persuasive case to own and drive the digital agenda, but the scope of digital will inevitably extend well beyond their remit and into functions such as research and development and supply chain.
- As a result, many firms have hired or are considering hiring a CDO, directly affecting the dynamics of the top team.
Digital leadership
While some companies have made huge strides, the majority of C-suite teams have yet to genuinely get to grips with the digital leadership imperative and need to do so urgently. Many CEOs admit that a lack of sufficient digital leadership from senior executives is a major barrier to future success. The frequently strained relationship between marketing and IT on the digital topic doesn’t help.
CIOs and other leaders in enterprise IT in particular often struggle with digital, throwing up their arms in bemusement and frustration, asking, “What’s the big deal? Surely digital is just a new, more fashionable label for IT? We’re already responsible for managing all of that, so why all the fuss?”
Read more about digital strategy
It turns out it is a very big deal. What we call digital is often precisely those things that firms don’t necessarily think should be managed by the IT department in the traditional way, largely because they sit well outside the technology and service domains enterprise IT is typically equipped to deliver.
Smart products, online sales and marketing, customer apps, social media interaction, mobility, advanced analytics, new business models and the like are simply too essential to the future success of the firm to be left to traditional IT.
That doesn’t mean a digital- and business-savvy CIO and IT leadership team cannot take on the company-wide digital leadership mantle, but it does mean, in most companies, it won’t be theirs by default.
Old-style CIOs who don’t adapt to the new world will be increasingly relegated to managing the back-office plumbing. CIOs need to be seen as effective digital business strategists by their business peers, otherwise the digital role is probably out of their reach.
Abdicating responsibility
Although the changing role of the CIO is where a lot of the buzz has been, digital is about a lot more than just marketing. The internet of things, 3D printing, smart machines and a whole host of emerging digital innovations point to fundamentally new product development and supply chain opportunities, business propositions, business models and more.
Soon, every member of the C-suite will need to be leading digital. Abdicating digital to a chief marketing officer (CMO), CIO or even a newly appointed CDO will be the fastest route to executive obsolescence and accelerated retirement.
It’s not necessary for every company to hire a CDO, but under some circumstances it may be a good idea to do so. From the research it’s clear someone on the top team needs to be given formal responsibility for ensuring the right digital agenda is formulated and pursued, and that digital is sufficiently well-understood and pervasive so it becomes part of everyone’s job – in the C-suite and across the organisation.
To make all of that happen, there needs to be a concerted effort to raise the digital IQ of the whole senior leadership team which, in turn, will ensure the broader organisation appreciates emerging digital opportunities and imperatives. Developing and, where necessary, recruiting digital talent across the functions will also be required to shape and deliver the desired transformation agenda.
The alternative is not attractive. There are still too many firms where the status quo prevails – an enterprise IT organisation that is disconnected from or can’t keep up with emerging digital business activities, a C-suite where “technology is not my job” attitudes are still deemed acceptable, and isolated pockets of digital activity in marketing, engineering and elsewhere that have yet to coalesce into a real digital strategy.
Such firms will prove to be increasingly vulnerable to rivals which take the potential of digital technologies and digital disruption much more seriously.
