Who leads digital transformation?

Dig­i­tal trans­for­ma­tion excites CEOs yet sparks a whirl­wind of change through­out a busi­ness. In an envi­ron­ment where we could hun­ker down in the winds of change, for­tune favours those mak­ing wind­mills.

More than three quar­ters (77 per cent) of UK chief exec­u­tives plan to increase their invest­ment in dig­i­tal trans­for­ma­tion over the next year, accord­ing to PwC’s 24th annu­al Glob­al CEO Sur­vey. This dig­i­tal imper­a­tive to evolve has been accel­er­at­ed by the pan­dem­ic as com­pa­nies imple­ment changes across sup­ply chains and cus­tomer or employ­ee engage­ment chan­nels. 

Mov­ing to the cloud, min­ing data for insights, adopt­ing machine learn­ing, invest­ing in soft­ware devel­op­ment and keep­ing the organ­i­sa­tion secure are just some of the tasks dig­i­tal trans­for­ma­tion entails. It isn’t easy.

Attract­ing and retain­ing the skills need­ed at an oper­a­tional lev­el is also hard. Research by Nominet found that the aver­age tenure of a chief infor­ma­tion secu­ri­ty offi­cer is less than two years in the UK, short­er than a Pre­mier League foot­ball man­ag­er. Sad­ly that tenure is com­mon across sys­tem admin­is­tra­tion, dev ops, big data and data sci­ence. The pools to draw on are small too; across these roles near­ly three quar­ters (78 per cent) are male and near­ly half (48 per cent) have less than sev­en years’ expe­ri­ence.

The next lay­er of expe­ri­ence and skills for dig­i­tal trans­for­ma­tion is the senior lead­er­ship team.  Whether in indus­try or gov­ern­ment, many senior lead­ers didn’t learn their trade as a native tech­nol­o­gy leader and there is a cer­tain amount of learn­ing and lead­ing on the job.  

Take one aspect of dig­i­tal trans­for­ma­tion, the cloud, as an exam­ple. A recent MIT Tech­nol­o­gy Review sur­vey found that 61 per cent of the 300 busi­ness lead­ers polled were increas­ing their invest­ment in cloud tech­nolo­gies as a direct result of the pan­dem­ic. In the past, cloud com­put­ing was con­sid­ered a tac­ti­cal cost-reduc­tion ploy, now the ben­e­fits are more to enable busi­ness­es to grow rev­enue and this requires good use of data.

Trans­for­ma­tive change starts with an ambi­tious vision set by the chief exec­u­tive. In my expe­ri­ence, set­ting a time­line and mile­stones is key. When I worked at Nominet, we set a 1,000-day plan with ten sprints of 100 days, where the busi­ness had key goals to achieve that cas­cad­ed across the busi­ness.  

Exe­cut­ing on the vision will require invest­ments in tech­nol­o­gy and deci­sions on strat­e­gy, which are increas­ing­ly con­verg­ing. A good knowl­edge of how tech­nolo­gies, such as the cloud, can be used to dri­ve a com­pet­i­tive advan­tage is vital. The strate­gic impor­tance of a chief trans­for­ma­tion offi­cer (CTO) in this con­text is increas­ing. They are often at the helm of deter­min­ing the tech­no­log­i­cal choic­es and exe­cu­tion of a dig­i­tal trans­for­ma­tion, edu­cat­ing and influ­enc­ing peers on the jour­ney.   

Par­tic­u­lar­ly in larg­er busi­ness­es, dig­i­tal trans­for­ma­tion pro­grammes are led by new roles, the CTO or chief dig­i­tal offi­cer. These roles help give focus and account­abil­i­ty in three key ways: first­ly, craft­ing the dig­i­tal strat­e­gy and chart­ing the roadmap for change; sec­ond­ly, updat­ing agile method­olo­gies to accel­er­ate deliv­ery; and third­ly engag­ing with cus­tomers.    

Good gov­er­nance and deci­sion-mak­ing also require a board that is tech­ni­cal­ly pro­fi­cient. Dig­i­tal trans­for­ma­tion is about how an organ­i­sa­tion uses tech­nol­o­gy to bet­ter com­pete. As the word “trans­for­ma­tion” implies, long-term suc­cess fre­quent­ly requires more than just allo­cat­ing funds to var­i­ous ini­tia­tives. 

Boards play a crit­i­cal role in the dig­i­tal trans­for­ma­tion jour­ney by bring­ing judg­ment, healthy scep­ti­cism and con­cern for long-term val­ue. Some boards may need their own trans­for­ma­tion if they are going to draw on rel­e­vant expe­ri­ences. Boards scru­ti­n­is­ing plans for a push into the inter­net of things or arti­fi­cial intel­li­gence should know the ques­tions to ask around cyber­se­cu­ri­ty, data secu­ri­ty, exe­cu­tion risks and key per­for­mance indi­ca­tors for progress.

Whether it is find­ing the doers, the lead­ers or the gov­er­nors of the dig­i­tal trans­for­ma­tion, it is a hill to climb and you need a reli­able com­pass to get there. Good luck.