Article Synopsis :
More and more companies are hiring an executive to manage and accelerate their digital transformation. “The New Class of Digital Leaders” from Strategy + Business outlines the trends and challenges facing this new class of corporate digital leader—over 60% of whom have been hired since 2015.
When it comes to implementing a digital strategy, the new class of Chief Digital Officers (CDOs) often encounter several major obstacles: ad hoc digital initiatives spread throughout a large organization lacking central oversight; a traditional culture resistant to change; gaps in the talent required; and legacy systems and structures. Each of these is formidable on their own, and highly daunting when taken together.
Consumer-facing industries such as communications, media, and entertainment; food and beverages; and transportation and travel lead the way in appointing digital leaders, as they seek to improve their customer experiences, connectivity, and business models. Other industries — most notably insurance and banking — seek not only to boost their customer-facing activities but also to more fully digitize their internal operations.
Unifying the Digital Agenda
When a new digital leader assumes the role, there may be pockets of digital activity spread throughout the organization. This loose arrangement may work during the early stages of digital transformation, when experimentation is encouraged. But as the company begins to examine digital initiatives in light of a larger strategic goal, a lack of unity can quickly become problematic.
Digital leaders need to be able to bring together all the people and business units working on digital initiatives. The concept of unity across the digital agenda is universal: The digital leader needs to be able to set strategy but also ensure buy-in across the organization.
Bridge the Talent Gap
The digital talent gap is widely recognized as a critical challenge for companies seeking transformation. PwC’s most recent Digital IQ study found that the lack of properly skilled teams was considered the number one hurdle to achieving expected results from digital technology investments. In another telling finding, the survey revealed that 46 percent of CDOs are external hires.
Bridging the talent gap requires companies to identify the types of skills they need and those they lack, and to create a talent strategy that will ensure that their people can put the digital agenda into practice. This will include some combination of training and hiring, as well as bringing the requisite skills in-house through acquisition. Leaders will also need to be aware of cultural inclinations to keep things the way they’ve always been — a mind-set that can slow adoption of new digital initiatives.
Confront Legacy Structures
The very concept of digital transformation recognizes that a company is starting from an insufficiently strong position. And it has the legacy back-office systems and overall organizational structure to show for it. These holdovers can’t always simply be replaced; digital leaders need to know how to work within these constraints as they move to bring the organization forward.
Find the Right Digital Leader
When hiring a digital leader, companies must consider not just the individual’s background and expertise, but also his or her position within the organization and the governance mechanisms from which he or she will derive the responsibility and authority needed to carry out the mission. Of course, such considerations come into play whenever a large company hires any top executive. The role of the CDO, however, is a relatively new one, and many companies are still trying to figure out what works.
What works won’t be the same at every company or in every industry. And even within a company, the role may need to evolve over time.
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Digital Insurer's CommentsUnify the digital agenda, bridge the talent gap, and confront legacy structures. These three activities describe the challenge of digital transformation in a nutshell. Though digital transformation is at its root a technical exercise, it’s not always a person with a technical background that’s best suited for the job.
Relating—and sometimes standing up—to tenured executives with conflicting interests is not a coldly logical activity. Consensus-building and to an extent politicking are often required. Charisma also plays a role in selling a vision to digital talent. Ultimately it’s about getting someone who believes in the digital vision and will do whatever is required to convert that vision into reality.
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