Driving digital transformation, an uphill battle

Driving Digital Transformation: New Skills for Leaders, New Role for the CIO,the Harvard Business Review report that I mentioned last week covers ground that is now all too familiar: the need for digital leadership in the enterprise, for the very highest levels of an organisation its board and CEO to understand the impacts and potential of digital disruption and steer the enterprise accordingly.

HBR surveyed 436 'business leaders' (their precise roles were not identified) and found "strong digital leadership matters … companies that rate highly in both digital leadership and management have better business results than their peers, with stronger revenue growth and greater profit margin."

Strong digital leadership generally equates with having the CIO, or similar, at a very high level in the organisation, possibly on the board. Writing in the foreword to the HBR report, Jim Whitehurst, president and CEO of the report's sponsor, Red Hat, said: "When companies encourage digital leadership within their organisation, they see higher profit margins and revenue growth. They also typically have something else in commonthey have a CIO in a highly strategic, visible and collaborative position within the company."

These views were reinforced by a McKinsey & Co report Digital Banking in Asia. It found that the winning banks were "those that positioned IT more strategically ... with more CIOs having meaningful boardroom presence."

The HBR report urges CIOs to "be proactive about educating and empowering business leaders with quality digital learning support," but perhaps the urging needs to be directed more at CEOs and boards to recognise the key role that IT will play in their futures and invite/elevate their CIO to a new high level role in the organisation.

The report says: "CEOs 'get' that digital is important, but most have not yet built or effectively communicated a digital vision and strategy to the rest of the organisation. … Company leaders must do more to ensure that the entire organisation moves together into the digital age. This starts with a well-formulated digital vision and strategy and then moves into management— putting in place the people, processes and technology to realise that vision."

It says "CIOs have a central role to play hereand business leaders want their help to better understand digital trends." Alas, this is far from a universal truth. The enterprise scrap-heap is full of companies that failed to accept or anticipate the impact of digital disruption on their businesses:53 percent of the companies that made up the Fortune 500 list in 2000 are no longer on it.

Changing the direction of a large enterprise can be a very difficult task, and perhaps direct and dire warnings of the dangers of digital disruption are not the way to go, a more subtle approach may prove more effective.

Which brings me back the conclusion I came to last week after reviewing CIOs' top ten favourite HBR reports: that CIOs' top priorities are: "How do I get the message of transformation across to the business, and how do I lead that transformation?" and "What are the personal skills I need and how should I act so as to manage transformation?"

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