A practical guide for leaders facing the challenge of transforming their organizations through digital technology.
Today’s leaders have been bombarded by a lifetime’s worth of advice about digital transformation. If they’re not sold on the merits of always-on, continuous digital reinvention, they may never be. Most have also heard they need to be personally involved. The big question is how? As a leader, how do you figure out your exact role in digital transformation, and where should you be focusing your limited time and energy to best help your company succeed on its digital journey?
Deloitte recently conducted an in-depth study of leaders’ role in digital transformation. In our first article, we discussed how digital transformation comes in all shapes and sizes, and that savvy executives tailor their leadership efforts accordingly. Their role should focus on setting the transformation ambition and assessing the organization’s readiness—pulling levers related to leadership, structure, and culture to create the conditions and capabilities for change.
Our additional research—which was based on rigorous interviews with 23 global CEOs spanning a broad range of industries and digital ambitions—revealed the critical and nuanced actions leaders should take depending on their organizations’ digital aspirations, the current state of readiness, and the required magnitude of change.
Three Powerful Leadership Truths:
Truth No. 1: Your Role as Leader is Important for Any Digital Ambition— No Matter the Scale
The need for leadership involvement is often greatest when digital ambitions relate to a customer-facing business process or high-priority growth strategy, or when it’s a prerequisite for more ambitious future transformation plans. As we discussed in our earlier research, How the CEO’s leadership in digital transformation can tip the scales toward success, digital ambition exists along a spectrum from digitization to full-scale transformation, and any or all of these levels are relevant based on the enterprise’s digital journey. Enterprises can be working on multiple digitalization or digital transformation levels at once: One business unit may be focused on initiatives further to the left on the spectrum, while another may simultaneously be focused on strategies further to the right.
But not every company is interested in full transformation. Moreover, most digital initiatives aren’t digital transformation, and that’s fine. Many companies need to catch up to the competition, better enable future growth or have other goals for which disruptive innovation isn’t required. For these and other digital ambitions that are less complex and holistic, less involvement typically is required.
However, that doesn’t mean zero involvement. All digital initiatives need at least some amount of engagement from the organization’s leader. The leader needs to maintain leadership of any digital ambition, and when multiple initiatives are occurring at once, the leader’s role in ensuring they map to an overarching strategy becomes even more important. While they might not need to drive day-to-day activities, they do need to influence the route—guiding teams to understand strategic impacts and dependencies. How often the leader intervenes depends very much on the project and its individual nuances, and that is where listening to the delegated leaders can be critical.
Truth No. 2: As the Digital Vision gets More Ambitious, Your Involvement Should Increase
As the transformation vision becomes bolder and more ambitious, a leader might encounter a large gap between the vision and the organization’s readiness to achieve it. If the organization is stuck and doesn’t see the need for transformation, the leader likely will need to set a more active, hands-on role in developing incremental strategy milestones and driving change.
Ambitious digital transformation is often a response to a critical need for change. Common challenges to change—including fear of personal failure and a desire to avoid short-term revenue hits—should be considered but should be outweighed by the clear strategic imperative for transformation.
Truth No. 3: Organizations with High Digital Savvy and Readiness Still Need Leadership to Lead on Strategy, Innovation, and Growth
Organizations with high digital readiness might not need the leader to be deeply involved in day-to-day transformation activities, but there’s still a need for leadership—particularly on strategy. Here, the role involves working with the CSO, CIO, and CTO to identify the next opportunities for innovation, growth, and disruption.
Always be assessing if your business model should change and how digital technology can help enable your broader strategy, whether it’s to enhance your existing business, respond to a competitive threat, maximize an M&A opportunity, disrupt the existing industry or ecosystem, or achieve some other strategic goal. Creating a strong sensing function can help leaders stay on top of this.
For the full guide from Deloitte click here.
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