Who leads digital transformation?
‘Transformative change starts with an ambitious vision set by the chief executive’
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.