In the last year or so, a lot has been written on the subject of digital transformation champions. Strong cases have been made in favor of several members of the executive suite to lead digital transformation in their companies: CMO, CIO, CDO and CEO.
Why is that important?
In today’s digital economy, successful digital transformation might be what separates business success from business failure.
According to the 2016 report on digital transformation from Altimeter, digital transformation efforts lead to an increased market share for 41% of surveyed companies, to revenue increase for 30% and to increased customer engagement for 37%.
Digital transformation is a strategic investment, with IDC forecasting $1.2 trillion in spending worldwide on digital transformation technologies in 2017. This is 17.8% more than in 2016 and IDC expects this trend to continue through 2020.
Should the CMO always own your digital transformation?
Arguments for the CMO being the natural digital transformation leader have been convincingly stated in a number of publishings, such as this post, for example.
Indeed, marketers faced digital transformation earlier than other executives in their own fields, which completely disrupted their profession.
Moreover, digital transformation in companies often starts with customer experience where marketers are the natural fit.
According to the Altimeter survey of companies, CMOs do own digital transformation in practice (34%, which is more than all other C-level executives or even the CEO (27%).
On the minus side, if marketing might be best suited to map a customer journey and digital transformation around customer experience, it does not appear to be a natural fit for other issues of digital transformation – employee experience, for example.
Indeed, while often leading digital workplace projects, marketers tend to focus more on the news communications and messaging than on the employee experience as a whole.
Should the CIO step up and take its natural responsability?
The CIO appears to be the natural candidate to lead digital transformation. Indeed, the term digital transformation first originated in the IT field, as a response to outdated systems.
However and surprisingly, only 19% of respondents to the Altimeter survey had CIOs as digital transformation leaders in practice.
This might change again, however, as companies look for a unified digital experience around integrated platforms.
It is true that digital transformation today is more about people and their experiences than about technology, be it the customer or the employee.
However, business owners’ sense of innovation naturally leads to digital transformation silos. Finding a link between those silos might still require CIOs to step up and emerge as leaders.
A specific leader? – the CDO, CXO or CiO?
Several specialized C-level executives can be mentioned as digital transformation leaders – the CDO (chief digital officer), the CIO (chief innovation officer), and the CXO (customer experience officer).
It appears these titles were created for the purpose of having someone own the digital transformation across all business units and functions of the company. Having someone fully own a project is usually the right thing to do to succeed.
In this particular case, however, it appears that digital transformation becomes isolated into a silo as opposed to permeating the whole company.
Indeed, to succeed in the endeavor of transforming the company, the leader should possess a rare blend of skills, tremendous energy, a budget and full support from all functions.
If any of those conditions is not met, the executive becomes a facilitator rather than the true owner.
HR, the notable absentee?
While digital transformation might have gained momentum in the CMO’s area of expertise – the customer experience – other factors come into play today.
According to the Altimeter report, the top three digital transformation initiatives today focus on accelerating innovation (81%), modernizing IT infrastructure (80%) and improving operational agility (79%).
In other words, digital transformation is used to get an edge on competition by empowering the workforce.
The new war for talents is played in the digital space, with employee experience driving digital transformation. It would be natural for the HR to lead the digital transformation effort and the internal changes it implies.
It appears that several C-level functions have skills and backgrounds that position them best to drive digital transformation across the entire company. However, it is also clear that none have all the skills or the power required.
Should the CEO lead the digital transformation effort?
Digital transformation is such a complex endeavour to execute on the company scale. It involves so many business processes and business functions, that the CEO (helped by the whole executive suite) is viewed by some as the natural and only possible leader of such a change.
Of course, introducing digital transformation in the core of your company strategy, mapping your priorities to your company goals, drafting a clear multi-annual implementation plan and supporting its execution via the C-suite appears just the way to go.
Somehow, ambitious changes are often viewed as the CEO’s prerogative. On the downside, however, changes in the company’s culture cannot be imposed from above.
Do you need one digital transformation leader?
This thought provoking article actually argues that what you truly need for a successful digital transformation are change agents and not so much a C-level sponsor.
In our practice, we see digital transformation from all angles, be it customer experience, employee experience or systems modernization.
In all cases however, companies who introduce quickly a solution and start their onboarding and digitisation fare better than those who start with a year-long digital project.
Indeed, once the solution meets the users and inspires change, it can be improved in an agile way through a continuous feedback loop.
As with many other over-ambitious projects, the agile approach might actually be the only way to true and lasting transformation.
Instead of imposing digital transformation as a strategic top-down initiative, why not drive change bottom-up and step by step?