How CIOs can help board members understand the business value of digital innovation

Credit: Phil Weinzimer

Today's digital marketplace is changing the way companies compete and IT is now at the core of every company’s business strategy. CIOs can provide the board a digital maturity governance model that includes a framework, assessments, quantifiable metrics, maturity grid and a digital transformation roadmap for the four competencies that drive digital innovation success: Digital awareness, technology relevance, business-focused-teams and enterprise digital culture.

You wake up in a panic after dreaming your CEO called and said, “You need to be at tomorrow’s 9:00 a.m. board meeting with a presentation to help the board understand the company's digital strategy and, specifically, how we are measuring success.” While relieved when you realize this scenario was just a dream, you’re also aware that at some point in the near future that won’t be the case—and you’ll need to be prepared.

Today's digital marketplace is changing the way companies compete, meaning information technology is now at the core of every company’s business strategy. As a board member, you and your colleagues are trying to understand how to identify and measure critical digital competencies, given your role is to assess overall direction and ensure the company executes on its business strategy and achieves its financial goals. As a CIO, you can help the board in these efforts by providing it with a digital maturity governance model and associated metrics for the four competencies that drive digital innovation success: Digital Awareness, Technology Relevance, Business-Focused-Teams, and an Enterprise Digital Culture (vision, leadership, and communication) (see Figure 1).   

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                           Figure 1. Competencies that Drive Digital Success

Following is a description for each competency, a set of best-practice categories, real-world examples, an assessment tool to help you measure your company’s digital innovation maturity, and a transformation road map.

The framework, methodology, and assessments described in this article have been developed through my research and consulting work. I'd be happy to share these materials to help you succeed in your digital transformation. You can contact me at

Digital enterprise success framework

Succeeding at digital innovation requires your enterprise to excel in each of the following competencies:

  • Create enterprise digital awareness
  • Ensure technology relevance
  • Focus teams on business value
  • Embrace digital culture across the enterprise

Frameworks are great, but we all know you can't manage what you can't measure. Figure 2 is an assessment that measures enterprise maturity for each of the competencies against a set of best practices. You plot your assessment results on a maturity grid that reflects the business value improvement and digital footprint for each competency.

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                            Figure 2. Digital Competency Maturity Grid and Assessment

Create enterprise digital culture

Digital innovation as a strategy is relatively new to the business landscape. Board members, executive management, directors, and business teams need to improve their understanding its business impact, the use of technology innovations, and building a knowledge base to create an enterprise digital awareness.

Business Impact: A study by Accenture and Oxford Economics predicted that digital technologies will add $1.36 trillion to the U.S. economy by 2020.

Technology Innovations: ANZ hired four technology thought leaders to advise its board on external perspectives and provide specialist insights and trusted advice, helping the company properly consider digital opportunities and challenges.

Knowledge Base: Babson, UCLA, and the University of Cambridge have all developed knowledge bases to improve research on digital, preserve intellectual capital, and improve collaboration across industries.

Ensure technology relevance

Technology relevance ensures that the company leverages technology strategically to create customer value, improve margin, and enhance shareholder wealth. To accomplish this, companies need to leverage partnerships, out-of-the-box thinking, and benchmarking.

Partnerships: Johnson & Johnson forms strategic partnerships to advance research on diseases such as Alzheimer's and neuropsychiatric disorders, and develop new consumer products.

Out-of-the-Box Thinking: Disney introduced the Magic Band to enable guests to reserve ride times, access hotel rooms, and pay for food, among a host of other activities. Did the idea work? It sure did. Kids, parents, and others love them, and Disney experienced a 20% revenue growth in 2015. Such innovation was born out of the challenge to root out all the friction within the Disney experience.

Digital Benchmarking: The McKinsey Global Institute (MGI) created a digital utilization index to determine where and how companies build digital assets, expand digital usage, and create digital workforces.

Focus teams on business value

Every company wants its staff to focus on projects that drive business value. However, to accomplish this goal, teams must be process-centric, identify value opportunities across the value chain, and incorporate outside-inside thinking. My book, The Strategic CIO: Changing the Dynamics of the Business Enterprise, provides more detail on the following examples.

Process-centric: When Filippo Passerini was CIO of Procter & Gamble, one of his major goals was to help managers make better business decisions. To accomplish this, he created a digitize, visualize, and simulate strategy that changed the model of how decisions are made within P&G.

 [Related: “Filippo Passerini stands out as a stellar example of the strategic CIO”]

Value Opportunities: David Finnegan, former CIO of Build-A-Bear Workshop, recognized that the brains of kids today are wired differently compared with those of kids in previous generations. As such, he realized digital technology needed to supplement the physical experience of creating stuffed animals and led the charge in changing the business model of how Build-A-Bear interacts with its customers.

Outside-Inside Thinking: FedEx CIO Rob Carter developed a four-prong strategy that incorporates customer feedback, strategic partners, quality-driven management, and digital technologies to fulfill the company’s Purple Promise: a commitment by every employee to make every FedEx experience outstanding.

Embrace digital culture across the enterprise

A major challenge when changing organizational culture is to provide a process of continuous improvement. Best practices include a compelling vision, clear communication, and effective training.

Vision: An MIT Sloan study states, “Companies that succeed tend to have leaders who share their vision and define a road map, create cross-organizational authority for adoption, and reward employees for working toward it.”

Communication: PWC identified six key levers of change that can be used as part of a communication process to help companies develop the kind of corporate culture that delivers the multichannel experience.

Training: Cisco developed on-demand courses to help companies realize the benefits of integrating digital (web, social media, mobile, and video capabilities) into their business strategies.

[Related: “How CIOs can drive digital innovation through collaboration”]


Digital is a critical component of any enterprise business strategy and requires CIOs to be more involved in developing, implementing, and measuring digital success. Figure 3 is a digital strategic maturity transformation road map you can use to assess your progress. 

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                     Figure 3. A Road Map for Digital Strategic Maturity Transformation

My hope is that you begin to develop a digital maturity competency governance model to help your board understand how your company is incorporating digital as a strategy and, more important, how to measure its success. If you do so, you'll sleep much better!

I look forward to your comments.

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