Study: Most CEOs lack vision, leadership on new computer tech
They don't guide their companies towards transformative uses of digital technology, according to a study from MIT and Capgemini
Tue, October 08, 2013
IDG News Service (Miami Bureau) — A majority of CEOs are failing to steer their companies toward effective use of new computer technologies, which precludes their organizations from making major business improvements.
That's the conclusion of a new study released Tuesday by the MIT Sloan Management Review and Capgemini Consulting titled "Embracing Digital Technology: A New Strategic Imperative."
The study was based on a survey of more than 1,500 executives and managers worldwide and its authors sought to examine the concept of "digital transformation," which they define as the use of new digital technologies to trigger significant improvements.
Digital transformation is a required goal for companies and involves the revamping of business processes through the use of social media, mobile, analytics and embedded devices, according to the report.
"But the CEO and senior leadership must develop a vision to articulate to the staff, create a roadmap and commit to it, and then rally the organization with measurable goals and incentives to reach them," reads the study.
The authors -- Michael Fitzgerald, Nina Kruschwitz, Didier Bonnet and Michael Welch -- state that digital transformation "needs to come from the top," and they recommend appointing an executive or committee to lead the efforts.
"Companies should take small steps, via pilots and skunkworks, and invest in the ones that work," they wrote. Company leaders need to adjust the digital transformation road map, vision and strategy based on the results of these small, initial projects, according to the authors.
How important is the leadership of the CEO? It's crucial, according to the study. In companies where CEOs have outlined and communicated their vision for digital transformation, almost 95 percent of employees are on board with the plan. Unfortunately, only 36 percent of the CEOs have done this.
Having a strategic view of technology has always been a responsibility of CEOs, but the stakes in this respect are now higher than five years ago, Welch said in an interview.
CEOs must evaluate how their companies stack up against competitors in the use of new digital technologies and then craft a strategy based on a clear vision, specific goals and concrete metrics. That way they'll be able to decide where they should and should not invest.
A good starting point is for the CEO and their executive team to identify the company's strongest assets and ask themselves how they can be further enhanced and strengthened through digital tools.
A pitfall to avoid is the seductive power of shiny digital services and wares that prompt many companies to pursue technology for its own sake. "Technology can be a siren song. Without a focused approach, it's easy to be led astray," said Welch, a visiting scientist at MIT's Center for Digital Business and a Capgemini managing consultant.