Your CEO has been running your company for 10 years and has spent 30 years in the industry. She is visionary and flexible and has pivoted the business during changing markets. She has evolved the culture appropriately and has consistently outpaced the competition. She knows the business and how to grow it. Until now.
With digital technologies changing markets, customer behavior, product development, workforce behaviors – and pretty much everything else – your company’s business model is on the verge of tremendous change. The position that your company has comfortably occupied in your customer’s value chain will not hold.
If your CEO does not recognize the historic magnitude of our shift from the industrial to the digital era, she will find herself, even just five years from now, with decreased customer engagement, revenues, talent, and market share.
Since you like your CEO, and you want to see her and your company thrive in the digital era, you will need to educate her on the change that is afoot and the new perspective she needs to adopt.
Here, IT executives share their advice for CEOs whose companies are on the brink of transformation.
Don’t underestimate the magnitude of the change
Just as the industrial economy was wildly different from the agrarian, the digital economy is a radical departure from the way we’ve done business for the last 100 years. We can no longer rely on assumptions about processes, products, and customer behavior.
Drew Brown, CIO at Union Bank and Trust, says it well: “Don’t underwhelm overwhelming problems. You’re about to rock some serious apple carts, and people’s careers will be impacted. Get as much buy-in as you can every step of the way, and keep re-earning it. And plan for your business to be different by the time you come out the other end: just taking what you have and making it ‘digital’ is a guaranteed failure.”
Digital is about culture, not technology
To be clear, technology is the primary driver of all of this change. Without advances in artificial intelligence, machine learning, big data, and the internet of things, we would not be hopping into Ubers, accessing account information by voice, and enjoying frictionless engagement with our favorite services. But the biggest hurdle to all of this change that technology innovation has wrought is culture. Culture is hard wired into the very foundations of your company and requires a purposeful and continuous change management effort.
As Rajesh Hassija, Chief Digital Officer of Infosenseglobal, puts it, “It all starts with cultural change. Focus on the attitudes and behaviors of your employees and then enhance existing business processes. If you can’t get a paradigm shift in culture and process, don’t waste time looking at digital technologies. An investment in digital technologies will only hide the problem for some time until it reveals itself again.”
If you don’t have the data, don’t bother
If each of your business units has a different set of customer information, and no one can agree on how to categorize your product lines, don’t spend your money on artificial intelligence. Master data management is political, and it is difficult to establish, but it is the foundation of your company’s growth. Resist your leaders’ pleas for better reporting until you give them the mandate to clean up the data and until you know exactly what data you need and why.
As Mark McGovern, SVP of Strategic Enterprise Architecture at Citi says, “It all comes down to the basics, including data normalization and increasing the quality of the underlying data. Without that, AI and ML will yield lackluster results.”
Pick the right leader
Who should lead your digital transformation? Your CIO, Chief Digital Officer, the president of your new “digital” business? As you think this through, remember that you do not need a digital strategy, you need a business strategy that is defined, in large part, by the advent of digital technologies. Once you understand that your digital strategy is a business strategy, you can pick the right leader and follow the advice of Gary Scholten, CIO and Chief Digital Officer at Principal Financial Group: “Assign someone with significant digital experience to lead enterprise business strategy and make her or him accountable to drive digital transformation within your business strategy.”
Digital is a capability that belongs to everyone
Sure, your CIO is responsible for selecting your new AI vendor, and the IT team is designing your big data architecture, but IT’s leadership in digital technologies does not let your other functional and business unit leaders off the hook. Digital is not a set of technologies, or a department, or a new P&L. Digital is a capability that – just like innovation, cost management, or teamwork – should be a core part of everyone’s job.
“Do not consider digital transformation a separate or standalone strategy,” says Scott Hicar, VP of Business Process Improvement and CIO of Benchmark Electronics. “Digital is pervasive and ubiquitous to your growth, operating, and personnel strategies. It is an overlay to every strategy. Unless every executive owns accountability for digital thinking, then ‘digital’ risks being isolated in the enterprise.”
CEOs can be the victims of their own success. They are often so good at what they do that they rely on legacy strategies that no longer work for them in the digital age. Just like their company’s culture, they are caught in a legacy mindset that is starting to serve them poorly. And their own advisors, the board of directors, is caught in a legacy mindset as well.
Do your CEO a favor: Show her where the new competition is coming from, give her information about changing customer behaviors, and warn her that today’s college grads demand an entirely new working environment. Be relentless in your efforts to shift her perspective and be rewarded with all of the opportunities of an adaptable and thriving company.