Author: Steve Bates
The 2019 Harvey Nash/KPMG CIO Survey, the largest information technology (IT) leadership survey in the world, highlighted a new model of digital leadership. Digital leaders, the three in ten organizations that are “very or extremely effective at using digital technology to advance their business strategy,” outperform their peers on a whole host of factors.
Digital leaders distinguish themselves as being more outward-looking, aligning the front, middle, and back office using technology as a means of breaking into new markets, engaging with customers, and gaining market share. They also tend to have different operating models that reimagine the nature of work, put technology in the hands of value creators, and encourage the business-led aspects of technology delivery in collaboration with IT.
The success of digital leaders has not come through “pedaling harder” in their traditional IT function; in fact, the concept of a traditional IT department is anathema to many organizations. These organizations do not mistake incrementalism for transformation and are recasting IT in entirely new ways to deliver significantly more impact to both the top and bottom lines. Below, we look in more detail at the critical ways that digital leaders are more capable than their peers:
Digital leaders view IT success through the lens of business performance; they drive real top and bottom line benefit. That fact is evidenced in profitability last year (50 percent vs. 37 percent) and revenue growth in the last year (55 percent vs. 43 percent) One of the key ways of achieving these results is shifting toward business-led IT product management teams that own full-stack responsibility for the budget, resources, and architecture to deliver a specific customer experience.
- Increasing operational efficiency
Digital leaders are more than twice as likely to maximize the value of the data they hold. They do this by hunting, harvesting, and curating data that can be used to teach machine-learning models, advance artificial intelligence adoption, and monetize new assets. They are also more successful at implementing new technologies end-to-end across functions and geographies (55 percent vs. 17 percent). Leading companies are obsessed with continuously improving the customer/employee experience and actively use data from a broad network of sensory sources to strip away friction and inefficiencies across the value chain.
With a relentless focus on speed and agility, digital leaders move quickly and fail fast, always learning along the way. They are almost 50 percent more likely to be scaling up or stopping experiments when they reach their conclusion and over three times as likely to be employing methodologies such as Agile and DevOps that speed up project delivery. The digital leaders that we speak to often depict “failure” as a success—a very different attitude to large-scale project failures reported in the past. Digital leaders realize that the best ideas often come from necessity and the greatest improvements arise from failing correctly.
- Letting go of the fallacy of control
Capturing the potential of digital depends on cultivating talent—both within technology functions and the business. Digital leaders are swapping control for influence and investing time in business relationships and advocating for greater technical skill across the enterprise. They are three times more likely to collaborate strongly with business leaders, and three times more likely to be investing time in upskilling non-IT people in IT skills; through partnering across the C-suite, they take a 360-degree view of technology skills across an ecosystem of talent.
- Cultivating customer trust
To drive transformation in today’s hyper complex environment, trust and security become more important than ever. Digital leaders are better at building customer trust through the service delivered to customers and end users (60 percent vs. 28 percent). And they are twice as good at identifying and managing the key security and privacy issues across technology development and operations. These leaders have shifted traditionally siloed assurance functions like cyber, internal audit, regulatory, and risk management from the end of the value chain to the beginning, embedding critical skills in each step of the technology lifecycle.
Digital leadership starts from the top
There is no longer business strategy and IT strategy. There is just strategy with technology driving it. Technology touches every part of an organization and the priorities list of a technology leader is as long as it is varied. But what distinguishes digital leaders, our research tells us, is their strong cultural focus on creating visible value for their organization, strongly supported by the board.
Digital leadership doesn’t just spontaneously burst into existence; many factors need to align, and it starts from the very top. The CIO Survey shows that digital leader organizations are much more likely to have the technology leader as a member of the top team, where they can influence and be influenced by their executive peers. It also helps that digital leaders are more likely to think their sector is undergoing transformation, and as a result investing in new products, services, or business models. This belief gives important momentum, and—some may say—also a little positive paranoia, to driving change.
To read the full findings from the CIO Survey 2019 report and understand how digital leaders are outpacing their competitors in delivering real business results, please click here.