In a market dominated by transformation agendas and new ways of doing business, the importance of the Chief Digital Officer (CDO) is heightening across Asia.
Taking place within an expanding C-suite of technology decision-makers, the digital strategist is not only an artist, but a connector, driving innovation through a new way of thinking.
According to Abhishek Singh, CDO of Royal Golden Eagle (RGE), what makes up a successful leader are five key attributes.
“Firstly, technology depth,” he explained, when speaking to CIO ASEAN. “Having the ability to rapidly grasp new technologies and figure out what is important for business and what is not.
“Secondly, business acumen. Having the ability to understand the core functions of the organisation’s business so that areas of opportunity can be quickly identified.”
Thirdly, according to Singapore-based Singh, is “lateral thinking”, and the ability to think differently in the business, through coming up with “out of box ideas” to help promote innovation.
Next up, the modern-day CDO must be a communication and consensus builder.
“Provide clear concise communication to help the board of directions, senior leaders, managers, teams and the whole organisation have the same understanding of digital, what it means and what needs to be done,” added the executive, who assumed the role in December 2018.
“And finally, leadership. Having the ability to command everyone to perform towards the same goals but also explain and accept failures as and when they happen without losing steam or enthusiasm.
“Giving everyone a sense of purpose with digital and how it can truly transform our ways of working is crucial.”
Singh speaks with authority on the subject, holding responsibility for the digital transformation of RGE – one of the leading integrated, resource-based industrial groups in Asia Pacific – and affiliate companies.
Housing over 60,000 employees, RGE manages operations in Indonesia, China, Brazil, Spain, Malaysia and Canada, with plans in place to expand and engage newer markets and communities.
The work of RGE – which holds assets of more than US$18 billion – ranges from the upstream, comprising sustainable resource development and harvesting, to downstream, where affiliate companies create value-added products for the global market.
A multi-faced role
For Singh, there are several aspects to a CDO, including assuming the status of trusted digital advisor to the board.
“Everyone in top management is struggling on what digital can do for our business from CEO to CFO to COO,” Singh explained. “And a CDO is critical to ensuring that we have a common definition of digital, a common definition of transformation and everyone is aligned.
“It’s also important to become a trusted team leader. Digital teams consist of very young team members who may not fully understand traditional industries like process manufacturing of pulp, paper, viscose, rayon and palm oil where our conglomerate operates.
“In such circumstances, the CDO is critical to team motivation for optimum performance.”
As an innovation champion within the business, a CDO must also “continuously source” new innovation – both internally and externally that are relevant to the business.
From engaging with established players such as Valmet, General Electric and ABB to startups and mid-size companies, Singh said a CDO must “cast a very wide net” to bring high-value ideas to the organisation.
“Similarly, a CDO must create an innovation culture within his organisation where their team is able to use tools like design thinking and lateral thinking to continuously find new ways of running the business,” he added.
“Also, be a culture hacker. Eventually it’s people who run all businesses and if the mind-set does not change, then there is no way a company can make changes to its business or operating models.
“The need to innovate, using new technology, engaging customers in a different and unique way, ability to accept failure, all these need culture changes and a CDO has to successfully hack his organisation’s culture towards continuous improvement and innovation.”
Within this context, Singh acknowledged that “agility to execution” is a key hallmark of an innovative and efficient digital specialist.
“Most importantly, a CDO must bring extreme agility to execution,” Singh said. “Many a transformation programs fail as management loses interest through years of overpromise and under delivery.
“In my organisation, I consciously don’t allow projects longer than 10 months to be planned and executed in a single program. We must all balance return on investment [ROI] with time to market.”
If a project takes longer than 10 months, then Singh said the ROI must be greater than 3 times over two years to even be considered.
“And I encourage all my staff to think of this in annual appraisal cycles,” he outlined. “If something extends beyond one appraisal cycle, then the staff bonus will accordingly also get pushed out.
“This helps the staff to think in similar time frames with aligned priorities between their personal goals and our organisational priorities.”
Pace of change
In assessing the wider market, Singh said CDOs today are living through one of the most interesting times of human evolution.
“The pace of change is extremely rapid and we are moving slowly from predominantly human workforce to high levels of automation in all aspects of our businesses,” he said. “Artificial intelligence [AI] is still in its infancy but making rapid strides. Most CDOs sit on the cusp of their organisational shift from automated to autonomous.
“And some of us who are making this shift happen will be champions of digital pervasiveness. And those businesses which will become optimally digitised will fundamentally change how their own businesses operate and in turn how their customers and suppliers work with them.”
Singh said the ability to make such fundamental impact to businesses comes once in several decades. For example, pulp and paper is manufactured in a similar way as it was in the 1980-90s.
“Only now we feel we can make some truly fundamental changes to how we operate our paper mills,” he said.
Conversely, CDOs remain challenged by an inability to shift mindset in a way that is accepting of failures. Only through this approach can CDOs, according to Singh, make investments in new technology with confidence.
“My role is continuously changing,” he acknowledged. “I remember five years ago; social media was the big hype for every business and lots of CDOs were hired just to help businesses manage social media.
“Today the same job function is performed by managers and senior managers in several organisations and the scope of a CDO has significantly evolved to experiment with AI and blockchain.
“With edge computing, robotics (including drones) and cloud computing making rapid strides, CDOs are now forced to look at even newer ways to do things.”
Drawing on more than 20 years of experience, Singh cited Internet of Things (IoT), analytics and mobility as the immediate “near-term” disruptors in the market today.
Within manufacturing, such an observation aligns with Industry 4.0 trends, and the move towards autonomous production.
“We are extremely vested in this space,” Singh confirmed. “For long-term disruption, blockchain can fundamentally change the entire supply chain of B2B companies like ours.”
In 2019 and beyond, key priorities for RGE centre around the digitalisation of manufacturing, e-procurement, logistics and plantation. For Singh, mobility and AI represent the “backbone” of all these initiatives.
“Value can be a combination of disruption insurance, new revenue opportunities, customer entrenchment, revenue protection, branding, long-term business sustainability, competitor differentiation, market risk mitigation or cost cuts,” he explained.
“Emerging technologies are fundamentally changing the way we do all aspects of our business. From our ability to source raw material, to producing them, to producing finished products to shipping them to our customers to our customer engagement.
“We are seeing these technologies impact everything we do. And hence the role of digital is critical to all aspects of our business.”
Such investments are changing the way RGE goes to market, driven through the innovative use of sensors, IoT, drones and big data, all within the framework of an Industry 4.0 agenda.
Recent blockchain examples include a traceability palm oil solution, delivered through affiliate business Apical, alongside a ‘Follow Our Fibre’ initiative through fellow affiliate APR.
“We continuously evaluate our previous investments on an annual basis to see if the promised returns are still on track to be delivered. If any course correction is required, we do it on an annual basis,” Singh added. “All our future investments must build on top of the existing investments.
“Rarely do we allow fresh investments which is absolutely disruptive to extracting value from our current investments or legacy infrastructure.”
Singh said the business maintains a “very narrow” ROI window on investments, in a bid to ensure continuous innovation and flexibility.
“We previously allowed three years as the payback duration for investments but as of this year we have reduced it to two years,” he said. “Anything which needs more than two years to become ROI positive has to go through significant scrutiny and is only approved on an exception basis. But not as a norm.”