To answer this question of who should lead the Digital Transformation in a company, we need to first identify the objectives that a company wish to achieve when they embark on the digital transformation journey. Companies embark on digital transformation because they see its benefits and hope to achieve one or more of these objectives:
- leverage on cloud and mobile enabling platforms to reach out to millions or billions of users quickly, e.g. WhatsApp, Instagram
- make use of data and artificial intelligence to deliver customized and hence greater value to customers, thereby increasing sales, e.g. Linkedin jobs portal, Jobstreet, Amazon, Netflix
- exploit digital tools to transform the way the company do business with process innovation and bring about greater efficiency and benefits to customers, e.g Microsoft move from selling software packed in a CD to the Microsoft 360 cloud solutions. Similarly, Adobe also move to a subscription cloud solution model.
If you examine each of the above objectives, you will notice that the central focus is the customer. Companies embark on digital transformation so that greater value can be delivered to customers and this is the key essence needed to help a company survive and sustain in the digital world. Let me quoteMar Benioff of Salesforce:
“Every digital transformation is going to begin and end with the customer, and I can see that in the minds of every CEO I talk to.”
If the objective of embarking on digital transformatio is to bring greater value to the customers and in turn to achieve long term competitive advantage, business growth and sustainability, then in selecting who should lead digital transformation in a company, we know that the key success factor is not having someone with technology background. Let me share with you a real life example:
In early 2015, I had the opportunity to serve a company who is a leader in the book publishing and retailing industry. For two years, the company had embarked on a new e-learning business. They have developed a new digital assessment e-learning product that worked on tablet devices. The company had selected the Head of IT to run the new business because e-learning was very much a technology product and the person with the most technical knowledge was the Head of IT. Developing the product was easy but the business could not grow. I was engaged to help them analyse if the product is a good product. After digging out the raw data from their IT department, I discovered that customers made up to 25 times repeat purchases. It must have been a product liked by customers for such high number of repeat purchases. However, despite being an IT department, there was little mining of the data for marketing purpose. We did some proposals such as recommending the use of subscription business models. However, the Head of IT did not agree to subscription model as they have been very much a retail organisation. In effect, they were like selling books on tablets without leveraging on the power of data and digital marketing. By the fifth year, the company shut down the entire e-learning business.
In fact this is not the first time I see an organisation appointing an IT Head to lead a business. When a new business is very technical, people have the tendency to select technology savvy personnel to lead the new business. Do not misunderstand me. I am not implying that all technology savvy people make poor business leader. In fact some technology savvy people can have good business acumen too. Rather, what I mean is, a background in computer science is not an essential requirement for technology business success.
Who should lead the digital transformation?
Let’s call the leader of Digital Transformation the Chief Digital Officer (CDO). The right candidate CDO should possess the following strengths/ skills/ experience/ background:
- First, the CDO should have a powerful business acumen, with good marketing skills and having the ability to understand/learn technologies. That means he should be able to see things from a user’s perspective, to understand what kind of products and services will really appeal to users, what pain points would his digital transformation help to solve, how to recover the return on investment on the transformation and what resources are involved in the process of digital transformation.
- Second, the CDO should have good leadership and communication skills. Digital Transformation requires the entire company to unite and work towards a brand new path. Being able to articulate clearly the objectives and direction and able to inspire and motivate peopl to pursue the same goal on a path filled with challenges is utmost important.
- Third, the CDO should have an aptitute to want to solve problems. In other words, having operational and management skills to manage and help the people to succeed.
Many recruitment companies and management hire people from competitors or people who has worked in prominent companies. However, if you are looking for a Transformer in Chief, you should not be simply selecting someone from competitors. What you need is not buying competitive knowledge as in the case of recruiting a Sales manager. In this case, what you need is a business leader with marketing and technical know-how.