Should that outside hotshot lead your digital transformation work – or an insider who knows more about the culture and customers? Ask these questions to decide this contentious issue.
In a recent HBR.org article, two INSEAD management professors argued against putting digital experts in charge of digital transformation. A hotshot fresh off a stint at Amazon or Google might seem the ideal choice, they wrote, but a business insider may be better suited to oversee the significant organizational change required in the typical enterprise setting.
There is no one right answer to the question of who should lead a digital initiative. “It’s important to highlight that digital transformation can take multiple forms with varying degrees of transparency to the customer or end user,” says Brian Caplan, director with management consultancy Pace Harmon.
The organization may be extending existing capabilities to mobile platforms. It may be pursuing game-changing capabilities like IoT-based process innovation. The company may want to build new digital products and services – or entirely new business models. The project could simply involve changes to underlying applications or infrastructure in pursuit of a cloud strategy.
As we’ve noted recently, the very term “digital transformation” means different things to different people – to the point of making some leaders cringe. It’s important to define your own meaning and vision and communicate that clearly and repeatedly.
How to examine a leader’s fit for your digital transformation
The leadership question doesn’t just come up at the start of digital transformation work. For example, a stall in your team’s digital transformation efforts, or a new expansion project, may prompt pressure to reevaluate who’s leading. Here are eight key questions to ask to help determine the best choice to lead a digital transformation initiative:
1. How well does the person understand the current business strategy?
Ask this first, because it’s absolutely fundamental. “Since there is no universal set of right answers for digital, it is important to understand what the business is trying to achieve,” says Cecilia Edwards, partner at management consultancy and research firm Everest Group. “This will reduce the likelihood of implementing initiatives that have no or the wrong business impact.”
It’s also important that the person be tech savvy enough to translate between business needs and technology solutions. “While the leader doesn’t need to implement, there will be a team of technologists that the leader will engage with,” Edwards says. “He or she will have the responsibility to ensure the technology solutions proposed align with the business objectives and customer perspectives identified.”
2. Will this person be trusted?
“In addition to understanding the organization and culture, someone with credibility in the organization is a big help, especially when it comes to ‘selling’ the digital vision to rank-and-file employees,” says Holly Lyke-Ho-Gland, Principal Research Lead, Process and Performance Management Research at APQC.
“If the leader is from outside, it helps to pair them with an organizational insider with a good reputation.” If business leaders won’t work with the transformation leader, the effort is likely doomed, Edwards says.
3. Does the person know the customer?
Many digital efforts focus on customer experience, both internal and external. “Being able to view things from the customer’s perspective and understanding their specific journey with the company ensures the transformation has enough of a positive impact and is aligned with customer needs and expectations,” says Edwards of Everest Group.
4. What is the person’s appetite for risk?
“Rather than a digital strategist, organizations should look for leaders that are flexible risk takers, who understand that digital will require a certain amount of failures and experiments to get projects right,” Lyke-Ho-Gland says.
5. Has the person ever launched a disruptive initiative in the company?
Shaking up the status quo challenges even experienced leaders. “Most digital transformations require changes to some elements of the business model,” says Edwards of Everest Group. “Knowing that the model was responsible for past success, one can expect some organizational resistance to change. Having a leader who is experienced in handling this resistance is valuable.”
6. Does the person have clarity of vision?
As we noted earlier, digital transformation can be confusing to people on the front lines of the organization. “The right person should have a clear point of view on what digital transformation is, and what it is not,” says Ankur Laroia, Managing Director of BDO’s Houston office and leader of its Digital Transformation Services practice. They should be able to explain the reasons behind it, the business strategies it supports, and the organizational changes required.
7. Can this person work in an agile manner?
Things change quickly in digital transformation, and leaders have to keep up. “Falling in love with last week’s solution could lead to failure. Success is keeping an eye out for changing business needs, customer perspectives and technology and developing plans quickly on how to respond,” Edwards says.
8. Does the person play well with others?
Digital transformation is a team sport, so collaboration is key. “This person will not have the authority to make everything happen,” says Edwards. “He or she must work with the other leaders in the organization.” The leader will also need to be able to synthesize input from multiple sources. “A good digital transformation leader will be able to listen to multiple perspectives and not make trade-offs to please everyone that will invariably lead to failure,” Edwards says. “Instead, the leader will work to understand the implications of the perspectives and ensure that decision remain aligned with the achievement of business outcomes.”
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