Digital Leadership in the C-Suite
Digital Leadership Key messages
- Digital technology is driving major changes in the way we work and live. Harnessing digital will be critical to future business success, even survival. In this sense, Leadership and Digital Leadership are becoming one and the same
- But Digital Leadership and IT Leadership are NOT the same. The activities commonly referred to as Digital typically sit well outside the traditional scope of the Chief Information Officer and the Enterprise IT function
- Since many C-suite executive teams are not ready to lead major digital initiatives, in some firms a new role is emerging – the Chief Digital Officer
- There are a wide variety of CDO roles, but real CDOs are full C-suite members, and focus on strategy, profitability and digital business transformation
- Soon, every business will be a digital business and every leader will need to become a digital leader, but in the meantime, having a digital champion will be important in many firms
- Executives who abdicate digital to a CDO/CIO will increasingly be on the path to retirement
- To avoid executive obsolescence, companies must make Digital everyone’s business and increase Digital IQ at all levels of the firm, but particularly in the C-suite
- CIOs need to adopt this new, digital business outlook, or risk marginalization
In August 2014, the LEF report Leadership and Digital Leadership are Becoming One and the Same identified the most important sources of digital leadership advantage and described the many ways in which digital leadership differs significantly from traditional business leadership. It argued that no one has a monopoly on digital leadership, and that four parts of the firm – executives, employees, Enterprise IT and the wider business ecosystem – must all play significant roles.
While each of these four areas is vital, digital dynamics are creating particularly interesting tensions in the C-suite. To date, most of the top table focus has been on digital sales, marketing and customer service. But other functions are rapidly catching up. Already we see digital product development, digital manufacturing, digital supply chain, digital finance and even digital HR. Who should drive these initiatives? Who should be kept far away? Is there a need for a Chief Digital Officer? What is the role of the CIO in all of this? In many large organizations, the answers are not yet clear.
This report is the result of our second phase of digital leadership research conducted late in 2014 and early in 2015 to explore the questions above and in particular the Digital drama now unfolding within the senior ranks of the firm. The objective of this report is simple: to provide CEOs and other members of the C-suite with a set of options, recommendations and actions with which to develop the digital leadership needed at the highest levels of their organizations.
Consequently, this paper focuses squarely on the executive leadership, and therefore also the politics of Digital. It avoids both technical jargon and the many IT tactics and strategies that companies are pursuing or considering. But be assured that our analysis is anchored in a deep, practical understanding of what it is like to lead the digitization of traditional large businesses, as well as newer, greenfield firms. The synergies and tensions between these two very different worlds are driving the need for advanced digital leadership today.
Figure 2 – Some opening thoughts
Software is eating the world
Data is the new oil
Data is the new soil
Everything that can become digital will become digital
The quotes in the figure above are widely known (with the exception of the third, which is included partly for its humorous riposte to the second). If you’re a CIO or a digital native, you may not care for them or may have heard them too many times. But to the rest of us they tell the basic story of our evolution into the digital age. They define a fundamental set of beliefs that even many IT people haven’t fully taken to heart.
- ‘Why Software Is Eating The World’ was the title of a seminal essay by Marc Andreessen, the co-founder of Netscape, which appeared in the Wall Street Journal on 20 August 2011. Although not a household name, Andreessen is a hugely influential figure in Silicon Valley and has been at the forefront of numerous digital developments and investments. In his essay, Andreessen describes how software and algorithms are increasingly acting as not just enablers but the foundation of important new businesses.
- “Data is the new oil,” declared Clive Humby at a marketing conference in 2006. Humby is a British mathematician who, with his wife, Edwina Dunn, founded Dunnhumby, a Big Data company that has done pioneering work with some of the world’s leading retailers to help them better understand customer habits and loyalty.
- No, “Data is the new soil,” replied David McCandless with tongue mostly in cheek, at a TED talk in 2010. McCandless, a data journalist and information designer, suggested replacing Humby’s crude oil /raw data refinery metaphor with one that recognizes data as a “creative, fertile medium” that we can “irrigate … with networks and connectivity.”
- The final quote, “Everything that can become digital will become digital,” anticipated today’s digital revolution way back in 1993 and comes from Benny Landa, a prolific Israeli inventor, entrepreneur and visionary who is often viewed as the father of digital printing.
These four quotes capture the spirit of our times, and the powerful changes now under way. They describe the mindset that digital business leaders must increasingly embrace, but which is still alien to the decision-making of many C-suite executives.