By James Moffat, Founder + Principal Strategist at Organic
Digital transformation is changing the way we operate and deliver value to customers. The pressure is on for the c-suite particularly if their efforts regarding digital transformation are failing. Digital transformation is putting strain on these relationships;however, there are ways to improve the collaboration process, which will lead to a positive outcome for your business.
Straining relationships between c-suite decision makers
Transformation exposes the siloed mentality of the organisation because it requires cross vertical collaboration –digital is not a trend in one department or area – it exposes the disconnect between how the corporation organises itself officially and the informal networks that get things done.
Accepted working practices, corporate culture and organisational structure are not designed to transform anything –especially not digitally – they are designed to maintain, optimise and leverage a profitable status quo.
In practice this means all the levers and mechanisms you would traditionally use fail to have the desired effect. It is not clear whose budget is affected, who is in charge, who is accountable, what metrics to measure, what activity will affect change in those metrics, and where this activity sits in relation to business as usual (BAU).
Collaboration is a great buzzword, but it requires a different modus operandi to the traditional c-suite model. Don’t blame the c-suite. The corporate is not designed to transform, but to maintain and defend profitable, quasi-monopolistic, positions in the market.
Digital transformation causing pressure
Fundamentally misunderstanding what digital transformation is, is the problem. When it is framed as an IT project or technology challenge, becoming about RFPs and identifying a vendor, you set yourself up to fail. The way our society works is being fundamentally rewired. As a species, we are reorganizing. For a corporation, simply moving to the cloud just isn’t going to cut it in the long-term.
As a technology challenge, it is usually led by the chief information officer (CIO). The CIO requires greater support from other c-suite members. Expertise in IT and technology is great, and the CIO normally has a uniquely rich insight into the challenge – but you need to be able to deal with the human factor as well: culture, leadership and people skills.
There are plenty of lessons to be learned from the past. Organisations are littered with great pieces of technology, with low or zero utilisation, because the people within the organisations – the stakeholders– were not taken on a journey of adoption and helped to understand the benefit or impact on them.
But not all sectors are created equal. Digital transformation is more challenging within the financial sector, regulation is tight, and banks are having to maintain their legacy systems whilst meeting consumer expectations, this gives start-ups a benefit as they are starting from scratch and don’t require the same budget. Customer experience is also changing, as mobile banking is set to overtake high street branch visits in the next two years, meaning banks are having to change the way they operate culturally.
The divide between finance and IT
A few of the reasons behind this divide include:
- Most organisations have a long history of expensive technology projects that put strain on the CIO / CFO relationship. Digital transformation can be perceived – wrongly – as yet another one.
- The type of expenditure is broader and more diverse and not understood if judged in the context of traditional software roll outs.
- Setting metrics for success both can agree on is difficult.
- A lack of alignment between IT and Business objectives. In particular in the short and medium term, digital transformation can seem counter-intuitive.
- Effective digital transformation means a hit on short term revenue and capital expenditure. The CFO is increasingly responsible for protecting short and midterm revenues.
- Ultimately digital transformation is not a finite project with a beginning or end. But a process of transformation that needs to be ongoing.
Improving the collaboration and process of digital transformation
Having an agreed and shared measurement framework, like the Agile Index (our tool for organisations undertaking digital transformation) is a must. Everyone needs to work to the same expectations.
Understanding the human aspects of a transformation project and investing in them is also critical. Accept that this is going to be a holistic and far reaching change programme that goes beyond a new IT system. Engage all stakeholders in the organisation and beyond to communicate,manage and ensure effective and smooth transition.
Putting in place a programme covering ways of working, stakeholder engagement, training and reskilling will help smooth the process.
The shifting of boardroom priorities due to digital transformation
There are more c-suite job titles than ever –chief customer officers, digital officers and so on. The balance of who owns budget is also changing. This is a symptom of the forces underlying the need for digital transformation.
For IT, there is a transition from systems building to tool sourcing and governance. As other c-suite members become technology buyers there is a complex change in dynamic. It may be that the days of fixed and predictable, c-suite roles are in the past and the c-suite is more of a dynamic body that changes to meet the need of the customer and the organisaiton that serves them.
The positive effects of digital transformation in the c-suite
I believe it necessitates more collaborative behaviours; it requires good communication. It fails unless you break down silos.If you want it to be successful you need to move away from organisational models established in the 17th and 18th century to one that is more fit for the digitally changing world.
IT lifts the veil on the true nature of how we cooperate, collaborate and get things done as a species. It used to be called water-cooler culture. It exposes the inefficiencies and non-intuitive ways in which we organise in hierarchical, siloed corporations.
Digital transformation is a consumer driven phenomenon –technology allows us to organise our lives in different ways.Instead of sending our auntie a letter in the annual Christmas card, we now have a family WhatsApp group. What we do in our personal life sets our expectations from employers and service providers. If Alexa can tell me the weather, play with my kids and order my shopping, why can she not book my meeting or schedule my travel at work?
Businesses that will be successful in the future will be the ones who embrace digital on both a cultural and organisational level, not just at an IT level. This responsibility doesn’t just sit with one stakeholder in the c-suite, it’s about the whole business collaborating.
In an evolving world the customer directs us, because whilst how and what we do as people will adapt, fundamentally human nature and what drives humans doesn’t change. That is more than just moving to the cloud or a new IT system. Even if the CIO gets this, without wider support, alignment and collaboration with the rest of the c-suite, the pressures of digital transformation may prove to be too much for any organisation.