Digital transformation isn’t an activity, it’s a state of mind.
As enterprises seek to remake themselves through digital transformation, a growing theme that differentiates the digital wheat from the chaff is that the frontrunners don’t just “do” digital. They aredigital—it’s part of their organizational DNA. As such, digital is not just a singular project. Every project is a digital project because it should be a fundamental driver for how business is done.
“Digital needs to be really inherent in the business—that’s what being digital is about. It’s not a one-off project. It does not stop,” says Jenny Young, a managing partner in consumer markets for consulting giant EY. “We need to get it very deeply embedded in terms of our people, capability, and the way that we run and think about our businesses.”
This mode of thinking has not taken hold at the majority of enterprises today, as many still see digital as an adjunct to their business strategy.
“[They] see it as an additional thing: an additional channel, an additional go-to-market model, an additional technology,” says Wim van Hennekeler, head of consulting for Cognizant Benelux. “In reality, it’s often so completely disruptive it will completely change their entire underlying business model and requires new capabilities, new organizational structures.”
In fact, some of the leading thinkers in the digital transformation space say that if organizations are going to overcome this myopic thinking, they need to entirely scrap the idea of developing a “digital strategy.”
“You don’t need a digital strategy,” said George Westerman, principal research scientist with the MIT Initiative on the Digital Economy, in a thought-provoking article for MIT Sloan Management Review earlier this year. “You need a better strategy, enabled by digital.”
“You don’t need a digital strategy. You need a better strategy, enabled by digital.”
As he explained, digital transformations are less about the digital and more about the transformation.
Young’s colleague at EY, Andy Gillard, explains that the change must be continuous, deep, and broad across the organization.
“You’re innovating with true purpose rather than just ticking a box because you feel like you need to innovate,” says Gillard, who’s automation lead for financial services at EY in the Asia-Pacific region. He explains this purpose frequently stems from being “absolutely obsessed about the customer. That is really, really critical in terms of your ultimate success.”
Ultimately, this kind of intrinsic metamorphosis is going to require not just buy-in but true leadership from the very top. This is why we’re starting to hear rumblings that in the not-so-distant future, the very best digital businesses will be those with CEOs who’ve co-opted a lot of responsibilities that were going to be earmarked for the nascent chief digital officer (CDO) role. In the past, the debate used to be over whether a CDO or a CIO should lead digital transformation. But the real contest will more likely be between the CDO and CEO, according to Steven Rosenbaum, senior adviser for Oaklins DeSilva+Phillips, who pontificated on the topic in an aptly named piece for MediaPost, “The Coming CDO Vs. CEO Showdown.”
“After all, if you’re a consumer packaged goods company, a services company—or, frankly, any business that needs to connect with customers—and you’re recruiting for a new CEO, would you hire a person who says, ‘Well, I’m not a digital person, but I’m going to hire a kickass CDO, and we’ll get it all sorted out,'” he wrote. “Probably not.”