Information for Business from Lenovo
Think Space
Contributor: Andrew Birmingham
Who owns digital?

It's getting very crowded around the leadership table. The last decade has seen calls for a plethora of new executive roles, all with a new buzzword attached.

Whether it's the chief customer officer, chief digital officer or any one of a dozen new CXO suggestions, these new positions often share two common characteristics.

Firstly, the roles are often promoted by vested interests in industries – usually the IT industry – that benefit from seeing their internal advocates elevated. And secondly, the calls are often in response to the change wrought by digital disruption upon incumbent industry participants.

Shifting budgets and shifting roles

Take marketing as an example. Gartner's prediction a few years ago that the CMO would spend more on IT than the CIO by 2017 may or may not prove correct – the reality is that budgets have been shifting out of the glass house and into lines of business for decades.

However, that prediction spawned a whole sub-sector of advice to marketing leaders who suddenly saw themselves thrust into the role of digital saviour – largely as a function of digital having emerged from the early days of website development and online advertising.

Step back though and take a deep breath. While marketing has a strong contribution to make to the digital story, particularly regarding customer advocacy, it's unrealistic to expect the head of the ‘colouring-in department’ (that's how they describe themselves, only half in jest) to be choosing ERP systems or financially reengineering capex budgets.

Meanwhile, where marketing and IT clashed over budgets or strategy, there was often a temptation to create chief digital officers. There are some very talented CDOs out there, but it's hard to escape the conclusion that this move is often a structural solution to a deeply embedded cultural problem.

The better digital leaders recognise this. For instance, Channel Ten's CDO Rebekah Horne pushed digital staff and capabilities back into the business and stripped back her own division to a small core. Paul Shelter, CEO of the federal government’s new Digital Transformation Office, has a similar philosophy.

Both recognise that the last thing an organisation needs is another empire and, more importantly, that successful transformation requires management teams to integrate digital into business as usual.

The CEO is still in control

It's becoming increasingly clear that the buck ultimately stops where it always stops: with the CEO.

Given that digital technologies such as mobile, security, cloud, the Internet of Things, analytics and social platforms touch almost every element of the organisation, it's clear that digital is everybody's job, and the only person in the organisation with the authority to butt heads is the person sitting at the head of the table.

That message has been gathering steam for several years now. Last year, PwC's Global CEO Survey overwhelmingly found that corporate leaders recognised technology as being the biggest driver of transformation.

Australian companies were among the most enthusiastic on this point, with 91 per cent saying technology will be one of the biggest drivers of organisational change.

Australian managers need to embrace disruption

So how do we reconcile that finding with results from another study by Frost and Sullivan that found Australia's managers are the least engaged with the risk of digital disruption? That research revealed that a majority of Australian managers simply refused to accept that rapid change is underway in their industry (even as they went rent-seeking to Canberra to buttress their profits from the threats of online merchants). Their views were the most complacent in the world.

A Gartner study conducted roughly at the same time seems to offer an answer. Local CEOs simply don't want to tackle the subject and instead regard digital as just another IT project.

That idea is anathema to advisors like McKinsey & Company. In its seven-point guide to highly effective digital enterprises, the management consultants say: “The leaders of incumbent companies must aggressively challenge the status quo, rather than accepting historical norms. Look at how everything is done, including the products and services you offer and the market segments you address, and ask “Why?”’

Get buy-in from the board

Finally, while the leader ultimately has to make the call, it's worth remembering who hires and fires the boss. Australian CEOs are often poorly served by their own boards when it comes to digital transformation, largely because those boards themselves are ill-equipped to cope.

Roger Sharp, a non-executive director of Webjet and chairman of Asia Pacific Digital, took it upon himself to examine the technology experience of the directors of the top 80 boards in Australia, New Zealand, Singapore and Hong Kong.

Across this set of 800 directors of Asia-Pacific's biggest companies, only 10 per cent had what might be considered any technology grounding at all. And Sharp's threshold was low – you only needed the equivalent of a one-year TAFE course to score a pass.

In fact, the outlook was even worse. When he removed the few technology and telco companies on the list, which often have tech-heavy boards, the number of directors with a technological grounding dropped to less than 5 per cent.

Digital is everyone's job, but sadly very few people at the top of the Australian corporate structure have the skills, knowledge or experience to lead the way.

 

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