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 * DIGITAL TRANSFORMATION
 * C-SUITE INSIGHTS
 * LEADERSHIP


DIGITAL TRANSFORMATION SUCCESS STARTS WITH LEADERSHIP AT THE TOP


THE MORE EXTENSIVE AN ORGANIZATION’S DIGITAL AMBITION, THE MORE IMPORTANT THE
ROLE OF LEADERS CAN BE IN REMOVING BARRIERS AND ALIGNING INCENTIVES


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Savvy leaders likely understand that digital transformations come in all shapes
and sizes, necessitating leadership approaches that are tailored accordingly.
Leading an organization through digital transformation can involve a delicate
mix of critical capabilities and instincts in areas such as understanding risks
and opportunities, determining whether and how to act, setting the
transformation ambition, and closing any gaps in the organization’s
transformation readiness.

Deloitte research into how more than 20 global CEOs effectively led digital
transformation helps identify some critical yet nuanced actions leaders can take
depending on their organizations’ digital aspirations, current state of
readiness, and required magnitude of change. Leaders can contemplate some
powerful truths as they embark on their digital journey.

Leaders Matter, No Matter the Transformation

Transformation ambitions can range from moderate to radical, but most digital
initiatives require at least some level of engagement from the organization’s
leader. The need for leadership engagement is often greatest when digital
ambitions relate to a customer-facing process or high-priority growth strategy,
or when aspirations are foundational for more ambitious future transformation
plans.

The leader’s role in maintaining direction over any digital ambition and
articulating strategy can involve three core elements.

Break through roadblocks. Leaders can help clear a path to success and empower
their people to break through siloes and the status quo.

“My role was to simply not let the organization back up, to continue to pump the
vision of where we needed to be,” says J. Eric Pike, CEO of Pike Enterprises, a
North Carolina-based infrastructure solutions provider. “And if anyone presented
a roadblock, I told them to go under, over, through, around—any way to make
it happen.”

Highlight the bigger picture. Digitization is often seen as a series of small
initiatives and investments, but digitization programs can include ambitious
goals that are important to the organization’s larger strategic context of value
creation, competitiveness, and growth. Leaders likely have an important role to
play in helping the organization remain focused on these bigger picture goals.

Assign ownership and monitor. Without dedicated focus, people’s day-to-day jobs
tend to take priority, potentially leaving the digitization effort struggling to
make progress.

Marc Huffman, CEO of BlackLine, a global software company, emphasizes the
importance of assigning people to prioritize digitization. “Digital
transformation is a full-time job,” he says. “You must assign focus, funding,
and clear ownership to key leaders. Through them, you can inspire and guide your
team to rethink how their day-to-day jobs get done through the lens of digital
transformation.”

Big Ambitions Require Big Involvement

As the digital vision gets more ambitious, leadership involvement should also
increase, especially if the organization is not ready for change. Bold visions
may be bigger than the organization’s readiness, so leaders may need to have an
active, hands-on role in developing incremental strategy milestones and driving
change. If digital ambitions are high but readiness for transformation is low,
leaders can consider five key elements to drive change.

Tell a compelling story. Leaders can create an integrated vision beyond just
technology and deliver it with powerful and consistent messaging that can help
bring people along on the journey. To help others see the opportunity, it may be
important to craft a compelling story, anchored by core values, to describe how
the organization can evolve with purpose.

Align incentives with digital transformation. Compensation and rewards can be
important factors in driving behavior. Incentives can be financial, but they can
also be personal, such as a desire to make a mark on an organization or a fear
of failure.

Address weaknesses exposed by the digital journey. Long-term gains may come with
short-term pains. Digitization and digital transformation can expose internal
weaknesses for leaders to acknowledge and tackle. It may be impossible to
completely eliminate the risk of short-term disruption, but investment in
digital transformation can be a powerful signal of the potential for long-term
gain.

“Don’t get into too much detail,” says Giny Boer, CEO of C&A, one of Europe’s
leading fashion retailers. “But when people talk to you and you don’t get a
proper answer to the question: ‘How well is it really going?’ stay close to
those key strategic areas. If something is unclear, it’s time to dig in.”

Create optionality for the future. Disruptive innovations could continue to
emerge and evolve, making it difficult to set a strategic direction for
eternity. A digital strategy should provide multiple possible directions for
future development while building a culture and structure that can capitalize on
available options.

Plan for succession. Digital journeys can be ongoing, often outlasting the
tenure of individual leaders. Leaders can push the limits of what they can
achieve but also look for champions of the vision to continue the work, allowing
the vision to become lasting.

Even Leading Organizations Need Leadership

Organizations that are ready for digital transformation may not need the leader
to be deeply involved in day-to-day transformation activities, but they may
still have a distinct need for leadership on strategy, innovation, and growth.

CEOs and other C-suite leaders can work with C-suite tech leaders to identify
next opportunities for innovation, growth, and disruption. They can continually
evaluate whether the business model should shift and how digital technology can
help broader strategy, for instance by enhancing the existing business,
responding to a competitive threat, maximizing an M&A opportunity, disrupting an
existing industry or ecosystem, or achieving some other strategic goal.

Even digital natives and traditional innovators may become digital followers if
they become complacent. An innovative, evergreen culture can be nurtured
continually.

CEOs can also continually assess the market for opportunities. “One of our
values is jumping at 60,” says Hardy TS Kagimoto, CEO of Healios, a regenerative
medicine startup in Japan. “If we feel like we know 60% [of the details about an
opportunity] and the probability of success is strong enough, I take the risk to
jump in. That is how we get to know the cutting-edge tech and what is real or
not.”

CEOs can scan the horizon for technologies that are five to 10 years away from
becoming mainstream while still balancing the need to respond to current
disruptive technologies through short-term sprints.

“Our core works very well, so I spend my time gazing at the periphery,” says
Vincent Roche, CEO of Analog Devices, an American semiconductor company. “We
hired field marshals who can grasp what customers are struggling with—curious
leaders keeping an eye on the periphery and building a nuanced vision for how we
are moving ahead and how our customers are evolving, and for figuring out the
software and ecosystems.”

Digital transformation is likely an imperative for virtually every business
today. There may be many ways to pursue it and many ways leaders can play a
role. One constant may be the importance of direct leadership involvement.
Digital initiatives can be simply too important to delegate and ignore.

To learn more, read the full report.

—by Tim Smith, principal and Tech Strategy & Business Transformation leader,
Deloitte Consulting LLP; and Brenna Sniderman, managing director, and Diana
Kearns-Manolatos, senior manager, both with the Center for Integrated Research,
Deloitte Services LP

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved.
87990cbe856818d5eddac44c7b1cdeb8



PUBLISHED ON: March 24, 2023 3:00 pm ET

This article is part of an ongoing series of interviews with executives. The
executives’ participation in this article are solely for educational purposes
based on their knowledge of the subject and the views expressed by them are
solely their own. This article should not be deemed or construed to be for the
purpose of soliciting business for any of the companies mentioned, nor does
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Copyright © 2023 Deloitte Development LLC. All rights reserved.


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