The authors of Hacking Digital: Best Practices to Implement and Accelerate Your Business Transformation (out October 25th) explore how digital leaders can boost their credibility.
There has been a steady proliferation of digital roles in the C-Suite over the last decade, with titles such as chief digital officer, chief data officer and chief transformation officer becoming commonplace. By 2019, for example, 21 percent of global companies had a chief digital officer (CDO) position.
And yet the “shelf life” of digital roles is short. Our research shows that, on average, the tenure of a chief digital officer is 2.5 years, compared to an average of 5 years or more for most CEOs. There are two possible reasons behind this short tenure. First, the implementation of digital initiatives requires end-to-end coordination and collaboration, which is not a well-developed muscle in most organisations. Second, research shows that the majority of digital leaders are hired from outside of their organisations. While external hires can bring critical digital competence and experience, they may also struggle to quickly build the credibility needed to orchestrate organisational change.
Credibility depends on whether people believe that a leader has the knowledge and skills to do the job (perceived competence) and whether they have faith in a leader’s values and dependability (trustworthiness). Yet, many digital leaders struggle with understanding how to put this into practice.
A big part of a digital leader’s success is asking the right questions upfront. In particular, there are two questions that should be asked.
How Ambiguous Is The Role?
More often than not, digital leaders are given roles with high-ambiguity objectives, such as formulating a digital strategy or executing an enterprise-wide digital transformation. For example, the CDO of a U.K.-based oil and gas service company said that the broad scope of her role made it difficult to define what a positive outcome would look like. In such situations, newly hired digital leaders often spend a considerable amount of time developing their own job descriptions, including defining outcome goals and success measures.
In such cases, insist on taking the time for a discovery and design phase. This allows leaders to get a grip on the inventory of existing initiatives, and to understand the company’s digital ambitions, priorities, and implementation timescales. Moreover, digital leaders should mobilise the various business stakeholders and align them on a digital roadmap. Define the scope of the role, and make sure all stakeholders have a good grasp of “what good looks like.” As Mrutyunjay Mahapatra, ex-CDO of the State Bank of India, explained: “The first [thing to get right] is senior leadership buy-in. Digital transformation projects are not IT projects and require business buy-in. Top leadership needs to be invested right at the outset of the programme.”
What organisational levers do I possess?
When the objectives are nebulous, the means to achieve them are usually ill-defined. Beyond a clear line of reporting for decision-making, digital leaders should learn how the transformation will be resourced and funded, and what decision rights they have. It’s about governance, and how digital leaders set up their digital governance model will depend on the digital transformation ambition and underlying organisational culture.
While our research shows that 84 percent of organisations have established a dedicated group to oversee and manage digital efforts, choosing the appropriate digital governance model will be influenced by how much coordination the digital initiatives require across the various organisational silos and how many shared resources should be deployed to succeed.
In addition to asking the right questions at the outset, certain behaviours can affect how people assess their leaders’ competence and trustworthiness and, in turn, their credibility. Behaviours that help to project competence include emphasising future outcomes, taking action, and communicating effectively. Behaviours that help to project trustworthiness include acting consistently, communicating openly with others and offering support to employees and stakeholders.
Successful digital leaders often make visible moves that depart from the organisation’s traditional ways of working. They can be small moves such as instituting a new way of working. The point is to send strong signals by demonstrating and inspiring employees to reflect on long-standing practices. Take the example of Ibrahim Gokcen, the former CDO of Maersk, the global shipping company. Gokcen built an innovation room where he used some uncommon furniture to demonstrate how physical spaces could impact how people work. The idea was to show the spirit of design thinking and user experience. As Gokcen explains, “ It showed people that something new is happening. Something is changing.” By going against established rules and policies, digital leaders can demonstrate the power of their mandate for change.
As a complementary strategy, digital leaders strive to create quick wins to demonstrate the positive impacts of digital transformation. Ideally, digital leaders will have an initiative that they can conclude relatively fast or an existing end-to-end initiative that they can accelerate. Having a portfolio of quick and visible wins can help digital leaders to manage expectations and build their credibility.
A digital leader’s credibility is difficult to build and easy to lose. While digital competencies are a necessary condition for digital leaders, interpersonal skills are equally as important. Make sure to ask the right questions to manage expectations, make a number of visible small moves and quick wins, and stay the course.
About the authors:
Michael Wade is Professor of Innovation and Strategy at the International Institute for Management Development (IMD) and directs the institution’s Global Center for Digital Business Transformation, a research group focused on digital disruption and transformation. His academic research has appeared in Harvard Business Review, MIT Sloan Management Review, Strategic Management Journal, and MIS Quarterly. He has written 10 books and dozens of articles on digital transformation and business technology topics.
Didier Bonnet is Professor of Strategy and Digital Transformation at the Institute for Management Development (IMD). He was previously EVP – Global Digital Transformation at Capgemini Invent. Didier’s research has been published by Harvard Business Review, MIT Sloan Management Review, R&D Management and Business Strategy Review. He is a published author and a regular commentator for the Financial Times, Forbes, and other top publications on digital transformation.
Tomoko Yokoi is a Researcher and Writer at IMD’s Global Center for Digital Business Transformation. She is a Forbes contributor on topics related to digital transformation and innovation, and her articles have been published in numerous practitioner outlets such as MIT Sloan Management Review and Quartz. Drawing from over 20 years of experience as a senior executive in B2B and B2C industries, she brings practitioner insights on digital transformation into her research.
Nikolaus Obwegeser is Professor and Director of the Institute for Digital Technology Management at the Bern University of Applied Sciences. His areas of expertise include digital business transformation and innovation. A scholar and author, Nikolaus has published in academic and practitioner outlets, including MIT Sloan Management Review, Technovation and the Journal of Product Innovation. He was previously a research fellow at IMD and an associate professor at Aarhus University (Denmark).