7 digital transformation leadership sins – and what to do instead
Blog: The Enterprise Project - Digital Transformation
Teamwork, collaboration, and alignment can drive the success or failure of digital transformation efforts. But the right leadership skills enable those critical practices. In many ways, the attributes of a successful digital transformation leader diverge from traditional IT leadership capabilities. As a result, newly minted digital leaders can make significant missteps or miscalculations in their first forays.
[ How are you staffing your efforts? Read also: Digital transformation teams in 2021: 9 key roles. ]
From assuming support and funding for transformation and poor communication to leading from the top and failing to provide direction, here are seven of the worst digital transformation leadership sins – and what to do instead.
1. Mistake: Assuming financial support for digital transformation initiatives
While it’s true that organizations across industries are under enormous pressure to transform, it is still incumbent upon digital leaders to convince the organization to buy into the effort. “The typical operating budget is under constant pressure, driving the need to maximize efficiency,” says Greg Bentham, vice president of cloud Infrastructure Services at Capgemini North America. “As with any sales transaction, a level of trust needs to be established before the buyer is inclined to buy.”
What to do instead: Make the financial case for investment. The purpose of this is not only to secure funding (which is itself critical) but also to set expectations and build confidence in the digital team. “The way this trust is established is through a solid business case where the hard and soft dollar values are clearly articulated in a manner where the stakeholder is inclined to buy,” Bentham says.
[ Get answers to key digital transformation questions and lessons from top CIOs: Download our digital transformation cheat sheet. ]
2. Mistake: Focusing on output
When it comes to digital transformation, traditional service level agreement (SLA) metrics fail to illustrate the value of the initiative or how it is progressing.
What to do instead: Look at outcomes. Successful digital leaders invert the pyramid; their key performance indicators are experience-related rather than the typical SLA measures. “They seek to listen to the front line and users to understand what is actually required,” says Iain Fisher, a director within ISG’s Northern European Digital Strategy and Solutions Practice, “not what they have to deliver.”
3. Mistake: Underestimating and under-communicating requirements
Businesses tend to lowball the effort required to plan and execute a successful digital transformation. “Many organizations believe that they can layer transformation on top of their normal activities without dedicated resources,” says Greg Stam, managing principal in the CIO advisory at digital business consultancy AHEAD. “They pull together matrix committees to discuss the problems of the day and how they might attack them.”
They ultimately decide they need to modernize applications, upgrade technology, or retrain staff, but perhaps without a cohesive strategy. “All these things are good but will not produce digital transformation,” Stam says.
What to do instead: Run DT as a program with a roadmap and dedicated team. “[Digital transformation] must be a priority for the organization as opposed to something nice if they can get to it,” Stam says. Effective digital leaders create a strategy that addresses all aspects of people, process, and technology and make sure that is communicated and reinforced across all levels within the company. That helps everyone understand why transformation is necessary, how it impacts their job, and what their role is in making it a success, says Stam.
4. Mistake: Top-down leadership
It’s lonely at the top – particularly when it comes to digital transformation. What’s more, old-school hierarchical leadership is ineffective and often counterproductive to these efforts. “Leaders who use certain leadership styles to manipulate, create their own platform, or seek to only focus on the big picture for political reasons typically lose their people and cause rework and burn out,” says Capgemini’s Bentham.
What to do instead: Lead from behind. “Leaders lead but not necessarily from the front,” Bentham says. “They sit underneath their high-performing teams., leading by example so that the whole team wins. Leaders know that it’s lonely at the front, so they go as a team.”
5. Mistake: Treating digital transformation as an IT project
Lack of business direction will sink even the most potentially powerful technology initiative. “Digital transformation is not just an IT project – it must be led by business goals,” Stam of AHEAD says. “Too often, transformations get off and running from little or no direction from the business side. This lack of participation is a dangerous risk. The business may be pivoting or trying to make a competitive leap forward and IT is focused on improving the status quo.”
What to do instead: Partner closely with the business. “CIOs must have a business partner that is working hand-in-hand to drive toward a business outcome,” Stam says. “The digital transformation program must have a comprehensive knowledge of the business strategy to ensure that they are investing in the enabling technologies that will drive the desired outcomes.”
6. Mistake: Infrequent or inaccurate updates
“Not having feedback loops built into management structures creates a false picture, and without weekly operational meetings, it is impossible to know what is going on,” says Bentham of Capgemini.
What to do instead: Create open, effective two-way communication. This includes not only building in feedback loops and regular updates to communicate vision and progress, but also creating an environment where honesty is encouraged. “A no-blame culture must exist for successful delivery,” Bentham says. “Listen to updates and suggestions which create innovation. Empower the team to try and fail. Experiment and support the creativity.”
7. Mistake: Lack of formal ownership
“It’s common to see a CEO or CIO declare a high-level strategy (or more likely a goal) for digital transformation and then delegate it to their subordinates,” says Stam of AHEAD. “Each subordinate then interprets the strategy independently and initiates siloed projects.” The end result is wasted time and money. Worse, Stam adds, it leads to frustration and the mindset of ‘Let’s just get this done and off of my plate.’
What to do instead: Appoint clear leaders, core teams, and common governance. “[Individual] contributors often do not understand the scope of transformation unless a leader is uniting teams and laying out a plan for cross-organization transformation,” Stam says. “The leader must be a role model with the authority to hold people accountable for progress and supersede other projects if necessary.” In fact, transformations were 22 percent less likely to fall behind if truly led by a CTO, CIO, CDO, or CTO, according to AHEAD’s State of Enterprise Digital Transformation 2020 report.
[ Culture change is the hardest part of digital transformation. Get the digital transformation eBook: Teaching an elephant to dance. ]