I’m addressing this column to the rest of the C-Suite: everyone except the CIO. In fact, this column is intended to rescue many CIOs. You see, there’s this very trendy but very poorly-defined concept called ‘Digital Transformation’ floating around. Depending on what you read, Digital Transformation is somewhere between ‘vital’ and ‘mandatory’ for your organization to survive. That’s what the Board, the CEO, the CFO, and everyone else is hearing. If everyone is saying it, it must be true, right?
Since most executives aren’t sure what Digital Transformation is, but they know they’ve got to do it— to keep investors happy, if for no other reason — and it includes the word ‘digital,’ the obvious reaction is to point at the CIO and say, “Do one of those Digital Transformation things (along with all your other jobs).”
Most CIOs know that doesn’t feel right. For all the CIOs who don’t have the ear of the CEO or the trust of the C-Suite and BoD, I’m writing this piece to reframe the conversation.
‘Optimization’ Is Good, But Not Transformative
First things first: Digital Transformation is NOT ‘automating stuff.’ With the incredible capabilities of modern technology and the accessibility of that technology from Cloud vendors, it’s tempting to just start automating (the trendy word at the moment is ‘digitizing’) your processes and call that Digital Transformation. When you properly automate existing processes, that’s ‘Optimization’ rather than ‘Transformation.’ Done well, such Digital Optimization can be good:
- Faster cycle time leads to better customer satisfaction.
- Reduced manual intervention helps with staffing issues.
- Repeatable processes create fewer errors.
- Running processes faster, with less labor, and with fewer errors reduces cost.
Sounds great; let’s get going! But more often than not, just digitizing existing processes is a poor use of time and money. There’s a basic ‘law’ of IT: Automating a bad process just produces bad results faster.
The often-overlooked first step in Digital Optimization is creating optimal processes: removing unnecessary steps, identifying inter-silo breakages, cleaning up messy workarounds, and incorporating ‘out-of-band’ steps (undocumented things that process operators ‘just know to do’), then automating
The term ‘reengineering‘ was defined to describe just that process, although that’s been forgotten for over a decade. If you automate an optimized process, the resulting Digital Optimization can have a major and rapid payoff which is especially welcome if the business is slowing.
Digital Transformation Is Top-Down
Digital Transformation is very different. It doesn’t start with ‘what we are doing today’; it starts with ‘what do we want to become in the future?’ Here’s my definition:
“Digital Transformation is a CEO/BoD led reimagining of an organization’s
What is Digital Transformation Exactly? by Wayne Sadin
culture, markets, products, customer experience, and employee experience
that is driven — in part or entirely — by the promise or threat of technology.”
Notice a few things:
- It starts with the CEO and Board of Directors (not the CIO).
- It’s a reimagining of the organization (strategic, risky, audacious).
- It’s about culture, markets and products, and customers and employees (the heart of an organization).
- The word ‘technology’ occurs last — on purpose.
The Roles of the C-Suite in Digital Transformation
I’ve been a CIO for 25-plus years, and I think I’m pretty good at the job. As a C-Suite executive and sometimes Board member, I’ve often been involved with ‘mission/vision/values’ discussions…but you know that saying about the CEO job: “The buck stops here”? When you’re reimagining an organization, that’s the CEO’s job, with board input and approval.
That’s not to say the C-Suite should be excluded from the discussion. You need our input and our advice, and you need our buy-in to carry out the big, hairy, audacious goal called ‘Digital Transformation.’
- As a CIO, I’ll explain the latest technology tools, identify promising and threatening technology, and describe the readiness of my team to handle the technical stuff.
- The CMO can share data on market shifts, buying behavior changes, survey data, and competitive analyses.
- The CRO can tell you what customers wish we sold, what products ‘feel old,’ where the competitors are beating us (AND where new competitors might be coming from)
- The CFO knows how much we can spend, how much we can borrow, and even which divisions/products might be better off divested or shuttered
Final Thoughts
In the end, it’s the CEO’s call. You get to bet the organization on a long-term course of action that may create a very different organization than the one you signed up to lead. The good news for most CEOs is that you DON’T need to be a technologist. You just have to appreciate what technology can do for your customers and employees.
You have to be willing to tell — and sell — that story to everyone, from investors to employees to customers to the press. Once you choose a Transformation path, you get to spend the rest of your time talking about it. Make no mistake, the CEO’s and BoD’s role in any transformation is to ‘cheerlead.’
Your team will doubt; your investors will worry; your competitors will grab share and poach nervous customers. It’s up to the C-Suite, led by the CEO, to keep the team on course. Transformation is a journey. Be prepared for a much harder job than just ‘automating stuff.’
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