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StrategyOct 15, 2015

Digital Transformation and the Rise of the Chief Digital Officer

Justin Bell

In the book Leading Digital, the authors identified two distinct capabilities that a company must excel in to achieve “Digital Mastery” and a high degree of digital transformation.

  • Digital Capabilities – defined as the investment in and development of the technical digital capabilities (e.g., the technologies, tools, infrastructure, etc.)

  • Digital Leadership Capabilities – defined as having committed leadership for digital that can establish a vision for the organization and oversee the transformation to digital

In their research, it wasn’t enough for a company to just invest in digital capabilities.  Without the combination with the digital leadership capabilities, much of this investment had little impact.

I’ve seen these same patterns in many other companies.  Many companies have been investing heavily in the technical digital capabilities.  However, strong digital leadership and culture is required to turn investments in digital technology into a return on revenue growth and profitability.

  • Understand that “mobility,” “analytics,” and even “digital” should not be the organization’s goals; instead define a vision for how leveraging these and other digital technologies to redefine how they can better reach and serve their customers and / or improve internal operations

  • Lead the change to streamline governance and IT processes to ensure that the organization can move at the “pace of digital”

  • Establish a culture of innovation that is okay with “fast failures,” constantly testing, learning and iterating to identify the best opportunities to improve the customer experience, create new products and business models and streamline operational processes

The need for this digital leadership capability is being recognized and is why we’re seeing a strong emergence of the Chief Digital Officer or similar roles in many organizations.  The ability for the Chief Digital Officer to work effectively with the CIO and CMO will be a key differentiator between the companies that succeed and those that fail in this increasingly digital world.