One of the top priorities of CEO in the Digital Economy – Digital Change (Thrive or Perish)
We all know ‘Change’ is difficult to achieve, specifically, in an existing organization. Corporations change gradually and evolve over time i.e. evolutionary rather than revolutionary. The key driver for Change is the External environment which is mostly unplanned. Hence, what should an organization do in the rapidly changing digital landscape as they are forced to adapt in order to either thrive or perish? In the digital age, one of the top priorities of any CEO is to make sure that they lead the Digital Change effort within their organization.
Let’s take an example. CEO and the leadership team has worked hard and identified an opportunity in the digital space. Additionally, they have developed a digital strategy and identified the digital technologies to enable the implementation of the strategy. What are their chances that they will be successful if they have not aligned their organization culture, structure, people to support the digital strategy? As per Gerald Kane ‘Aligning The Organization For Its Digital Future’ MIT Management Review report, there are four factors that play a role i.e. Culture (desirable behavior), People (assets), Structure, and Tasks.
Out of these four factors, “Culture (under desirable behavior)” and “Assets” play a significantly important role towards the success of any organization planning on Digital Transformation. As shown below in the schematic, the Board is responsible for setting the corporate governance, the CEO (and the senior executive team) is responsible for setting out the strategy and establishing the desirable behavior. In order to be successful, the strategy has to be executed efficiently by resources (aka Key assets). In summary, the strategy is the input and the two important enablers are the ‘Culture’ and ‘Key assets’.
Corporate and Key asset Governance
Adapted from MIT Sloan School Center for Information Systems Research (CISR) – Peter Weill & Jeanne Ross
Let’s focus on these factors i.e. ‘Culture’ and ‘Assets’. The questions that come to mind are:
- Who is responsible & accountable for establishing these factors?
- How do you establish and measure them?
- How do you ensure that these are effective and helping you reach your goals?
Of course, CEO and the senior executive management team are responsible for establishing Culture and belief and it should start with the Vision and Mission statements.
“Culture as a set of basic assumptions defines for us what to pay attention to, what things mean, how to react emotionally to what is going on, and what actions to take in various kinds of situations.”….Ed Schein
Culture is like air! You can’t see it but you can feel it. In the case of air, one can identify certain attributes and can possibly measure and monitor them such as Temperature, humidity, pressure etc. So what are the attributes of Culture, in particular, in the digital age?
Some of the attributes of ‘Digital Culture’ are as follows:
- Appetite for risk (risk averse vs bold)
- Speed and agility (Slow to act vs nimble)
- Decision making (Instinctive vs data driven)
- Structure (hierarchical vs distributed)
- Creativity (low level of innovation vs high level of innovation)
- Trust (low vs high)
- Empathy (low vs high)
- Respect for ideas & peers (low vs high)
As you can see, Digital Culture is nebulous and hard to quantify. It’s something that you can feel and sense in an organization. However, by conducting surveys in an organization and using attributes described above on a graded scale, one can get a good sense of the level of digital culture by looking at their cumulative score of their attributes. Based on the research performed by MIT researchers, corporations having higher ‘Digital Culture’ score have a better success rate in implementing digital strategies e.g. Adobe, Salesforce etc.
The other factor is Asset. In the digital age, People in your organization are your key assets. Other assets such as digital technologies, physical assets, business processes are important but having the right people makes all the difference. Also, having people with deep technical skills is important but not sufficient. There are a few attributes apart from technical skills that help define the quality of talent and how well are they engaged in an organization. Some of these attributes are:
- Work Style (Independent/Silo vs Collaborative)
- Passion for work (work to live vs live to work)
- Incentive (money vs non-monetary such as training, support etc)
- Recognition (immediate boss vs peer to peer)
Once again, corporations that are digitally mature have a higher score with respect to people.
Implementation and monitoring of Digital Culture & Assets is a must.
As described above, ‘digital culture’ and ‘assets’ are the two most important aspects of digital change. In my opinion, here are the steps that need to be undertaken in order to implement and monitor them.
- CEO and Senior executive team, in addition to defining the strategy, they need to establish the Culture i.e. the desirable behavior via vision, mission, and strategic objectives
- In the case of a new digital opportunity, it may be prudent to set-up an entirely new Business unit (or a separate entity) with its own ‘new’ culture that aligns to your digital strategy to ensure success
- Involve everyone and live the ‘culture’ every day
- Institutionalize through constant reinforcement at all levels
- Develop and monitor your results (and fine tune the culture and assets as required)
- Do NOT fear the change, have ‘Faith’, ‘Patience’ and ‘Courage’. After all, ‘Courage’ is the difference between success and failure, that is, either you Thrive or Perish.
About the Author
Udey Chaudhry is an Executive Management Consultant, focusing on Digital Business Strategies and Execution, with extensive experience as a Strategy Consultant with top-tier consulting firms and successful startups. He is an alumnus of MIT Sloan School of Management.
All opinions expressed by Udey Chaudhry are solely his own and do not reflect the view of any professional organization.
© 2017 Udey Chaudhry All Rights Reserved
REFERENCES:
Peter Weill and Jeanne W.Ross, ‘IT Governance’, Harvard Business Review Press
Gerald C. Kane, Doug Palmer, Anh Nguyen Phillips and David Kiron, Natasha Buckley, ‘Aligning the Organization for Its Digital Future, MIT Sloan review, Summer 2015
John Van Maanen, ‘Three Perspectives on Organizational Change’, Professor of Organization Studies, MIT Sloan School of Management
Digital Business Strategy 