I listened to an HBR webcast not too long ago which posed the question as to whether larger organisations should now be appointing a ‘Chief Transformation Officer’ (CtrO), or a ‘Chief Digital Officer’ (CDO). It’s an interesting subject for a couple of reasons. A ‘C’ level title obviously has gravitas and seniority associations with it but it also might suggest something of a more permanent nature, somewhat distant from the project or programme director nomenclature more commonly used in transformation leadership. Somewhat more important is the discussion about the function and role a CTrO or CDO might fulfil. Where exactly would it fit in the panoply of organisational structure, governance and control?
Many organisations still see ‘transformation’ as something ephemeral, a project or programme which moves the organisation from an old paradigm to something shiny and new. It could be anything from an organisational restructuring exercise to launching a new operating model, or developing and rolling out a new IT platform. In the past it has often been seen in a project context with a beginning, middle and an end. A concept is developed, business case funding and objectives approved, a plan created and implemented, and the whole thing is handed over to operational ‘business-as-usual’ people. Job done; transformation complete!
This is no longer a tenable approach. Transformation is now a continual challenge. Not only is it perpetual in nature but it is occurring at an ever-shifting and accelerating pace. Business models that have worked for years or decades are at risk of being blown out of the water by competitors that are more fleet-of-foot, and who have a better grasp of the benefits of the latest technology and customer experience requirements. Organisations must therefore embed a culture of transformation into their DNA to survive. Leadership and direction is now a constant need, which does indeed suggest some single unifying force is required to help pull together the vision, strategy and execution on an ongoing and constant basis.
So what exactly would the function of a CTrO or CDO be?
As few, if any, actually exist at this time we need to define exactly what need such a function would address. We already know a lot about the broader issues it would face but we still need to work out exactly what the role it would play in resolving these challenges. Central to the role would be leadership in the vision of how organisations are able to adapt to the challenges and opportunities of technological change. It is not however purely strategy, nor is simply an extension of IT or entirely focused on the change management implementation aspects of transformation. It is a blend or synthesis of all three. Leadership and vision is required but a good understanding of technology is also required, as are some sound capabilities in the execution area. A CtrO would need to work with IT, strategy and senior functions to both contribute and help translate the broader longer term strategy into actionable plans. It would need to help source new ideas, internally and externally, and leverage the capabilities of IT and other support functions in constantly re-imagining and helping shape and re-build the operating model, using the best technologies available. Above all it is a unifying force, one that strives to help strip away silo thinking and working. In fast track world of the second decade of the 21st Century, it could well be the most important role that doesn’t exist.
I am writing this listening to the latest Radiohead album, streamed on the Amazon Prime service. The hard copy CD version is not due out for another month but the tracks are already available, for a fee… Amazon are a pretty solid case study of how end to end digital thinking has managed to improve the digital customer experience. It is a far better service than I have had in the past and it started me thinking about what exactly is meant by a ‘digital transformation’.
‘Digital transformation’ is something of a misnomer as it’s really about far more than the IT aspects of digital. It is about speed, vision, capability, culture, change management, working together, unification and integration. It is about technology stretching into all parts of the organisation with the objective of creating an agile, continuous improvement focused culture, one which strives to create the ultimate customer experience. But it is also even more than this. It can also be about process improvement, perhaps achieved by digitising processes, enhancing the ability of employees to work, or general performance improvement. ‘Big Data’ and robotics are likely to play an increasing role in this space as will the ‘Internet of Things’.
Organisations who master the art of perpetual incremental transformation will naturally evolve their business operating models as their markets and customer requirements change. Digitally constructed organisations will constantly re-shape their internal control structures. New products and possibly whole business areas become far easier to identify, develop and launch. The technology platforms are the glue that binds together the vision with operating model and customer delivery experience. Decisions become easier in the sense that they become more data driven rather than trial and error guesswork. Organisations who successfully integrate discrete systems into single seamless delivery platform have a far greater chance of meeting the ongoing threat of market challengers. Not only are they able to defend themselves but the development opportunities are almost endless. The challenged become the challengers.
Which brings me back to Amazon. Having crushed competition in the consumer goods space what is there to stop them making some serious inroads into the world of services? They epitomise a digital leader and clearly have the skills, vision and capability to exploit an obvious world class fulfilment platform. Amazon Prime TV may be an early example of what is to come. What, for example, would stop Amazon applying for a banking licence, making inroads into insurance services or having another go in the travel area? How would these sectors respond?
Technology is constantly offering both opportunities and threats, but it is how quickly organisations are able to adapt that will define an incumbent’s chances of survival. Perhaps above anything else digital transformation is about the speed organisations can adapt to changing and more demanding customer requirements.