Want digital transformation? First, you need to get the board on board

The biggest obstacle facing companies trying to bring about digital transformation is not the employees but the directors, according to new research.

businessman boardroom

Businesses need a digitally savvy board to bring about real change.

Image: iStock

Many companies now have 'digital leaders' to champion their innovation projects. These leaders go by different job titles, such as CMO, CIO, or CTO, but the role is the same: to be the one person in any organization who shoulders the responsibility for promoting the need for change.

And that, according to new research from executive search consultants Russell Reynolds Associates (RRA), is where companies go wrong.

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"It is a mistake to rely on one or two people to execute a digital transformation but too many organisations do this," said Rhys Grossman, co-lead of the digital transformation practice at RRA. "To execute on this, you need a group of people who all understand what needs to be done and how to do it. One person alone cannot do that."

Rather than relying on a structure which places digital talent in a few key functions, Grossman believes that organizations need a digitally literate and capable board, and digital expertise embedded across divisions.

"This is not going to happen quickly," Grossman told ZDNet, "but it can be done over time."

Is finding the right people one of the big issues?

"Absolutely," said Grossman, "but if you look around, you will see that most companies are aware of this and the forward-looking ones are already doing it."

The executive recruiter conducted psychometric assessments with 27 top digital executives to find out what made them tick. It uncovered 21 attributes of the best digital transformation leaders and noted, "We have never seen a cohort of top executives so different from other groups". It said the most successful digital transformation leaders are "productive disruptors", that is, they not only come up with big ideas but also engage people "in the hard work of transformation".

"Digital leaders are, unsurprisingly, more disruptive and innovative than other executives. But, equally important, they are more socially adept than other executives, as well as bolder and more determined in translating ideas into action," the research said.

The RRA analysis sets out a four-step road to digital transformation from 'not ready' to 'ready'.

At the start most companies are focused on steady state management, are skeptical of new ideas, are risk averse, and are most comfortable working in environments that have well established processes and long-standing structures. Most people will recognize these features, but are not sure how to progress. RRA sets out clear goals for this process.

Here is an outline of one journey RRA describes:

  • Step one: Focus on steady-state management.
  • Step two: Employ incremental improvements of existing products and services.
  • Step three: Look for significant improvements in those existing products or services. If you don't see any, you might want to start over.
  • Step four: You have achieved significant benefits and developed entirely new products and services.

Some streams of the RRA methodology have as many as 10 steps, and the firm stresses you must not look for fast change -- haste can be the worst enemy in this kind of process. Companies that try to achieve too much, too quickly often have to backtrack. Worse, they can do real damage to them to themselves, the firm says.

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