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Top Challenge: How CEOs can lead successful digital transformations

The rewards of technologies like AI and big data analytics are clear, but how best should CEOs lead in what can be unfamiliar territory?

With the rapid adoption of digital tools such as AI, the roles and responsibilities of CEOs have quickly taken on a new dimension and thrown up many fresh challenges.

For many incumbents, already dealing with pressing issues such as the pandemic, getting on top of a plethora of new transformative technologies is understandably daunting.

But there are principles and advice that can minimize disruption and ensure that CEOs continue to lead organizations well, and take full advantage of the opportunities that these digital tools and resources represent.

It starts at the top

The first principle is that transformative technologies are not simply another tool. They cannot be delegated at the strategic or leadership level.

CEOs should ask some fundamental questions:

  • Do I know enough about this technology to lead credibly, and how will this impact my board leadership team and their responsibilities?
  • Am I open and willing to challenge existing business structures and models to remain competitive in the light of new rivals?
  • Are our values and ethics prepared and robust enough to cope with the issues and dilemmas thrown up by any new technologies such as AI?
  • How do we organize ourselves in the light of transformative technologies? Exactly what kind of transformation will be required?

Setting the scene for acceptance

The CEO has an important job to set the tone for the entire company when facing technological change.

By demystifying the technology, creating acceptance, and reducing fears, the person at the top will set a firm framework for a real transformation.

Asking people to make massive changes whilst appearing timid and unconvinced is a recipe for spreading doubt about the worth of the whole project and undermines leadership credibility.

Understanding progress

As organizations continue to launch more and more digital initiatives, the question is: how does the CEO keep track and measure progress?

Before the organization gets to that stage, however, the wise CEO will limit the number of those digital initiatives, based on a clear understanding of priorities. Perhaps three to five bold programmes that offer clear outcomes that directly benefit the organization. Less, as they say, is more in this case.

Five important markers on the digital journey

McKinsey makes the important point that ‘given the scale and complexity of digital transformation, measurement is critical to ensure that all the expense and effort of digital investment are paying off with improved performance.’

CEOs should monitor five broad markers to assess the organisation’s digital progress accurately.

These include:

  1. What is the return on digital investments?

Is value being provided by the initiative, and is it supporting strategic organizational goals? Ensure to address one critical process, customer or employee journey, or function, at a time. This means you can leverage similar data sets, technology solutions and team members for multiple use cases, ultimately saving time and expenses.

  1. What percentage of the annual technology budget is being spent on bold digital initiatives?

If you are only allocating a small proportion of the technology budget to enable your most strategic, bold digital initiatives, chances are you’re unlikely to get the maximum return on digital investment. Watching and identifying the allocation of technology spend reveals if the organization is positioned to deliver digital-backed value.

  1. How long does it take to build a digital application?

Deployment speed is a key performance indicator (KPI) in digital and analytics. Too slow, and you’ve been overtaken and lost any advantage. Too slow is also a red flag that your organization isn’t working together well enough to efficiently get things done.

  1. How much of your business leaders’ incentives are linked to value-creating digital builds?

A CEO must ensure that all organizational leaders are accountable for digital transformation and each of them are truly driving tangible value. The first action to do this is to ensure that incentives are accurately aligned to the value being delivered.

  1. How much top technical talent attracted, promoted, and retained?

Last, but absolutely not least, talent is critical. Not just the technical skills, but the managerial ones too. Identifying, attracting and retaining talent grows harder and harder as the worth of digital initiatives grow. A robust talent plan, with succession elements, a welcoming culture, and enlightened management will reap rewards.

Teams deliver better

Of course, for all their importance and influence as beacons and leaders of transformation, CEOs clearly do not work alone. So they do need to think hard about the composition of their senior leadership teams. Many fellow senior leaders will also be confronting digital transformations for potentially the first time. The key is to balance those with leaders and teams who have proven abilities to lead tech programmes that have succeeded.


To discuss your leadership needs in the light of digital transformation, or your career, please don’t hesitate to get in touch.

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