McKinsey released an article titled “How to Scale Your Own Digital Disruption”. The article highlights very valid leadership and organizational options to help businesses think about digital as more than a sideshow.
In our work, we facilitate many advisory boards comprised of CIOs, CMOs and CEOs and speak to hundreds of them each year. Our discussions and learnings are aligned with the recommendations made by the McKinsey authors, but we also hear an indication of some challenges in the C-suite’s ability to make the shift, and drive change fast enough.
Chief Digital Officer as Leader of Change
It isn’t enough to find a Chief Digital Officer (CDO) and hope that she will solve it all through a depth of digital knowledge.
Large, global, complex organizations have serious challenges ahead to get through digital transformation. Many companies have put into place a CDO to lead the digital movement, and several express complete failure of that individual and the role.
When we dig under this we find that these people failed because of the role definition and the fast paced evolution of digital.
The first generation of CDOs were great early adopters of social and mobile. They were passionate advocates, but often lacked experience in leading large-scale, complex change.
Today, companies are moving these roles into much more senior positions in the company, and they are picking leaders who are not just passionate about digital, but can lead massive change. The best of these leaders are driving forward with aggressive and advanced shifts in the organization, including an absorption of the legacy part of the business.
Legacy Has Value
CMOs argue with this notion of legacy having value—but it is true that legacy isn’t all bad.
In fact in many industries legacy technology may serve as the foundation – the place where all of the historical client data, for example, is stored. Legacy systems—like legacy people—do bring value to the future.
For example, large retail chains that are shifting their models to digital, need to have modern systems and applications that can tap into the legacy systems if they really want to understand the depth of customer interaction and history.
In another industry, a CEO pointed out that the legacy systems are the only way that the ships will continue to run on time. While holding onto legacy does slow the pace of change, CIOs and CMOs agree that it is important to look at digitization with a long view and not throw out the baby with the bath water.
2-Speed IT is Great in Theory—But We Need SuperSonic
Most executives a year ago were arguing for Gartner’s 2-speed IT. Today we hear fewer and fewer CIOs supporting this path. “It creates a bifurcation of our organization,” suggest many CIOs. “I don’t want an entire organization that is focused on the past,” stated a CEO. “Let’s force a modernization of the old and an absorption of the new. Everyone needs to get reskilled and inline to support a new mode of working—that new mode is SuperSonic!”
I don’t want an entire organization focused on the past. Everyone needs to support a new mode of working—SuperSonic.” ~ CEO advisory board member
Money Rules the Day
The McKinsey article closes with three areas that need new capabilities: workforce, processes and priorities, and budget, each are very well stated and incredibly difficult to achieve.
But—as we have seen with CMOs and marketing spend—budget is king.
If you don’t have money for print ads, you have to find a different approach. If you don’t have money to support applications that aren’t written for cloud, you have to figure out a way to push your vendor partners to modernize applications.
In the words of Nanny McFarland, “People reluctantly follow people. People always follow the money.”