Studying the impact of innovation on business and society

TechRepublic: What CEOs are getting wrong when it comes to digital transformation

by Alison DeNisco, TechRepublic (Excerpt)

Digital transformation efforts often start with the CEO—but a lack of change in C-suite teams, organizational structure, and company culture hinders digital shifts at many companies, experts say.

“With the exception of chief digital officer, there’s been a relative stability in terms of how the CIO thinks about their management team,” said Gianni Giacomelli, chief innovation officer at Genpact, and head of its Genpact Research Institute, which has studied digital transformation. “With the rate of change and innovation you have in the world today, the CEO still says, ‘My organizational design is pretty much the same as before.'”

“It’s an intriguing mistake—you cannot feel that everything else must change, but the organizational structure should stay the same,” Giacomelli said.

A tension remains between what digital transformation is and who should own it, said Brian Solis, principal analyst at Altimeter. “The challenge is that businesses don’t yet fully realize the promise of digital transformation or the purpose of it—they still look at it as a technology play,” he said.

In Solis’ 2016 State of Digital Transformation report, he found that digital transformation was led by the CMO in 34% of organizations, while it was led by the CIO in 19% of companies. […]

However, deeper shifts to the C-suite remain to be seen, Solis said. “Companies haven’t changed the C-suite yet because there is nothing threatening it,” Solis said. “Their perspective is, ‘If we invest in new technology, we remain competitive.’ But that’s not the promise of digital transformation.”

Solutions for CEOs

Giacomelli, Firth, and Solis offer the following tips for CEOs to maximize the value of their teams and digital transformation efforts: […]

Make the investment. “Digital transformation is a cost, or an investment, depending on how you look at it,” Solis said. “There is a lot of work ahead with ROI and short and long term planning in this, where one day the CEO would say ‘We’re going to focus on this change and invest in a long-term strategy.” From there we will start to see evolution of the C-suite, he said.

7. Innovate, don’t iterate. Digital transformation is meant to provide the opportunity to create, and do new things to create new value. “Some people think that tech companies are innovating, but they haven’t changed the game,” Solis said. “That’s where tech companies can be the best possible partner in digital transformation.” This also means fostering a culture of experimentation, Giacomelli said.

As a tech company, building that partnership with a client means not selling your product as the sole solution for digital transformation efforts, Solis said.

“Too many tech companies are forcing blinders on companies to think about solutions in very narrow ways,” Solis said. “I would love to see solution providers become enablers for bigger transformations around those solutions—asking, ‘What are your challenges, and how are your customers and employees changing?’ so we can figure out the solution and new outcomes.”

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