It’s OK. You have a team looking at digital. They’ve got it covered. Have they really?
Do you also have an IT team, a marketing team and a data or insights team? Maybe even an innovation unit?
Who’s really responsible for and championing digital in your organisation? Are the lines between departments clear? Does everyone share the same vision and approach to digital? Are there gaps in knowledge, expertise or remit?
As digital continues to exert even greater influence on businesses, the pertinent question for CEOs remains: Is your business in safe hands when it comes to digital?
Whatever industry you’re in, whatever your product or service, your business is digital.
You might think you’re doing all the right things.
You’ve probably got a digital department. They’ll look after your website, your email marketing, your social media, online advertising and perhaps your mobile app. If you sell online you’ll have dedicated resources focused on growing digital acquisition, increasing conversion and repeat sales. You’ll have customer service teams responding to online requests and publicly shared reviews and social mentions. You’ll maintain a number of different platforms and technologies that underpin your online experiences.
But digital isn’t just a superficial add-on to your business – a subset of marketing or a virtual storefront for example. It’s fundamental to your whole business. It can affect the products and services you provide not just the distribution channels and technologies you use. It can change the whole business model you operate and even the industry you’re in.
If digital is consigned to a role or a department at best, do they have the experience and remit to identify, influence and act on such transformative business change?
Digital isn’t just a part of marketing or technology. It doesn’t just sit somewhere in between the two either. It transcends all departments of a business today.
Establishing a digital department may seem like a sensible thing to do, but it’s looking at digital in the wrong way.
Some businesses have assigned a digital role on the board, a Chief Digital Officer for example. This is better, as that person is more likely to exert broader influence of digital across the entire business. Some have established a digital board comprising multiple stakeholders to perform a similar function.
However, when you look at ‘digital first’ businesses like Amazon, Airbnb, Uber or the thousands of tech startups emerging in every industry, as well as those that have pivoted like Netflix, they integrate digital throughout every role. And they’re performing far better than their traditional counterparts. In a recent global study by Capgemini / MIT Sloan Management, digital leaders were shown to generate 9% more revenue than the industry average and a staggering 26% more profitability.
Wherever you are on your digital maturity journey, as CEO, you need to stay close to digital, regularly monitor what your business and your competition is doing and know how you’re adapting to become more digital.
Digital is continuing to grow at a rapid pace. It’s moving faster than most businesses can keep up with. It is the main reason half of the companies on the Fortune 500 have disappeared since the year 2000 (Accenture). Seven of the top eight companies in the world by market capitalisation today are digital-based businesses.
Top 8 companies in the world by market capitalisation as of September 2018. Digital-based businesses are highlighted in yellow.
As a CEO or business leader you need to know that you’re doing everything you can to stay on top of digital. You don’t need to be a technical expert or spot every new disruptor in your market. But you do need to know how you’re performing, especially when digital is continually rising. Where do you stand against your competitors? What do you need to look out for to stay relevant in the future? What are the threats to your business you need to act on now?
McKinsey reports that just 8% of companies believe their current business model will remain economically viable through digitisation. They add that companies moving quickly in response to digital competition generate nearly twice the revenue growth of those playing it safe.
Chances are that the CEO from at least one of your competitors knows more about digital and the impact to your industry than you do. They will be organising their business to respond to those changes faster than you are. What are they planning? What will be the impact on their market share and yours? Are you prepared for the change you need to make?
As CEO you need to be a generalist. Of course, you need to be able to lead and run a successful business but you’re not expected to be a specialist in anything.
However, it’s not ok in 2018 for a CEO to either dismiss digital or insolently admit lack of digital knowledge. There are ways for CEOs to pick up the right level of digital knowledge, but you have to first acknowledge why that’s important.
Don’t just rely on others to do what they think is right. If someone is looking after digital for your business and you don’t really know what they’re doing, that’s a big warning sign.
Some may say a little knowledge can be a dangerous thing, especially for CEOs. I argue that CEOs should know enough to ensure that their business is running in the right direction. You don’t need to know everything, that’s what you hire people for, but don’t give away so much that the future of your business is out of your hands.
To conclude, here are 10 things CEOs should do to stay on top of digital:
The first is not to be under the illusion that digital is a passing fad. It’s changing everything. Most businesses that exist today won’t be here tomorrow.
Before you can change, look at where you stand. How digitally mature are you? What are the key gaps and priorities?
Don’t just look at your direct competitors today. Who are the ‘digital first’ or fast-pivoting disruptors? Some of the greatest threats (and inspiration) will also come from outside your sector.
Hire a Chief Digital Officer or equivalent who has influence across all departments. Give them the freedom to do new things. Sometimes a digital board is the answer but make sure it’s set up to make change and keep momentum. Decision by committee can make things crawl.
Digital can positively impact business performance measures such as revenue and profitability as well as customer satisfaction and Net Promoter Score. Understand how digital can be attributed and add it to board reports.
Customer data is a highly valuable asset. Mine it and use it but look after it too. Ensure you’re GDPR compliant and guard against data breaches.
Don’t just use digital to make existing business models, products and services better, build new ones too.
Dabbling in blockchain, Virtual Reality or Artificial Intelligence does not make you a digital leader. Technology can support your strategy but it shouldn’t lead it.
Simply following what’s being done already is looking at the past. You need to look forward too. And if you’re too slow executing a strategy, it might be too late by the time you launch.
Just because you have a digital transformation programme, it doesn’t mean it will be successful. Research from the Economist, Forbes and Harvard Business Review suggests that between 66% to 84% of such programmes have failed to generate the desired results. Resource transformation well, support it from the top and consider it as a continuous process of business change.
Originally posed here