October 27, 2021
Who should own digital transformation?
We discuss who is at the head of digital transformation and why you should care.
Take a few minutes to Google “who owns digital transformation?” and you are bound to come out more confused than when you began.
One article will argue the CMO is taking over the technology reins from the CIO. Another might say the IT department has nothing to worry about. Yet another will contradict everything you just read, and reveal a fancy new role is emerging, one to rule them all. The fact that no one agrees who should own this all-important driver of the modern business is troubling, but there’s a deeper issue at play.
Not only do people not know who should own it, it seems no one actually knows what digital transformation is! In fact, this fragmentation of ownership is just a symptom of a much larger, more serious lack of understanding of the true nature of digital. Once you figure that part out, the question of who should own it becomes obvious.
The divided state of digital transformation
Before we get there, let’s add detail to the claim that digital transformation ownership is extremely fragmented.
In a presentation back in March 2018 to the American Marketing Association, Toronto Chapter, David Kincaid shared some insights from his firm, Level 5 Strategy Group, showing just how divided we’ve become. In a survey of businesses executives, asking who is responsible for digital transformation:
Brian Solis’ Altimeter Group shared a similar finding in its survey of global executives. It showed digital leadership is divided among the C-suite, with 34% saying the CMO is in charge, 19% saying it’s the CIO’s job and 27% leaning on the CEO.
There are two basic ways to read this research. One is that there is a war on for the role of digital leader, and multiple parties are hoping to win. The other, far more useful take (in our opinion) is that all these businesses are simply getting the fundamental notion of digital all wrong.
It’s no wonder people are confused. “Digital transformation” is an extremely nebulous, though ubiquitous term. People who think digital is about updating the customer experience will naturally think the CMO owns it. Others who think digital is narrowly focussed on operational and technology changes will look to the CIO, and so on. All of which is true, but only partly so, and misses out on the bigger picture.
So, what is digital transformation, really?
This is a question posed by Claude Ricks at Level 5 Strategy and Simon Chan at Open Consulting Group in two excellent articles. In Chan’s piece, he aims to get rid of the confusion by defining three words that frequently appear together when discussing this topic: digital, strategy, and transformation. In brief, here are the definitions Chan gives for each:
- “Digital” is simple and inert. It’s all about the communication between electronic devices using binary code, or ones and zeros. Digital is just another way of talking about information and communications technology.
- “Strategy” is where things start to get complicated. But Chan makes a firm argument that strategy is basically the accumulation of three things: Taking a stance or market view, backing up that stance with objectives, and finally, taking actions to achieve those targets. You need all three, or it’s not a strategy.
- “Transformation” is where things start to matter. It’s not just change; it’s much larger than that. As Chan says, transformation is a “profound and radical process, which orients an organization in a new direction” and takes it to new levels of effectiveness.
With the three terms laid out, Chan puts them back together to have a definition of digital transformation:
"Using technology to create differentiating ways of doing business with the aim of driving growth in new and existing markets"
Picking up where Chan finishes, Ricks at Level 5 makes a more compelling point. Since, by definition, digital transformation is a radical, complete change to the organization, fragmenting its leadership into buckets is insufficient. In his own words:
“You can no longer focus on one or two segments and call yourself digital.”
Who should own digital then?
This is where the rubber really meets the road. We agree with Ricks when he argues the only way to truly deliver digital transformation is by engaging with it from the top-down. If there is one person in your organization who should own it, it has to be the CEO. Every other member of the C-Suite, including the CMO, CFO, CIO and COO, need to align with the CEO and the digital strategy he or she is pursuing.
Of course, this sounds great in theory, but in practice is difficult and rife with internal politics and squabbles. If you aren’t a CEO, for example, what exactly is the role you play in driving a digital vision? As CMO for instance, maybe you are the best person positioned to ask the tough questions, such as:
How will digital be used across the entire business to radically transform everything we do? How will it impact customers, IT and employees? What does an all-encompassing strategy look like and how does it deliver to all groups?
The bottom line people need to realize is digital transformation will separate good from bad companies. Not only can it not be done alone, it should be the best work the organization ever does.
It’s time to get everyone in the leadership on the same page, digitally empowering everyone, employees and customers, and every decision in the company.
This is why choosing a technology to support digital transformation is one of the most important decisions for the process. No matter what your current digital stante is, or where you think you want to take it, building on a stack that goes the distance and is always evolving will offer you support, insights and the necessary tools to consolidate your strategy across the entire business.
While the question of who owns digital will likely continue, we hope the point we are making is clear. No single department owns it. Every department does. So, it’s time to act like a team and put the right leader in charge, if you really want to go digital. Take time to really look at your organization in the mirror, and move past who owns digital to taking a pulse check and creating an action plan for the digital health and future of your organization. The hard reality is, the best companies out there create digital well-managed companies— anything else will be jeopardy.