A digital transformation demands fundamental change across every part of the company. The CEO is the only person who can make that scale of sustained change happen. CEOs can accelerate both the pace of change and value captured by focusing their energies in six areas.
CEO lessons from digital transformations
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I also spend a lot of my time understanding what’s happening in the market. I speak with around three start-ups a week in every kind of video technology. Some are potential competitors; some we might be interested in partnering with. With others, I am just getting to know the founders. What are they seeing in the market? That is extremely helpful in picking up on trends.”
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Work by exception and brute-force problem solving can work for a small set of teams for six to 12 months, but that approach just cannot scale. The best-performing companies break through entrenched organizational constructs to foment a culture that values the doer over the manager, and small teams over org charts. A small team of exceptional people working in agile ways delivers significantly more impact than an army of average talent resources.
Agile
Making digital “stick” at scale is hard to do because of the far-reaching knock-on effects of digital and the need to continually recalibrate and realign across the entire business system to capture the full gains. Clear KPIs and transparency are necessary to track progress.
Adoption
Successful transformations start with the CEO and top leadership reimagining their business in a digital age. These are bold visions to generate transformative value—think new business models, entry into new markets, and monetization of data-based assets. Leading companies develop transformation road maps focused on business domains (such as a customer journey, core business process, or function). A domain is big enough to generate meaningful value and comprehensive enough to be completely transformed.
Strategy
New talent is one of the fastest ways to accelerate a digital transformation. Top organizations address both hiring and retention as well as corporate culture and purpose. While money is a motivating factor, more important is understanding what really motivates top talent and adjusting the company’s culture and approach to appeal to them.
Talent
Two building blocks adopted from the software industry define the core of a modern technology environment: a cloud platform and an engineering process to deliver software. Without these, agile teams stall and become mired in complexity.
Tech
The ability of the technology solutions to generate value is dependent on the quality, relevance, and availability of data. For this reason, data management requires the commitment to identify, generate, or acquire it with a single-mindedness that reflects its value as a determining competitive differentiator. This new discipline must be learned by every company and become a core part of the C-suite’s vocabulary.
Data
Strategy
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We need to redefine the boundaries where value can come from.…”
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I spend a lot of my time understanding what’s happening in the market….”
20%
of the business
Fundamentals: Value
Has articulated a significant
pool of value that builds off of a proprietary asset and represents the potential to affect
President, Collins Aerospace
Steve Timm
10%
of his or her time visiting other companies, speaking with people outside the company, and examining trends outside both the company and the sector
Fundamentals: External orientation
Spends at least
CEO, Vimeo
Anjali Sud
Talent
Agile
Tech
Data
Adoption
I spend a lot of my time understanding what’s happening in the market. I speak with around three start-ups a week in every kind of video technology. Some are potential competitors; some we might be interested in partnering with. With others, I am just getting to know the founders. What are they seeing in the market? That is extremely helpful in picking up on trends.”
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Many CEOs have domain experience that they’re comfortable with, and they don’t want to get outside of that. They’re not thinking about redefining the broader architecture or ecosystem. We need to redefine the boundaries where value can come from.”
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Can articulate not only which domain the digital transformation is focusing on but also what his or her responsibilities are in executing it
Fundamentals: Leadership
Chuck Magro
Former CEO of Nutrien and now CEO of Corteva
There were already many digital initiatives and apps under way in the business, but it was fragmented and too deep into the org.…”
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There were already many digital initiatives and apps under way in the business, but it was fragmented and too deep into the org. By sponsoring the digital transformation, I was able to elevate digital and focus it on how to best serve our customers by creating a single platform that integrated all of our services.”
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Prioritizes investments in cutting-edge technologies to attract top talent
Fundamentals: Hiring
Ted Doheny
President and CEO, Sealed Air
We presented ourselves as a $5 billion start-up.…”
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We presented ourselves as a $5 billion start-up. We started SEE Ventures, made investments in start-up businesses and technologies, and joined the MIT incubator program. These moves didn’t contribute immediately to top-line growth, but they did attract the people and culture we wanted.”
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Plays a central role in developing and communicating the digital vision to the tech team in general and new recruits in particular, including interviewing top talent beyond the C-suite
Fundamentals: Purpose
Karl Johnny Hersvik
CEO, Aker BP
You get good people by demonstrating that you’re really changing the world and working on tough problems.…”
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You get good people by demonstrating that you’re really changing the world and working on tough problems. Finding talent is a top management issue, so top management has to dedicate real time recruiting. The first group of people you hire—maybe five or ten of them—have to be top talent, really the best people you can get.”
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Increases the clock speed of decisions and ties bonuses of those in his or her key teams to speed in hitting key digital-transformation milestones
Fundamentals: Speed
Anjali Sud
CEO, Vimeo
I have never once looked back and thought, ‘Wow, I moved too fast.’...”
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I have never once looked back and thought, ‘Wow, I moved too fast.’ I always think, ‘I moved too slowly. I wish I had made that decision earlier.’ As organizations scale, you add so much structure and communication layers, and they slow you down. For me, this is a worry as Vimeo scales.”
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Alain Bejjani
CEO, Majid Al Futtaim
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In digital transformations, we are doing things that we cannot know for sure will deliver results, especially in the short term.…”
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Role-models effective senior contribution to agile rituals (such as staying focused on goals but deferring decision making to team leads) and explicitly encourages experiments
Fundamentals: Learning
In digital transformations, we are doing things that we cannot know for sure will deliver results, especially in the short term. This represents a big bet on the future of any business, so we drive forward, learn, and adapt along the way. This includes being comfortable with giving up on things that we’ve invested in and become very good at when necessary, in order to develop new capabilities in areas that are out of our comfort zone. Mistakes are extremely valuable when they are the outcome of having done your best, especially when people learn from them so they don’t make the same mistakes again.”
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Has incorporated technology into strategic decision making and makes significant investments in tech
Fundamentals: Tech connected with business
Jessica Tan
Co-CEO, Ping An
Even though we never really know how technology will change, we think it’s important to have these capabilities….”
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We’ve always been very aggressive on the digitization front. Our founder [and chair], Peter Ma, has always been visionary. Ten years ago, when he said we should invest significantly in technology R&D above and beyond IT, it was not an easy decision to make. We now spend more than $1.7 billion of our revenue every year. Even though we never really know how technology will change, we think it’s important to have these capabilities.”
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Can articulate exactly how technology and data generate value for the business
Fundamentals: Value
Ram Krishnan
Former CEO of Final Controls and now executive vice president and COO, Emerson
The fundamental architecture of value is having a pervasive sensing platform that generates data…”
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The fundamental architecture of value is having a pervasive sensing platform that generates data, centralizing a database that collects it, and then applying AI- and ML-driven software to convert it into actionable insights.”
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Anjali Sud
CEO, Vimeo
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That data helped point the compass, but data alone doesn’t provide insight….”
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Actively tracks progress in modernizing IT and enriching data
Fundamentals: Insight
One of the first things I did was dive into the data: Who was using our tools? What were they using the most? What did they like, and what did they not like? When our subscribers left us, where did they go? That data helped point the compass, but data alone doesn’t provide insight. The other important unlock was talking to customers. I used to go to trade shows and work the booth and answer customer questions. Having those conversations is when it clicked for me: combining the data with the human anecdotes that build the empathy for their problems.”
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Works closely with the CFO to architect funding mechanisms to maintain sufficient resources to sustain successful digital- transformation initiatives for the long term
Fundamentals: Long-term commitment
Alain Bejjani
CEO, Majid Al Futtaim
To maintain momentum toward long-term goals, it’s important to avoid ‘transformation fatigue.’…”
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To maintain momentum toward long-term goals, it’s important to avoid ‘transformation fatigue.’ Sometimes the actions that have had transformative results in the past don’t work as well in the future, or at a larger scale, and trying to use those same actions again is what most often causes fatigue for us. Or not realizing why another transformation wave is warranted when the previous one hasn’t fully landed. So we try to take the organization along as we scale up and accelerate our actions and keep the level of engagement and ownership very high across the business.”
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Chuck Magro
Former CEO of Nutrien and now CEO of Corteva
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We wanted to make sure from the beginning that the organization accepted and liked what we were developing.…”
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Reviews the ROI on digital investments through quarterly review process and holds him/herself accountable for a set of hard and soft progress metrics for the digital transformation (such as customer-satisfaction scores or percentage online sales)
Fundamentals: Buy-in
We wanted to make sure from the beginning that the organization accepted and liked what we were developing. So we took a customer-experience approach as the sequencing logic for development and rollout of digital products and capabilities. We built a digital platform that addressed their needs, such as allowing our agronomists to easily see each account they had. We also put digital-transformation people in each region to get our agronomists comfortable with using digital commercial transactions and showed them how to use tools in the field. We really tapped into the agronomists’ networks. In less than two years, we were processing more than $1 billion in orders [through digital channels].”
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Has 100 percent confidence that he or she understands exactly what progress is being made in the digital transformation, what key decisions need to be made in the next six months, and how to address any potential “last-mile” blockers
Fundamentals: Buy-in
Karl Johnny Hersvik
CEO, Aker BP
What’s been interesting to see is that our APIs that connect to the data platform are so easy to work with that people across the business have used them to create their own apps or applications….”
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What’s been interesting to see is that our APIs that connect to the data platform are so easy to work with that people across the business have used them to create their own apps or applications. We sent out lots of developers from Cognite to work with operators out in the field to figure out how to use the data platform to solve their problems. They created their own solutions and allowed them to be part of the development, rather than having something imposed on them from above. And we found that this ended up creating a huge set of advocates who then trained their colleagues.”
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