How Board Directors Can Remaster Leadership to Win in Digital Business

August 16, 2017

Contributor: Susan Moore

Leadership, cultural change and the right talent on your board are essential for digital transformation.

In recent years it has become fashionable for Australian business leaders to visit Silicon Valley, to meet and learn from the digital giants who have helped reshape entire industries.

"Save your money,” says Peter Sondergaard, executive vice president of research at Gartner. “Change doesn’t happen by going to Silicon Valley, although it can certainly provide inspiration. Digital transformation requires a series of fundamental changes in your organization.”

“ Digital is about leadership, culture and talent. How will you execute leadership transition at board and executive level? ”

Speaking to an audience of board directors in Sydney, Australia, Sondergaard said that the concept of digital business would enter the ‘trough of disillusionment’ within 12 to 18 months, as large parts of organizations become frustrated with the speed of change and rebel.

“Will your leadership team stand up and manage through a period in which they will be constantly questioned? As leaders, you need to see your organization through to the other side, to what Gartner calls the ‘plateau of productivity’," he says.


Put technology at the core of your business

According to the 2017 Gartner CEO survey, 42% of enterprises plan to use digital technology to optimize the current business, not for transformation. Seventeen percent have no ambition for digital business at all.

Digital transformation is about making technology the core of your business, not the back office IT that runs your business today. Most organizations, Sondergaard says, have very large digital projects underway, but have not changed the way the organization behaves. They have not put digital at the core of their business.

Sondergaard highlighted a set of five fundamental changes that board directors need to make.

  1. Change the metrics. Gartner’s 2017 CEO survey found that more than half of CEOs have no metric for digital business transformation. How will you measure progress?
  2. Change how performance management is done. Today’s employees expect ongoing feedback and coaching. Old-style annual performance review cycles will result in the organization losing agility as well as the talent it wants to retain.
  3. Change governance and decision making. Some governance processes are necessary due to the regulatory environment. However, every large organization says it holds them back. Directors should ask if the current decision making processes will stack up in 5 years.
  4. Change your approach to security. Don’t treat security as a technology problem, but as a business problem. Set metrics that are leading indicators rather than “after the fact” once an incident has occurred. Adopt a continuous, adaptive risk and trust assessment approach for making decisions.
  5. Change financial management for projects. The business world is no longer defined by large scale multi-year projects with an end date. More flexible, performance based budget processes are needed for technology-based change.

Finally, directors and senior executives need to change the leadership mindset of the organization. Digital is about leadership, culture and talent, says Sondergaard. How will you execute leadership transition at board and executive level?

Drive stronger performance on your most critical priorities.