The New CIO: Leading Digital Transformation
If you’re a CIO, you know that digital transformation is a more urgent priority than ever before.
According to a KPMG CIO survey, 47% of CIOs say the pandemic has permanently accelerated digital transformation and the adoption of emergent technologies. The same survey reveals that global IT leaders reported increased IT budgets in response to Covid-19. And with the additional money comes additional pressure to prove return on investment or demonstrate savings.
While this time is exciting, and the opportunities are immense, the rush to transform can create its own difficulties. After having led a number of technology transformations, I can speak from personal experience. When you’re a CIO, one of your most important skills isn’t technical. It’s leading people through change.
The art of change leadership
As you might expect, there’s no single strategy for leading change during transformations. Every business has a different culture. In the high-tech industry, it’s not uncommon for the bulk of the employees to be deeply immersed in engineering and computer science. As a result, the majority culture in these companies can be weighted toward pure technical proficiency—and their leaders may assume that simple technical training is all that’s needed. This could be a recipe for a failed transformation when the resistance is about the change in how people do their jobs, not about learning the new system.
And while training helps, successfully leading change is about more—much more—than teaching people how to operate new systems or navigate new screens. If all you do is technical training, your digital transformation journey will likely be a rocky one. Transformation is hard. Some employees have bought into the why but not the what and how; others may still question the “why.” (More on the importance of why.)
Technical training does not take into account the changes end users are going to have to accept and how their work lives are going to change. Remember, you’re transforming workflows, processes, and cultural habits that employees have followed for years. Digital transformation is about digitizing your information and processes or about creating a whole new digital product that monetizes the data collected in and about your enterprise. By definition, this means that upstream and downstream processes and systems need to work together to produce an enterprise outcome.
This is different from how most enterprises operate today, where functional optimization is the objective. For example, a retailer may seek to optimize the in-store experience and separately optimize the online experience. The customer and the enterprise care about optimizing the customer experience, not just within one channel. To do this, users will probably be forced to adjust to new ways of doing things, learn new skills, and break down organizational barriers. Not only that, your digital transformation could mean that some roles might be eliminated altogether, and many other roles will probably require a lot more work in the short term. You will probably also find that you need entirely new functions that didn’t exist before.
Basically, you are not going to be popular. At least, not in the beginning.
To truly embrace change, employees need a thorough understanding of the big picture—the good (end state), the bad (current state) and the ugly (middle part).
This is the (seemingly) easy part: explaining the end state and the things it will enable for the company. However, don’t assume all end users will agree that what’s good for the company is good for them. It’s like the old Hollywood actor’s plea: “What’s my motivation?” CIOs, in tight coordination with rest of executive leadership, need to be focused, from the start, on communicating benefits to the end users.
Practical reasons, such as business survival, will appeal to some end users, but most will want to know how the transformation will make their lives better. If you don’t have concrete examples of how their biggest pain points are being addressed, you can put the entire initiative at risk. Forging an enterprise-wide understanding of how everyone will be affected will go a long way toward easing the pain of learning new systems and processes while instilling a sense that “we’re all in this together.”
In addition to new systems and processes needed to support your transformation, you’ll also need to fix or replace systems and processes that evolved to support vital parts of the business, but that are fundamentally inefficient or broken. The key to a successful transformation is sustained end user support—and that requires identifying business owners who can thoroughly assess the impact of change and explain why it’s the best strategy.
Business owners are different than subject matter experts. While someone working for the VP of sales operations might know more about the systems and processes currently used to book revenue, only the person with the end-to-end view of revenue booking process can make the decision to change it. This same business owner must also be responsible for being the change advocate by proliferating key messages and escalating problems to the transformation team and the CIO.
This is the middle part where everything is in flux, like when you decided to remodel your kitchen and realized after signing off on a fantastic design that you’re going to be living in your garage for a month. Not only is your house upside down, but your pets are freaked out, your kids are anxious, and you’re counting down the hours to having walls and your own bathroom again. In the ugly middle, everyone is expected to do more, and some things will even take longer to get done. The ugly middle must be co-owned (and, more importantly, co-driven) by all of your top corporate executives, followed by your lines-of-business leaders, business owners, and then by IT. Everybody needs to be onboard, and everybody should be held accountable for its successful execution.
Leading digital transformation
Transformation isn’t easy. If it was, most everyone would be successful at it – when by some estimates, 70% of digital transformation efforts fail to reach their goals.
In the lead up to this year’s Informatica World, digital transformation has been a particular focus for Informatica leadership. You’ll see it in the number of significant announcements of cloud-first, cloud-native offerings to help our customers accelerate their digital transformation. But you’ll also see an emphasis on leading change—and discovering your own transformative leadership style.
I hope these insights are helpful as you lead your own digital transformation.