A CEO’s primary responsibility is to provide leadership and guidance to an organization, as it strives to meet the corporate mission of enhancing shareholder value. In today’s corporate climate, digital transformation must be on the agenda of all corporate boards and at the top of the CEOs’ strategic plans because it is an essential factor in driving innovation and corporate success. Companies that are extending their engagement with digital platforms enhance their ability to engage with customers, enhance teamwork and collaboration, boost productivity, enhance operations and unlock insights from data. They enhance their ability to engage with their clients and deliver valuable solutions.
Technology is the new strategic frontier that companies are using to differentiate themselves, and there is a real risk that CEOs who do not incorporate technology solutions in their company plans will find themselves on the back foot, unable to effectively compete with their more innovative and forward thinking peers.
There are four main reasons why digital transformation is a CEO topic:
The first is that business today, is increasingly being conducted across digital platforms. The world has gone digital and it is the CEO’s job to ensure that the business is not only current and competitive, but also a step ahead of the competition.
Although companies have been using productivity boosting and cost savings technology solutions like email, expense systems, procurement solutions and team collaboration platforms for some time, most of those technology solutions were focused on cost reduction and moving towards lean and enhanced operations. The use of digital technology in the current business context is increasingly about customer engagement and boosting revenue generation. The new digital solutions are helping companies find newer and better ways to engage with the customer not just at the purchasing stage, but also before and beyond the purchasing experience. The result is that businesses that are plugged in are gaining deeper insights about customers that they are incorporating into the entire customer experience process from product conception to after sales support.
The second reason digital technology falls squarely within the CEO’s remit is because the identification and implementation of strategic business initiatives that enhance shareholder value is a significant part of the CEO’s job. Businesses are increasingly being faced with a transformed competitive landscape in which the new marketplace, is digital. Take Banking for instance, where transactions are increasingly occurring not in Banking halls but on smartphone APPs and online, and the new competitors for Banks are not just their peers, but emerging Fintech solutions offering payment systems and loan options. In advertising, agencies are finding that digital platforms are allowing them to develop targeted campaigns that allow them to personalise content to individuals allowing for higher returns on investment on marketing spend than traditional media. Over the last decade, digital advertising has gone from almost zero to about 30% of global marketing spend. From retail, hospitality, entertainment, agriculture, healthcare, education and financial services, technology is playing an immense role and the organisations that will thrive are those whose leadership recognises the strategic necessity for ensuring their organisations are equipped and ready to engage fully in the digital marketplaces that characterise business today.
The third reason is implementation. Embedding technological processes into a company’s culture is not always easy. The transition to a more technology focused way of doing business will usually include teaching, learning and rolling out new operational processes and investment in new equipment. In most cases, it may represent an entire paradigm shift from the company’s usual way of doing business. Change of any kind can be challenging for organisations, and without the imperative for change coming from the leadership, the required transformation in culture and processes, might not happen. The CEO must lead the charge for a technological future. While an IT department may lack access to other departments within the organisation – both horizontal and vertical – the CEO can mobilise all the necessary resources within an organisation, laying out plans with the heads of departments as well as the board members to ensure a swift and unified dissemination of agreed technology practices. When change starts at the top, it is easier for businesses to adopt and adapt as needed.
Finally, the pace of change in digital is so brisk and so sweeping that it might be challenging for any company to keep up with new innovation while trying to operate in their core business. This requires working with technological companies specialised in providing those solutions in strategic partnership. For instance, companies in the retail industry generate massive amounts of data comprising of customer purchasing and financial data. Such data must be stored securely and analysed for insights that can support more sales. If such a retail firm is to stay focused on its core business, it might decide to partner with a cloud solutions company to manage its data and keep it secure. It might then partner with a data analytics company to help it generate insights from the data that can inform customer targeting activities. The negotiations and agreements needed to develop such strategic partnerships would usually require the input and perhaps even the leadership of the CEO.
As organisations work towards aligning their operations to take advantage of the enormous possibilities that digital technologies are providing for businesses to grow and thrive, CEOs must recognise that technology is not just a set of tools used for facilitating growth, but that it is their business, to ensure its seamless integration into their organisation.