More evidence of the need for Digital Business Leaders has emerged from a recent Forrester Research Report ‘The State of Digital Business in 2014’. While 74 percent of the business executives surveyed claimed to have a strategy for dealing with digital disruption, only 15 percent believed their company had the capability to execute the strategy.
Successful digital business transformation, according to Forrester, requires the full support of CEOs to drive investment priorities. However, few CEOs fully understand digital. It is not surprising, therefore, that ‘many executives report that their firms are woefully unprepared to deal with the digital onslaught.’ In firms with more than 250 employees, just 21% of CEOs set a clear vision for digital. This falls to just 17% in larger companies with 1,000 to 10,000 employees. To correct this, companies need to hire digitally skilled employees.
The fact that marketing tends to dominate digital responsibilities in most organisations is an additional barrier to digital transformation. While marketing teams may be expert in areas such as social media, social CRM, customer analytics etc, they pay little attention to how digital can transform internal business operations.
The ‘digital execution crisis’ identified by Forrester supports previous research highlighting a major skills shortage in this area. For example, a report by Capgemini Consulting and the MIT Center for Digital Business found that missing digital skills were the key hurdle to digital transformation in 77% of the companies surveyed (‘The Digital Talent Gap: Developing Skills for Today’s Digital Organizations, 2013’). Similar findings have been reported by IBM, Accenture and others.
Leading US Business Schools such as Harvard, Stanford, MIT and others have responded to the digital business skills shortage by offering Executive Programmes in ‘Driving Digital Change’. The majority of Business Schools in most other countries have been much slower to respond.
We live in an era of disruptive technology. A combination of the Internet, Social Media, Mobile Connectivity, Smartphones, the Cloud, Big Data, the Internet of Things and Gen C (constantly connected customers) are leading to the ‘end of business as usual’ (Brian Solis). As a consequence, organisations need to ‘adapt or die’.
There are a growing number of companies/products that have become, or are becoming, digital dinosaurs due to their inability to adapt (Kodak, HMV, Comet, Newspapers, the Music Industry, Higher Education, Facebook and many others). The future of business is digital and that future is now. Becoming a truly digital business is now critical to how we innovate and differentiate ourselves from the competition (Accenture Technology Vision Report, 2014). Forrester believes that every business needs to transform into a digital business – where digital technologies are exploited to find new sources of value for customers and increase operational agility.
Digital Business Leaders Required
Used effectively, digital technology can deliver real business benefits across a wide range of value chain activities – not only in sales, marketing and customer service but also in internal operations (cost and efficiency savings), HRM, technology development, innovation and firm infrastructure (building agile organisations).
The key term here is ‘used effectively’.
While there is a growing recognition of the need for digital transformation, industry leaders (with a few exceptions) lack the digital knowledge, understanding and confidence to drive change. Younger managers (Digital Natives) may have the technology skills and confidence required but may lack the high level strategic understanding of how to fully align digital technology to support core business goals.
A new breed of senior executive is required – Digital Business Leaders – executives who can combine high level business knowledge, experience and understanding with the ability to develop Digital Transformation Strategies fully aligned with and supportive of agreed business goals and objectives. Executives with the personal skills and confidence to drive organisational change.
Are our Business Schools ready to deliver the Digital Leaders of the future?
All comments and feedback very welcome.
Jim and Vincent