As business increasingly becomes digital and data-driven, many companies that once appeared to be built for success suddenly seem structured to fail. That’s evident in the lackluster results that recent digital transformations have delivered; according to a recent BCG study, over 80% of companies accelerated their transformation projects last year, but 70% fell far short of their objectives.
Because digital transformations change every process — from strategy to execution — and alter every function, they’re often challenging. To successfully pull one off, CEOs have to be digitally literate and get personally involved. This means understanding the nuances of the digital world and helping to shape product design, user experiences, and technology direction.
As Tom Siebel, founder of Siebel Systems, recently wrote in McKinsey Quarterly, “What I’m seeing now is that, almost invariably, global corporate transformations are initiated and propelled by the CEO. Visionary CEOs, individually, are the engines of massive change that is unprecedented in the history of IT — possibly unprecedented in the history of commerce.”
Taking on Digital Transformation
Yet, it seems that many companies don’t have the kind of CEOs, top management teams, and boards of directors they need to tackle digital transformations. According to a study of about 2,000 companies that was published in Sloan Management Review in March, only 7% were led by digitally competent teams; that is, a team where over half of the members are digitally savvy, with a firm understanding of how emerging tech will shape their company’s success. Unsurprisingly, those companies outperformed the rest by 48% in terms of revenue growth and market valuation….
