Do you need to become a digital master? The right question is, do you have a choice?
In their recent book, “Leading Digital | Turning Technology into Business Transformation,” authors George Westerman, Didier Bonnet, Mael Tannou, Patrick Ferraris and Andrew McAfee present an excellent framework to measure the impact on revenue-generating efficiency and profitability of the right way to learn, assimilate and apply digital technology in a variety of organizations. Using four quadrants to distinguish lower and higher combinations of digital capability (the what of technology) and leadership capability (the how of leading change) in the organization, companies were grouped and labeled as Beginners, Fashionistas, Conservatives and Digital Masters.
Beginners have not felt the urgency to face the digital challenge and, even if they did, lack the leadership to make fundamental changes take place. Fashionistas act and invest on their sense of urgency, but, because they lack strong digital leadership and governance, they waste much of what they spend for lack of integration across the enterprise. Conservatives are the opposite; they are extremely prudent in their investment appetite, even if they already have the leadership and governance structure to make fundamental changes. Digital Masters enjoy both capabilities, enabling them to build superior competitive positions in markets where they choose to compete, and they beat the rest in revenue generating efficiency and in profitability.
Here we focus on the x-axis of their framework and overlay their 10 prescribed leadership capability indicators with the three leadership needs of any organization, according to the “organizing for business excellence” paradigm (see diagram).
Seven of the ten indicators describe what manager-leaders do at the institutional level to satisfy the need for transformational leadership. The authors found that the journey to becoming a Digital Master is a top-down phenomenon marked by a strong vision and disciplined governance, both of which help drive digital investments in a common direction. Two of the indicators describe what manager-leaders do at the technical level, singling out the singular function leadership need satisfied by IT in the digital transformation of any company. Leadership capability indicator #6 describes what manager-leaders and their winning teams create and sustain with transactional leadership—the capability to execute cross-functional and cross-region digital initiatives.
Do you need to become a Digital Master? The right question is, do you have a choice? You don’t, because the sustainability of your business depends on it. Go digital—now!