Perspectives

Only the CEO can create a High Digital Score Enterprise!

In my previous article, I discussed the strong relation between the Digital Score (DS) and business performance of an enterprise. A high digital score enterprise (HDSE) is also a performing enterprise. My endeavor now is to define and describe a HDSE and argue for every enterprise to become an HDSE.

I take the earlier argument further and highlight the role of the CEO and other CXOs in creating a High Digital Score Enterprise (HDSE). That may sound contrarian, but believe me a CIO alone cannot do it. The role of a CIO is important from the perspective of building a functional digital technology platform, but building business on that platform requires the attention of the C-Suite leadership.

As presented in the earlier article, DS is a composite score of five aspects of an enterprise (leadership, boundary, strategy, culture and infrastructure). The co-relation of these five individual aspects with DS revealed very interesting perspectives.

The figure shows the scores of low, medium and high digital score enterprises across the five aspects. E.g. the overall score of a low digital score enterprise is 18.1 over 35 (summing up the individual scores of the 5 aspects, each on a 7 point scale). The difference on each aspects for ‘Medium – Low’ and ‘High – Medium’ score enterprises is also calculated, which shows the importance of individual aspects.

digital score by aspect

Broadly, all the five aspects co-related positively with the DS, but their relative strength varies. To take an enterprise from Low Digital Score to Medium Digital Score, digital boundary, digital infrastructure, digital strategy and digital culture – all matter. But interestingly to take an enterprise from Medium Digital Score to High Digital Score, digital leadership becomes very critical.

The importance of leadership (CEO and CXO involvement) to create an HDSE can be explained by the need of a new strategic orientation. The exploitation of the earlier strategic orientation can take organization only from low to medium score, but a high digital score needs a completely new strategic thinking. This involved envisaging a new business model and a compatible operating model.

So, an enterprise can move from low DS to medium DS as a part of the current scheme of things, becoming a HDSE requires a completely new orientation and thinking.

Though we have covered digital strategy as a separate aspect, it’s made up largely of the structural dimensions. The thinking dimension of strategy will ideally reflect in leadership aspect. A new vision, orientation and efforts towards transformation are essential requirements of creating a High Digital Score Enterprise.

This makes utmost sense.  I am reproducing the following five reasons for the CEO to lead digital from my earlier post

1. Becoming digital is a slow and steady process and happens through individual digital initiatives. A vision is required to guide these individual initiatives in terms of their contribution to a bigger dream. Without the bigger dream and the vision defined and communicated, the efforts remain scattered, inefficient and at times counter-productive. I know of many organizations where digital initiatives by the SBU heads and the CIO are not only duplication of efforts and wastage of resources, they also create confusion in the minds of those they are intended for.

2. The question ‘what capabilities the business require to compete? is the pole star for driving digital initiatives. It should not be just a fad to adopt tablets and mobile apps but it must be underscored by some business need. Capabilities often run across businesses, functions and departments. Hence, the various digital initiatives need to be integrated at some level for converting them into capabilities, something that only the CEO can drive.

3. Digital initiatives are adding new roles and activities, which very often are fluid in nature. They are emergent in nature. For example, creating a digital marketing initiative has role of both the IT and the marketing functions. In such situation ‘who will drive the initiative and how?’ becomes a moot question. CEOs need to take note of the emerging role fluidity and intervene before it creates anxiety, struggle and dysfunctionality.

4. Creating a digital enterprise, for the reasons cited above, may require structural mechanisms to undertake the operational aspects of the CEOs’ vision like identifying the digital initiatives, integrating them together, resolving role fluidity and related ambiguities and measuring the impact. Such mechanisms by nature cut across businesses, functions and departments. Again who else can do it? The CEO and who else.

5. Last bust never the least, digital initiatives and related efforts require budgets at the organizational level and CEOs have the power to decide on such resource allocation for such strategic aspects.

The similar logic holds true for the other CXOs in the CEO’s team – leaders of the businesses, functions and departments, for undertaking the digital drive in their respective areas.

A CIO has an important responsibility, that of creating a functional digital technology platform. But for creating a high score digital enterprise, that is not enough. A digital enterprise needs information leadership, a collaborative and shared leadership paradigm, which is different from the IT leadership we normally associate with a CIO.

(Enterprises interested in knowing their Digital Enterprise Score may get in touch with us at kds@coeusage.com).

CEO – Chief Executive Officer, CIO – Chief Information Officer, CXO – other C roles like Chief Marketing Officer, Chief Financial Officer etc.

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LEADDDING is a Coeus Age initiative to start a meaningful conversation around Digital and its relevance to business strategy and growth. The conversation shall not be just about technology but also about leadership, strategy and business performance.

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