Just about every business is digital today – or talking about going digital. Pioneering companies like Amazon showed us how to use the web to create new digital business models, generate huge revenue streams, and create automated processes that save time, cut costs and deliver truly customer-centered experiences. And with the rise of mobile, cloud, social media and the Internet of Things, companies now have unimaginable amounts of data at their fingertips – data and customer access that can be used to blur the line between digital and physical worlds even further. The possibilities have never been greater – to eliminate legacy systems and build new ones that dramatically accelerate processes and enable full engagement with customers and suppliers in near-real time. To deliver transformational services and customer experiences. And much more.

But for most C-level executives, the nagging question is how and where should we start? According to Jill Dyché, Vice President of SAS Best Practices and author of the new book The New IT: How Technology Leaders Are Enabling Business Strategy in the Digital Age (McGraw-Hill), everyone is looking for a digital road map – even companies that are household names.

Dyché recently shared her thoughts and best practices with an executive audience in an Argyle CMO Leadership Forum keynote. I had the opportunity to follow up with her after the presentation, and in the course of our conversation, gained additional insights from this established author and thought leader.

The Impact of Business-IT Dynamics

Dyché notes that while every executive she speaks with agrees a digital road map is important, few know where to begin. And even fewer understand whom to engage and when.

“One of the interesting challenges in developing a digital road map is figuring out what’s the role of the business versus the role of IT,” she said. “So often, there are adversarial relationships between these players.” Meanwhile, CEOs are under pressure to meet business goals and ensure the company keeps pace with changing technology and consumer behavior. “Most CEOs know they need to get strategic about digital, but they see this internal conflict and say forget it – we’ve got to do this another way,” she added.

The persistence and intensity of this adversarial dynamic has given birth to yet another new C-level role: the chief digital officer, or CDO. According to Dyché, the chief digital officer is an additive role created not to fix the internal conflicts, but rather to deploy new technology capabilities. “The problem is, the organizational relationships are still broken, so these individuals are extremely challenged by the incumbent cultures. Chief digital officers come in and face issues they didn’t foresee and weren’t warned about, like the strife between functions and questions about the role of IT.”

Because the chief digital officer role is new, business managers are often confused about its boundaries. And as chief digital officers try to navigate through or around these challenges, they can get marginalized quickly. “They can also get caught between different business and IT visions,” noted Dyché. “Marketing might disagree with IT about the why’s and how’s. There’s no road map on either side, and the CDO has to try to create a strategy. Or IT wants to own digital technologies (like big data, analytics and mobile solutions), and the CDO ends up having no control over existing technologies or the skill sets needed to execute. So he or she might end up turning to outside resources to get the work done.”

In other cases, chief marketing officers think they should own digital and its accompanying platforms, but they lack sufficient authority over the digital vision. So when a new upstart is hired to “own” digital across the business, it often triggers internal competition that can quickly sabotage the chief digital officer. This is particularly true for those charged with trying to create a single digital strategy across the enterprise – an approach that Dyché says is fraught with risk.

Given these challenges, chief digital officers often become change agents in name only. “Change is difficult,” explained Dyché. “It makes people feel bad. It upsets cultural norms and people’s role definitions and senses of personal value – until the change begins to result in value.” But many executives who insist they are ready for digital actually lack the technologies, resources, skills, and external and internal relationships necessary to execute on the digital strategy.

For these reasons, Dyché recommends that companies not invest in a chief digital officer role until they are ready to make the necessary changes. According to Dyché, you’ll know your organization is ready when:

• More than one department has identified digital as critical to its strategic objectives. “If it’s just marketing, let the CMO own digital for now,” noted Dyché. “As the rest of the organization experiences the benefits of digital, other decision makers will support digital and agree to sponsor its adoption.”
• There’s a proven comfort level with nontraditional C-level execs (i.e., more than just a CIO, CFO and CEO). These positions should be ones of considerable power and authority, not just figureheads. If existing managers continue to bicker over digital control but nevertheless can’t deliver results, it’s probably time to introduce new executive-level roles.
• Your company is comfortable measuring success using new kinds of metrics. Dyché cites a recent conversation with a CEO. “I asked him whether he considered getting a thousand new Twitter followers a win. I told him that if he didn’t know the answer, then he probably wasn’t ready to hire a chief digital officer.”
• You have strong C-level leaders who see digital as strategic to the business. “This is a key success factor,” explained Dyché. “When it’s time to execute, you need leaders who can secure the right resources and put together an action plan. And then go.”

Business Strategy Should Drive Digital Strategy

So what’s an executive with a digital vision to do? According to Dyché, the best practice is to align digital strategies with corporate business goals so that executives can align their departmental resources accordingly. This shifts the conversation with the chief digital officer to focus on collaboration and technological enablement, not just planning.

To align strategies, Dyché recommends using detailed strategy mapping to get the job done. Introduced in 2001 by Kaplan and Norton, developers of the balanced scorecard, strategy mapping provides a systematic way to bridge the vision and execution divide. “It helps companies get past ideation around digital and into the weeds of execution,” noted Dyché. “People can move from a rough idea of what they want to be as a company to actual initiatives that departments must collaborate around to deliver results.” And when that happens, CEOs will start to see value from digital capabilities.

Dyché says that strategy is ultimately about having a clear company vision and a series of objectives. She offers the example of “Drive customer retention” as a basic corporate strategy. She then explains that the strategy can be broken down into focus areas. “For instance, ‘Use social network outreach to drive digital outreach’ is a good example,” she says. “Then you can pinpoint specific initiatives, such as ‘Implement the digital wallet.’” Figure 1 shows how Dyché helped one of her clients link specific digital objectives to the company’s overall strategic goals.

[Download PDF to see Figure 1]

In this example, the digital wallet initiative becomes part of your overall digital strategy, and ultimately an enabler of the “Drive customer retention” strategy. As you develop your digital strategy map, Dyché recommends getting as specific as possible, creating digital wallet projects that must be completed, identifying associated metrics that accurately measure success, identifying the specific roles and skills needed to complete these projects, and determining where to source them.

“You must have a clear business strategy before you can determine the right digital strategy. Where you are going as a company should drive your digital strategy,” stated Dyché. “So go back to your strategy and business objectives, and then determine exactly how to use digital to meet them.”

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All C-Level Executives Have an Important Role in Digital

So who should own digital across the business? Everyone, said Dyché. “Incumbent C-level execs all have important roles to play in digital strategy and execution. It’s just a question of where you decide to start.”

So if a digital initiative is designed to enable customer service (for instance, “Increase customer satisfaction”), then the initial digital sponsor might be the vice president of customer support. Or if the priority is driving economies of scale and cost savings, then the CEO may be the initial digital sponsor. The business executives sponsoring each digital initiative should have accountability for its vision and its success.

And if their organization has a chief digital officer, they should count their blessings and collaborate with their new colleague. The CDO can work with each business area to help define their corresponding digital strategy all the way down to projects, resources and skill sets – and then coordinate with IT to execute. By collaborating on an aligned business-digital strategy, business, IT and digital executives can harness the latest technologies for true business innovation.

About the Author

Gwyn Finnell is a freelance marketing consultant and writer focused on the high-tech industry. With nearly 20 years of experience, she analyzes audiences and sales challenges, develops targeted messaging and compelling corporate stories, and creates marketing content that preps markets and motivates prospects to take action. She can be reached at gfinnell@indigowriting.com.