George Westerman is a research scientist at MIT’s Center for Digital Business, where he leads the center’s Digital Transformation research portfolio. He is co-author of the book Leading Digital: Turning Technology Into Business Transformation (forthcoming Fall 2014) and other publications that help executives build strategic advantage through technology.
Question 1: How do you define ‘digital strategy’?
“Digital strategy is the company’s approach to transforming the way it does business through technology. Unfortunately, many companies focus more on the digital than the strategy. They do a bunch of new digital things in different parts of the company. But they don’t have a lot of coordination or advance planning about how those things fit together. Digital strategy doesn’t have to be perfectly unified, but having some common vision and coordination is key.”
Question 2: How does your work intersect with recent Chief Digital Officer trends?
“I’ve done intensive research on digital transformation in recent years. I spend a lot of time working and talking with companies, helping them get their digital strategies straight. I believe that people in every industry sector need to pay attention — really pay attention — to the digital transformation that is going on.
This isn’t just something for fast-moving startups. Big companies are benefiting from – and sometimes losing to – strategies powered by digital technology. Things that were just dreams ten years ago – seamless global coordination, ubiquitous mobility, billion-person social media networks, massive data analytics, etc – are now a reality. If you aren’t paying attention, you can be certain that someone else in your industry is.
I believe this is one reason for the rise of the Chief Digital Officer concept. Companies need someone who can be the driving force in building and executing a great digital strategy – creating a unifying vision, coordinating across different interests, governing many initiatives in flight. In August I wrote an article for the HBR Blog Network titled ‘Should Your CIO Be Chief Digital Officer?‘ I believe it’s the job of the CDO to turn the digital cacophony into a symphony. Executive teams may or may not want to name someone to the official title of CDO, but they do need to put someone in charge of playing the role.”
Question 3: Can you tell us about some of your digital transformation research?
“Over the past four years, we’ve interviewed and surveyed more than 400 companies around the world to learn about their digital tactics and strategies. We identified a set of companies that we call ‘digital masters.’ On average, digital masters are 26% more profitable than their peers. These companies exist in every industry — companies like Nike, Caesars, Codelco, and Asian Paints.
Digital masters do two things better than other companies: identifying digital ways to change their businesses, and building leadership capabilities to drive transformation. And this is where chief digital officers can play a role. They can be digital transformation catalysts – building a strong vision, establishing governance, and engaging employees in the transformation.
Our new book, Leading Digital, which will come out in the Fall, describes what makes Digital Masters tick, and how you can turn your company into a Digital Master.”
Question 4: What was your initial reaction to the emergence of the chief digital officer role, and how has it changed over time?
“My first reaction to hearing about the CDO was ‘the last thing any management team needs is another C-level title.’ It took a while for me to come to terms with that fact the marketplace needed to create this role. Top executives at the world’s largest companies are not as digitally aware as they want to be, but they are starting to recognize the need to pay attention. They’ve been spending money on digital efforts and are not always happy with the returns on those investments. So, they’ve started to become more open to the idea.
Looking forward, I don’t know that the CDO role will still exist in ten years. I do know that it’s necessary today. The digital transition is happening fast, and it will need some leadership focus. Somebody needs to play the role of CDO, whether you give that person the title or not. But hopefully someday it’ll just be part of the DNA of every company.”
Question 5: What advice do you have for aspiring digital professionals?
“Know that your job is not really about ‘digital.’ It’s about making your company better. When talking about digital opportunities, make sure that you lead with fixing the business and not just doing cool digital stuff.
Once you head down this kind of path and get some traction, you’ll create a reputation as someone people can count on to help them think through new opportunities. The confusion and urgency around digital today is opening up all kinds of opportunities for young professionals to showcase their talents and accelerate their careers.”
For more information about Dr. George Westerman, visit the MIT Center for Digital Business or email him at email@example.com.