The Key to Digital Transformation: Make It a Team Sport

Originally posted on Forbes.com

Digital transformation can give your company a massive boost, but it is a complex undertaking. You are using the latest technologies — which may be new to your people — to change many aspects (maybe all) of how the company does business.

The daunting news is that many projects fail to meet all their objectives. The good news is that there is a proven way to significantly raise your odds of success.

It’s by making transformation into a team sport — one that gets your digital tech leaders and business leaders collaborating closely at every step, from project design through execution.

A global study by the research and consulting firm Gartner, Inc. confirms what we’ve been seeing in our work.

What Gartner Found

In October 2023, Gartner reported on its survey of over 2,400 CIOs and other top tech executives in companies worldwide. A key focus was how closely these tech leaders work with their C-level colleagues on the business side. The survey showed that a substantial number, about 45%, are “driving a shift to co-ownership of digital leadership.”

Gartner also found that deeper collaboration correlated with better results from digital initiatives.

• Gartner’s analysis sorted CIOs into three categories. Traditional “operators” — the 55% who aren’t yet driving change — keep digital development and delivery mostly within the IT department. They work with their business execs only in limited ways, as required. “Explorers” are the CIOs reaching out to work together more, while “franchisers” are the most advanced. According to Gartner, “These CIOs co-lead, co-deliver, and co-govern digital initiatives with their CxO peers. Delivery responsibility is shared by IT and business staff working together in multidisciplinary fusion teams.”

  
  

• The difference plays out dramatically in results. At companies with CIOs in the most advanced group, where collaboration is the norm, “63% of digital initiatives enterprise-wide meet or exceed outcome targets.” At companies where CIOs work by the old operator model, the meet-or-exceed rate drops to only 43%. That’s a huge swing.

While the collaborative model doesn’t promise perfection, it gives you a definite leg up. So, let’s take a closer look at what “collaboration” really means — and how to achieve it.

How Mr. X Transformed a Company

Many companies think they have a collaborative process when they don’t. Executives from the IT and business sides of the firm meet periodically to discuss and challenge each other’s input.

But most work goes forward on separate sides of the wall, with documents and chunks of code passed between them. That’s not good enough. Time and again, we’ve seen slippages and misunderstandings sabotage a major project.

The leaders must constantly work in concert like coaches and players on a sports team do when they carry out a winning game plan. A case study in our book Demystifying IT illustrates this winning approach.

A midsize company in the energy trading business was due for a digital upgrade. The company earns its money by helping big institutional buyers get favorable electric service contracts. Yet despite having fairly up-to-date IT systems, it’d been doing it the traditional way.

A sizable team of traders communicated with buyers’ reps by phone and email … searched ever-changing databases of options offered by suppliers … and tried to put together optimum packages for each buyer. A few days of back-and-forth were often needed to create a deal that made the buyer happy.

In came a new owner/CEO committed to transformation. The trading process was gradually moved to a digitally smart platform on the web. Deals that took days could now be done in a fraction of the time, with much less human input and expense on the company’s part. Customers liked the setup. Simple word-of-mouth brought more business aboard. New features were added to the website, boosting the company’s revenue. Overall, the result was a success story that old-line competitors couldn’t match.

And how was it done?

As a team sport. Quoting directly from the book (which anonymizes the case study), a pivotal step by the owner/CEO was this:

He made the project a true collaboration. As the new CEO, Mr. X gathered his business leaders — the CFO, and the heads of sales, products, and operations — together with the IT leader. After assuring everyone that the vision was crystal-clear, he made it equally clear that everyone would be working together on it. [The company] was to be re-created as a platform company, and the business and IT teams would form a unified team of co-creators, interacting and exchanging information continually from day one forward.

For this firm, it all paid off in the stellar results we’ve described. Close collaboration can deliver other benefits, too. People from different disciplines working side by side may be more likely to innovate.

Generative AI is expected to be a game-changer, potentially impacting all parts of a company, so it makes sense to involve all parts in its application. Cross-functional teamwork also helps to build a more unified company in general. As consultants to Mr. X’s company, we were highly effective. We dealt with people who literally had their act together.

What Can Your Company Do?

Here are practical suggestions for making digital initiatives a team sport. Again, these are taken from Demystifying IT.

• Finding the ideal CIO can be a challenge. Ideally, you want a person with top-notch technical expertise and good people skills who understands business and is eager to take on new challenges. These unicorns are rare. The best bet is choosing someone with the technical chops willing to learn and grow in other areas. If your current CIO meets this description, stick with the person.

  
  

• Another option is to split the technical leadership, with a CIO focused on routine operations and company-wide efficiency measures, while a CDO (chief digital or development officer) partners with business leaders on ambitious growth projects. You have to ensure that the CIO and CDO are well-aligned with each other. The organizational framework might then look like this:

• But notice who is at the center of the action. The CEO must be personally in charge of digital initiatives. Only the CEO can mandate collaborative teamwork across the company. And only the CEO should take responsibility for initiatives that affect the well-being of the entire firm. This requires the CEO him/herself to be digitally savvy. An article in Harvard Business Review clearly stated the point. The CEO may not need to write code but should at least have a black-box understanding of how digital technologies work and the awareness to see how these technologies are changing the company’s industry.

  
  

• Finally, key people throughout the firm likewise need an expanded knowledge base. Business leaders must grasp what digital technologies can (and can’t) do. Tech leaders need to know more than the bare basics of how a business works. An easy way to build knowledge exchange is by having the respective leaders meet informally for lunches or one-on-one sessions after work, where each can learn about the other’s field. It’s like having a conversation partner to learn a foreign language. You pick up the language and the culture as well.

The effort is more than worthwhile. You are equipping your company to lead. And you will tackle digital transformation as a team — a formidable group that’s more than the sum of its parts.