“What makes a digital transformation organizational leader”. I’d like to talk about the second condition of a dedicated digital transformation organizational leader: acquiring and organizing talent to drive digital transformation (DX) success.
Common approaches and limitations of digital transformation organizational charting
The most common way for companies to drive DX is to create an organization of digitally literate employees. In this case, this tends to be members of the existing IT department. However, if you can’t find enough people internally, you may need to hire outside experts.
The importance of selecting a head of digital transformation and the role of external experts
The decision to hire an external expert is not an easy one, but it can be one of the surest ways to ensure the success of your DX. External experts should have a basic understanding of the IT environment and be experienced in projects that utilize key DX technologies such as AI, big data, cloud, IoT, etc. Of course, they should have at least 10 years of experience in their field.
Limitations of traditional organizational leaders and the need to gain expertise
In Korea, many mid-sized and large companies rotate their leaders to gain experience in different areas. For example, a leader who was in charge of business unit A may be in charge of business unit B as needed. In these companies, the head of the DX organization is likely to be a leader who has been successful in the existing organization. From a hiring decision maker’s perspective, there is a need to develop the next generation of executives, and they may feel that they are capable of performing the core tasks of DX because they have done so in a variety of organizations.
However, these leaders are clearly limited by their lack of expertise. Another option to overcome this is to bring in experts. This can be done by hiring a professional with experience in an IT company, but it’s important to make sure they have development experience. However, sometimes outside companies that don’t come from an IT background can get it wrong and hire the wrong people, especially if they don’t understand the business outside of IT. Choosing the head of a DX organization is never an easy decision.
Digital Transformation Organizational Leadership Challenges and Solutions
DX is one of the fastest-moving fields in the world, and its core technologies are subject to very rapid change, even in IT. What happens when you put DX in the hands of someone who is not familiar with this environment? Let’s look at a few aspects.
The first is if the DX practitioner is technically better than the director, i.e. the director is a non-technical person. In this case, the practitioner will have to focus on training to understand and convince the manager. However, the problem is that the practitioner may miss a critical execution time in the process of convincing the manager. If the manager is willing to learn and knows exactly what they don’t know, the situation can be better. In many cases, however, the director provides inappropriate feedback to the practitioner, which can end up confusing the DX direction.
The second is when both the DX lead and the practitioner lack specialized technical skills. In this case, it is difficult for anyone to take the initiative. The result is a waste of time and money that may end up going nowhere. In this case, enlisting the help of external experts may be a more realistic option. However, this has the limitation of not building in-house capabilities.
Build the ideal leadership for digital transformation success
Finally, there is the case of two organizations running in parallel. You may already have a dedicated IT department within your company. In this case, the IT organization may be lukewarm to the DX project, or there may be competition for the position. In this case, the head of the new DX organization may not have a role in the organization, or they may end up doing similar work to the existing IT organization. The result is a lack of originality in DX, which can lead to failure.
Develop strategic leadership to drive digital transformation
DX is one of the fastest-moving areas of IT, so it’s important that your DX leader is comfortable with change. If possible, hiring an external, proven expert is probably the smartest choice. But hiring externally is not enough. It’s also important to work with the existing organization, so it’s best to identify employees who enjoy change in the IT environment and have the ability to learn IT and put them in leadership roles. This way, with enough support from management, you can achieve good results in DX.
To summarize, DX success requires expertise on both the practitioner and leadership side. If you’re looking to build a new DX organization at your company, make sure to clearly explain the situation to management and emphasize the need for internal or external experts. This is the surest way to make DX a success. Executives should also keep this in mind.