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Digital disruption is coming but most businesses don't have a plan

Thor Olavsrud | May 2, 2017
A study by Harvard Business Review Analytics Services finds that whlie most companies believe digital disruption is already or soon will disrupt their industry, fewer than half have enacted a digital strategy.

Whether organizations fell in the digital leader or hybrid buckets, the CIO was the next most likely candidate to lead digital transformation efforts. For non-digital organizations, the CIO was the third-most-likely candidate, after no one at all.

Leading the effort or not, Lundberg notes that CIOs have a central role to play in any digital transformation. And, she says, especially in hybrid and non-digital organizations that lack a visionary CEO, assertive CIOs have the opportunity to chart the future for their organization.

"CIOs sometimes get stuck in this idea that if they don't have the top-down blessing to go forward, they can't do anything," she says. "That's not true. Find an ally in the business. CIOs have to be more assertive. This is going to change our model for how you interact with your customers. Get some data around that from competitors or other industries. The really good CIOs are good at painting a picture: 'This is what the future could look like. Here's how we're going to get there.'"

 

Microsoft is in the digital transformation biz

For the past several years, Microsoft has been undergoing its own digital transformation. It once saw and positioned itself as a vendor of software and hardware products, says Anand Eswaran, vice president, Worldwide Services and Digital, Microsoft. But best serving its customers meant it could no longer focus on maximizing the number of licenses sold — while good for Microsoft in the short-term, that wouldn't provide the best benefit for customers. Instead, Eswaran says, Microsoft decided that its focus must be helping customers achieve the best outcomes.

"Forty percent of the respondents talked about customer experience being at the heart of everything they wanted to do," Eswaran says. "It was the same way at Microsoft. We needed to put a consistent customer experience at the heart of what we do. How do we enable them to be more successful?"

A great deal of that effort involved completely rethinking how the company approached how it worked on the back-end. It had significantly fragmented data islands from its many lines of business that had to be unified to create a singular view of customers from a data standpoint. But, while challenging, that was the easy part, Eswaran says. Changing company culture to align with the new vision was the hard part.

"The amount of work we've done on digital culture is at the heart of why we've been successful," Eswaran says.

"The first step to changing culture is acknowledge where you are," he adds.

Microsoft, he acknowledges, had an insular and fragmented culture with highly territorial businesses. The new vision required Microsoft's lines of business and functions to adopt a "boundaryless" approach and a shared sense of accountability for customer outcomes. From the executive staff to entry-level employees, the company had to get on the same page about working collaboratively to build on others' ideas and success. That started with CEO Satya Nadella and the shared leadership team (SLT), which had to create a new common score card and set of metrics for everyone in the company. Compensation, rewards and recognitions had to be tied to those principles.

 

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