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Proliferation of digital leaders brings confusion, power struggles

Clint Boulton | March 28, 2017
Are there too many technology cooks in your C-suite? If so, you'd better get them following the same recipes and make sure they report to the CEO -- or risk business deterioration.

 

Reach a consensus on an operating model

Salvation may lie in getting multiple tech stakeholders to rally around and align their departments to a single operating model, says Schrey. There is no definitive path to this. Rather, each department must understand the end-to-end processes unifying the parties and reach a consensus on responsibilities.

Another path to alignment includes elevating digital leaders to report directly to their CEOs. "In organizations where the CIO, CTO or any other digital leader has a direct reporting line to the CEO, IT/digital is perceived as more effective than in organizations where they do not," Schrey says. "This not only has an impact on the perceived performance of the organization, but also improves how much digital leaders participate in shaping the company’s business strategy, a goal desired by both business and IT."

Some companies appear to be catching on. Among the organization changes Coca-Cola announced late last week, the beverage maker said CIO Barry Simpson would report directly to President and COO James Quincey, who has been promoted to CEO, effective May 1. The company said such a move would "boost visibility and focus on efforts to digitize all aspects of Coca-Cola’s business."

Such alignment is essential if technology is going to work with the business to conduct a digital transformation. Industries remain less than 40 percent digitized on average, with 49 percent of leading companies investing in digital more than their counterparts do, McKinsey says.

The stakes are high and the potential corporate rewards are great. IDC estimates that the economic value of digital transformation is worth $20 trillion, or more than 20 percent of global GDP.

 

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