Why Your Board Is Critical To Digital Transformation Results

Taking it to the top yields better results

A recent survey conducted by the British Computer Society (BCS) on digital transformation maturity has found that when digital is a top 3 board-level priority, transformational results multiply considerably.

The survey, based on a model for assessing digital transformation maturity within my recent BCS book, Mastering Digital Business, was conducted in Q3 2017 and collected over 125 responses from global participants via various electronic and social channels.

The survey which looked across four pillars of digital transformation maturity (figure 1), including strategy and vision, people and culture, process and governance, and technology and capabilities, found the majority of companies were still in the early stages of their digital maturity based on a scale of early (1.0), developing (2.0) and maturing (3.0).

Source: “Mastering Digital Business”, BCS

Organizations were most mature in the strategy & vision pillar (1.81), followed by process & governance (1.68), people & culture (1.63) and then technology & capabilities (1.59). The top three most mature capabilities were digital strategy (1.85), digital focus (1.80) and investment (1.78). Conversely, the top three least mature capabilities were digital services mastery (1.57), disruptive technologies (1.59), platform business models (1.59) and leadership (1.59) reflecting slightly less maturity on the execution side when compared to the strategy side.

One of the most surprising findings of the survey was the correlation between board-level priority for digital transformation and the achievement of transformational results. The results when digital was a top 3 board-level priority were surprisingly higher than when digital was simply a top 3 CEO-level priority (figure 2).

Source: Digital Transformation Maturity Survey, BCS & Nicholas D. Evans

Of the 25.8% of respondents where digital transformation was a top 3 board-level priority, 48.0% stated they had already achieved transformational results. This was in contrast to the 45.4% of respondents where digital transformation was a top 3 CEO-level priority, where only 4.5% had achieved transformational results, and the majority of results were incremental. For simplicity purposes, in the context of the survey, transformational results were defined as business results achieved to date being characterized as “10x” types of results and incremental results were defined as “1x” types of results.

As might be expected for the 28.9% of respondents where digital transformation was not a top 3 priority, either at the board- or CEO-level, the results achieved to date were mostly limited (67.9%) or incremental (28.6%) in nature.

Insights from the Assessment

In looking for insights behind the figures, the results raised several interesting questions. Were the companies where digital transformation was a top 3 board-level priority more mature than the other groups? What were they doing differently in their approach to digital transformation? In what pillars and capabilities of the maturity model were they more mature or more advanced than their peers in achieving such a significant delta in terms of results achieved to date?

The survey found organizations that had digital transformation as a top 3 board-level priority (25.8%) were more mature across all pillars and capabilities, particularly within the strategy & vision pillar. When compared to the industry average for all respondents, they were particularly mature in digital strategy (2.48), governance (2.20) and investment (2.16). Thus, while most organizations were in the early (1.0) to developing (2.0) stages of digital transformation maturity, the top 3 board-level priority group were generally advancing from developing (2.0) towards maturing (3.0) (figure 3).

Source: Digital Transformation Maturity Survey, BCS & Nicholas D. Evans

The greatest deltas from the industry average scores were in digital strategy (0.63), digital services mastery (0.63) and platform business models (0.49) suggesting that the board-level priority group were well along in terms of practical execution of their strategy by employing platform business models – often described as “industry clouds” – as well as techniques such as agile and DevOps for bringing their new digital services swiftly to market.

In answering some of the free form questions in the survey, most challenges experienced or expected fell into the strategy & vision and people & culture pillars of the model. Some of the recurring themes related to gaining understanding and buy-in when leading digital programs and dealing with change management and coordination across various silos and initiatives.

Recommendations

While more data points will clearly be beneficial, some of the key recommendations from this maturity assessment are as follows:

  • Make digital transformation a top 3 board-level priority to provide the best means to achieve transformational results
  • Place emphasis of developing maturity related to the technology & capabilities pillar including digital innovation, disruptive technologies and digital services mastery
  • Explore platform business models since this had one of the greatest deltas between the transformational results group and the rest of the pack
  • Pay equal attention to maturing other capabilities including leadership, culture, and change management
  • Take a proactive approach to head off challenges related to understanding and buy-in at the board and corporate levels and resistance to change by employees and partners
  • Monitor your maturity levels and attempt to advance across all four pillars in the model

While there’s much debate about what drives successful digital transformation initiatives, and much debate about the level of emphasis on “people” versus “technology”, the findings from this assessment appear to suggest that both are essential ingredients.

Board-level prioritization of digital transformation is needed to create the impetus for change and to fuel investments; perennial skills such as leadership, culture and change management are needed to promote understanding and buy-in; and new digital capabilities such as platform business models and the creative use of disruptive technologies – to create compelling new value propositions for customers – are needed to underpin and enable transformative business results.

Nicholas D. Evans FBCS is the Founder of Innovators360 and was formerly Global Head of Innovation at Unisys. The award-winning author of “Mastering Digital Business”, one of Consulting Magazine’s Top 25 Consultants, and one of ComputerWorld’s Premier 100 IT Leaders, he has 25 years of consulting under his belt and is also a widely-recognized digital business speaker and author.