Digital CEO: Leadership in the Time of Cholera

[This post was originally published in Spanish ]

From a variety of trends that I spotted in the end of 2015 and the beginning of 2016, there is one that stroke me the most, and it comes from Charlene Li’s blog post on Altimeter: “Digital Governance becomes a necessity”.

“While terribly mundane, many organizations will reach a breaking point in 2016 where the morass known as digital/social/mobile will require a wholesale review of how they work with each other and across the enterprise. Central to this effort will be the rationalization of the digital C-Suite, identifying the roles and digital responsibilities of the CEO, COO, CMO, CIO, and the need for new positions like the Chief Digital Officer and Chief Experience Officer.”

Couldn’t agree more. 2016 is the year in which the organisations will no longer be able to omit the fact that digital has considerably changed the way customer relationships are generated. And this has clear consequences for the corporate governance model: Is the figure of digital leader necessary, or is it the CEO him- or herself who will lead the digital evolution of the company? Can we even allow ourselves a break before initiating the digital transformation process within our company?

Some of the following facts demonstrate that the change has ALREADY happened and that this 2016 is the year to face the strategic impact of “digital” across all verticals:

• Pure mobile users surpassed pure desktop users in 2015 (source: ComScore)
• Smartphone penetration is total (source: IAB)
• Having a mobile phone and using social media becomes virtually the same thing (source: ComScore)
• What Google doesn’t know about you, Facebook does (source: ComScore, Statista, Sitepoint)
• Games are most valuable content for mobile (source: eMarketer)
• Video content consumption is rapidly growing via mobile (source: eMarketer)
• The sharing economy and the “unicorns” have already altered many industries (source: Bloomberg, Fortune)
• Applied artificial intelligence can change the buyers’ decision making process (source:Phys.org)
• Virtual reality has its debut in 2016 (fuente: IBT)
• Customer-centric approach across platforms becomes a must (fuente: AOL)

In my opinion, there are no excuses to postpone this challenge. The facts just mentioned leave little room to reflect on this opportunity. It seems that reflection is more related to “How” than “What”, and perhaps there is some room to think about the “Who”.

Users are much quicker than organisations when adopting new digital trends. The access to any innovation or tendency is now democratised, mostly due to the fact that people are no longer afraid to test or even change their service provider. Moreover, there is a new emergent trend that decades ago was one of the biggest barriers to allowing new competitors into the industry: the trust. Nowadays, new things are “cool” and the usual is just that, “the usual”. Is consistency no longer attractive? Every time there are more incentives for a big corporation to become startup alike. And startups find their differential factor by positioning themselves against big companies. This enables the flourishment of many entrepreneurship endeavours (it is probably easier to generate initial demand than in the past), simultaneously originating inflationary pressure of innovative proposals in big organisations. A complicated challenge indeed.

The CEO of a traditional vertical leading organisation is faced with the challenge of managing continuous innovation, simulating “lean” models, startup cultures, … and, at the same time, they must nourish the most powerful stakeholders with positive news: investors, analysts and shareholders. Tough work, right? No one said it would be easy and perhaps nowadays it is even more difficult than a decade ago.

A leader of a contemporary organisation is faced with a variety of challenges that I would like to summarise according to 3 digital dichotomies:

1. Results or Trends

Are CEOs willing to give priority to the relationship with investors, analysts and shareholders or to the rhythm that marks the trends and user behaviours? Should they pay attention to the results of each quarter or changes in user behaviour?

The work of a CEO today is somehow more similar to being a servant to two masters than placing together all the pieces to achieve the necessary strategic vision. I am not jealous of their situation. The complexity of leading the changes that happen every 12 months or less makes it each time more complex to sketch a desirable future situation. Who would imagine that in less than 5 years the majority of the population would have Internet connection in their pocket? Or that purchase decisions would come from a 5 inch device? And it is true that perhaps the results of these purchases still seem unconvincing to the quantitative blindness of some analysts. This is when a CEO finds him- or herself at the crossroads: follow traditional business figures to convince analysts and investors, and trust their own gut to opt for the digital evolution of their business. Perhaps there is room to unify both quantitative approaches.

Takeaway: It seems like CEO’s task is to show each audience what they want to see. And at the same time extract an educational element out of the results and their digital component. The problem arises when you don’t know how to measure the global digital contribution to your income statement. The challenge lies in measuring the implication of your digital contact area and its partial contribution to the user’s decision-making process. Not all purchases are digital, and not all sales are analogical.

2. Digital Leadership or Natural Leadership

Who should be setting the rules in this new environment? Should CEO channel all their attention to managing digital evolution, or should they delegate this responsibility to a new digital leader?

It has never been easy to make decisions in the times of uncertainty, let alone moments when changes happen at such an incredible speed. Perhaps the best way to organise this amount of uncertainty is to designate a Digital Strategist and make this individual fit within the “business as usual” governance model under another person’s control. Are we then creating dichotomous organisations? Organisation that have both “digital” and “nondigital” individuals. I have always considered this model to have collateral damage and perhaps it better suits transition periods.

Takeaway: The best solution might be to define a Transition Manager. A Digital Leader (CDO, Chief Digital Officer | DTO, Digital Transformation Officer), a person CEO could rely on when defining the path to reach this desirable future situation. And once the process is finished? Then it is a completely different matter.

3. New roles or new processes

So this new Digital Leader should run value proposition, distribution model, data intelligence, marketing, development management, results control, … ? Doesn’t this imply creating a new parallel structure with digital suffixes? Digital Sales, Digital Marketing, Digital Business Intelligence, Digital IT, Digital Controller, ...?

If solving the puzzle of digital evolution leadership is already a difficult task (and we didn’t even include the question of looking for this CDO inside or outside the company), we can now ask ourselves what the areas of responsibility of such a leader should be. Generally, duplicating a new structure with digital responsibilities tends to result in a loss of talent. Moreover, searching for such talent may generate unnecessary rivalry between the new ones and the old ones. If it is already difficult to govern different silos of a big organisation, let’s add the complexity of making old and new talent live together, in an organisation that is in the middle of the process of redefining its own culture.

Takeaway: Would it make more sense to create collaborative spaces with different leaders on a project basis? We are at the threshold of a shift between leading according to departments or programs and deliverables. Mixing talent and generating collaborative spaces seems to be the only viable option. Besides, leaders have to be properly defined. And leading doesn’t mean dismissing the other. My personal opinion is that digital revealed a leadership gap in many organisations. And my advice is that leading in the times of uncertainty requires specific profiles.

Some months ago watching a TED talk about neuroplasticity made me reflect on the following:

Things are changing, and some facts are a clear demonstration to that, such as the following statement at the World Economic Forum 2016 conference (by the way, the tweet author is the CEO of SalesForce):

This new environment is a funny one and fortunately there are no answers to all of the questions. But there definitely is a lot of uncertainty. Who said it wasn’t there before? Perhaps now it is more visible. The challenge lies is accepting the impossibility of controlling the environment - it was never possible; the solution consists in having a vision and a method in the complete uncertainty environment.

And there will always be open-ended questions.

Acknowledgement: To Tania Asa for your ideas + inspiration shaping "CEO digital:liderar en los tiempos del cólera" into this post.

[This post was originally published in Spanish on DIVISADERO blog]