Why CEOs Should Lead Digital Transformation

A successful digital transformation can be the difference between a flourishing business and one destined to fade into obscurity. On this point, there is a growing consensus across the tech sector and the wider business world. However, confusion still reigns as to who should lead a digital transformation, should it be the CIO, the CTO, the CMO, the CEO, or all the above? Here we look at why the most successful transformations are often led by the CEO.

Before we delve into why the CEO is the natural leader of digital transformation, it's important to note that a digital transformation that is to succeed in the medium to long-term requires the buy-in of the whole C-suite. Digital transformation, by its nature, affects the whole business and without encouragement, promotion, and strong leadership from company executives, is either unlikely to happen at all or doomed to failure. 

Despite the important role of all company executives in embracing a culture of innovation and driving digital transformation, leadership must come from the top. There are several significant reasons why the CEO is best equipped to lead digital transformation, ranging from the authority inherent in the title, to the typical CEO's broad skillset. Let's look at each in more depth. 

The CEO is a Blend of the C-suite

While there are convincing arguments for each member of the executive suite to lead digital transformation, none are quite so well qualified as the CEO. CMOs may be the fount of all knowledge on customer needs and behaviour, CIOs are undoubtedly the most likely to roll it out in practice and have a deep understanding of the business's digital infrastructure, and CTOs are a unique blend of the two, with an eye for new technology into the bargain. Yet none have the CEO’s encompassing view of the business.

CEOs are in many ways a blend of their colleagues in the C-Suite. In their capacity as general overseers of the day-to-day running of the business, most CEOs build up at least passable knowledge of each department and its strengths and weaknesses. This knowledge is crucial to a successful digital transformation, which requires careful planning of the changes needed for every aspect of the business, as well as analysis of the unique challenges each department might face.

Of course, no CEO can do so alone—any undertaking needs the input of the other key executives and their expertise, but with their uniquely holistic view of the business, CEOs are simply best placed to lead the process.

Only a CEO Can Change Organisational Culture

A successful digital transformation is rarely a straightforward undertaking and often requires changes to deeply ingrained cultures within the business. To give an example, digital transformation often requires crossing departmental silos: IT have to work with marketing, who have to work with finance, who have to work with operations. Depending on the business in question, inter-departmental collaboration may not be commonplace or come naturally to employees. Step forward the CEO, who, by virtue of being at the head of the business and largely independent of any one department, is perfectly positioned to encourage collaboration and new relationships between usually siloed departments.

Human beings and, by association, businesses are naturally change and risk-averse. Whether it’s the IT team attached to dated processes, or finance eternally bound to 2014’s software, organisational resistance to change can present a challenge to digital transformation. Even the clearest digital strategy will fall flat if your staff are unprepared to embrace it, and without buy-in across the business, digital transformation is unlikely to fulfil its potential. Who better than CEOs, with their broad remit and authority, to foster a culture of innovation across the business and empower teams to push the boundaries and create new rules.

A CEO Can Manage and Rank Competing Priorities

We’ve all attended interdepartmental meetings in which each department leader puts forward a different business priority, often whatever the priority is for their department at the time—and digital transformation is no different.

Digital transformation affects every organisation differently, but it tends to create opportunities or cause disruption in three key areas of the business: operational performance, digital products and services, and customer service/engagement. For a successful transformation, it’s crucial that key needs and opportunities in each of these areas inform where investment in technology goes. To do that effectively, the decision maker needs to be impartial with a clear vision for the company as a whole. However grand their vision, a CMO is always likely to prioritise customer experience, just as a CIO is likely to prioritise process, whereas the role and perspective of a CEO lend themselves better to a dispassionate assessment of what’s best for the business.

CEOs Carry the Authority to Delegate

This may sound counter-intuitive given this article is about why CEOs should lead, but the beauty of a CEO leading the process is their ability to delegate to an “orchestrator”. In a growing number of companies this takes the form of a CDO (Chief Digital Officer), but regardless of who is chosen, what’s important is that they’re empowered to implement strategy and enforce change where it’s needed.

CEOs naturally carry the authority to empower whoever is chosen to compel change across the organisation in their name. A CEO’s authority over the other executive suite members makes their chosen delegate less likely to encounter friction from heads of department during the transformation process. To illustrate, consider the potential clash of wills were a CMO to try and implement sweeping changes in IT. With the both the CMO and CIO on an equal footing in the business, the potential for disagreement and subsequent delay is far more pronounced than if the agent of change is directly mandated by the CEO.

While a successful digital transformation requires the input and collaboration of the entire C-suite, it’s the CEO who is best equipped to lead. CEOs can provide a strategic framework, break down the appropriate boundaries, and engender cultural change in a way that would be difficult for other executives. After all, how better to enter a bold new phase in a business’s development than through inspirational leadership?

Digital transformation is a fundamental part of modern enterprise, and businesses can’t risk falling behind. To help you make the right technology decisions to enable digital transformation, download our guide to digital technology evaluations.