Driving Digital Transformation: Key Strategies for C-Level Executives in the UK

Amid economic turbulence and geopolitical tension, organizations worldwide are fighting to survive. Understandably, budgetary constraints are becoming their top priority with digital transformation often getting shelved. However, KPMG’s Global Tech Report 2023 has found that the implementation of novel technologies leads to improvements in performance and, what’s more important under current conditions, profitability. Below is the company’s breakdown of the domains that have yielded the most favorable outcomes over the past two years.

Source: https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/09/kpmg-global-tech-report.pdf#page=8

Interestingly, last year, as many as 77% of respondents expressed intentions to put their digital transformation journey on hiatus due to the unpredictability of the global economy. In contrast, in 2023 so far, 67% have achieved more, even with smaller budgets. In this article, we share essential tactics that top management reps can embrace to make their digital transformation initiatives succeed.

Driving Digital Transformation in the UK

Amazon Web Services (AWS) believes that successful digital transformation endeavors have the potential to generate a whopping GBP 413 billion in extra value by the year 2030. To put it in perspective, that’s nearly one-fifth of the UK economy.

As impressive as this figure is, it only relates to business entities, with greater scope available for digital adoption within the public sector, too. For example, in the first three years after the Cabinet Office had rolled out its all-out digitalization campaign, the UK government managed to capture more than GBP 3.5 billion in cost savings, meaning the taxpayer money went somewhere it was truly needed. If you’d like to learn more about the government’s involvement in digital transformation efforts, we suggest checking out the '22-'25 roadmap and overall strategy.

So, beyond the digits and decimals, what’s the real takeaway? It’s the narrative of a transformative journey, where a digital metamorphosis isn’t just about economic jargon but a force reshaping the financial landscape for the better—where pounds and pence translate into meaningful impact and progress for both businesses and the general public.

C-Level Strategies for Digital Evolution

The question is, how do you kickstart that impact as a member of the C-suite executive leadership? Read on to explore advice from some of the world’s leading research and consulting firms.

Adopting Agile Methodologies for Rapid Digital Evolution

Gartner believes that digital business execution requires an agile methodology presented in six key phases described below.

Source: https://www.gartner.com/en/information-technology/topics/digital-transformation

Start the process by picturing the program’s ultimate state. Some steps to be taken at this stage include arriving at a shared vision, securing necessary sponsorships, and articulating a transformative message while outlining a blueprint for the journey’s endpoint. With the envisioned destination in mind, establish a sequence for priority initiatives by considering your enterprise’s capacity to navigate the digital landscape efficiently. To do that, set up program assistance, define governance rules, and structure a financial delegation authority to lay a solid foundation for the transformative journey.

According to Gartner, transitioning from vision to reality implies iterative processes overseen by program officers and project leaders. These iterations should involve comprehensive risk assessments, thorough program reviews, and a detailed evaluation of predictive measures to ensure a responsive and adaptive digital evolution. You need to integrate each transformation iteration into the organizational fabric for sustained digital success and scrutinize change management strategies to align with the evolving landscape. At the same time, you must track ongoing enterprise performance and facilitate seamless service transitions if necessary, creating a resilient foundation for continuous adoption.

Culminate your efforts by closely examining outcomes to verify alignment with the original vision. This evaluation may prompt a new cycle, validating the ongoing relevance of the digital strategic vision. Assess how well your program portfolio advances, your investments play out, your objectives are achieved, and your performance metrics stack up against the baseline. Armed with insights from the journey, shift focus to adaptation and continuous improvement. Adjust plans and outcomes in response to lessons learned, seize opportunities for development and improvement, and determine ambitious targets for realization.

Skill Development for Executives

Trying to assemble a well-rounded team, numerous companies grapple with the temptation to overdo it when addressing the need for soft skills, as per KPMG. This is particularly noticeable in European companies, where non-tech professionals tend to be placed in C-level executive positions to oversee tech teams. While this approach may seem logical, it occasionally poses challenges.

Contrary to this, having a leader in the tech domain who not only comprehends the intricacies of technology but also appreciates the significance of soft skills is immensely beneficial. This balanced leadership approach acknowledges the multifaceted nature of a successful team, where technical prowess harmonizes with interpersonal traits.

That being said, practical skills should go hand in hand with technical know-how. Here’s a breakdown of the essential executive development features tech professionals should hone, as determined by KPMG:

Empathetic Skills

1. Ethical Understanding: Tech leaders need to navigate ethical terrain, making decisions that align with moral principles. This involves weighing data privacy concerns, ensuring cybersecurity, and championing responsible tech practices.
2. Creativity and Innovation: Encourage your team to think outside the box. Foster an environment where brainstorming and creative problem-solving are not just encouraged but celebrated. Practical innovation leads to tangible solutions.
3. Collaboration: Establish collaborative workflows. Practical cooperation involves setting up communication channels, agile project management tools, and team-building activities. Create an atmosphere where different perspectives are valued, fostering a collaborative spirit.

Commercial Skills

1. Strategic Thinking: Align your tech initiatives with the overall business strategy. Practically, this means breaking down long-term goals into actionable steps. Regularly revisit and adjust your tech roadmap based on the evolving needs of the business.
2. Technical and Digital Literacy: Stay hands-on. Regularly engage with the latest tech tools and trends. Attend workshops, webinars, or even coding sessions to keep your skills sharp, ensuring you can speak the language of your team and stay informed.
3. Leadership: Lead by example. Practical leadership involves setting clear expectations, providing constructive feedback, and acknowledging achievements. Understand the strengths and weaknesses of your team members to delegate effectively and foster a positive work environment.

For digital transformation projects to truly succeed, you, as an executive, should take a hands-on approach to address collaboration and cultural weaknesses. Implement practical solutions such as regular team-building exercises, open forums for communication, and continuous learning opportunities. These efforts lay the groundwork for a tech-savvy, collaborative, and resilient team ready to tackle any challenge.

Safeguarding Digital Transformation

But no managerial skills—soft or hard—will help your enterprise if it fails to safeguard users and their data. Organizations recognizing the symbiotic relationship between robust security measures and competitive advantage are gaining ground. A notable 63 percent of entities told KPMG that fortifying cybersecurity not only enhances their ability to provide a customer experience that breeds loyalty but also accelerates digital transformation initiatives.

This newfound emphasis on cyber resilience is evident in technology functions, where innovation goals now prominently feature strategies to automate, streamline, and seamlessly incorporate security into core business operations. The challenge lies in accomplishing this without hindering productivity—a delicate balance cybersecurity teams must strike. The integration of security measures is no longer an afterthought but a vital element built into digital transformation projects from their inception.

Embracing a “security by design” principle is gaining traction, with 62 percent of businesses attesting to its efficacy in boosting the success rates of transformation programs. This proactive approach is even more pronounced in certain countries, with figures soaring to 74 percent in Brazil, 83 percent in China, and a remarkable 88 percent in India, according to KPMG’s findings.

Buoyed by these successes, organizations are eager to amplify their proactivity in integrating trust, security, privacy, and resilience into technology rollouts. This proactive stance not only aligns with budget constraints but also acknowledges that the costs associated with cybersecurity and privacy can surpass those of technology development. Recognizing that addressing cybersecurity issues individually is costly and inefficient, the emerging consensus is that security should be an inherent aspect of the product itself. However, this aspiration is hampered by a skills shortage, particularly in implementing cybersecurity across diverse software and platforms.

Measuring Success: KPIs and Metrics for Digital Transformation

Effectively gauging the trajectory of a digital transformation proves surprisingly challenging. Without the all-encompassing tracking and measurement of outcomes, leaders grapple with controlling and adjusting performance and ensuring that ongoing changes yield tangible value.

The crux of this challenge lies in discerning what to measure. As per McKinsey, digital transformation’s key performance indicators (KPIs) generally fall into three categories:

• Value Creation: Digital solutions invariably target specific operational KPIs, often with a direct translation into financial benefits. Success hinges on locating and prioritizing these pivotal metrics that underscore the monetary value created through the transformation.
• Team Health: The pace of many digital transformations falters due to understaffed teams, the absence of an agile methodology, or the unavailability of essential capabilities like product management and UX design. Notably, in McKinsey’s experience, high-performing teams can exhibit up to 5x the productivity of their low-performing counterparts, emphasizing the critical role of team health in the transformation journey.
• Change-Management Progress: Metrics in this category gauge the advancement in building new capabilities and the overall transformation state. Questions such as the mobilization of teams, engagement levels, seamless technology adoption, and skill development come to the forefront. Striking a balance between aspiring for perfection and acknowledging incremental progress proves essential in effective change management.

In essence, the success of a digital transformation hinges not only on the changes implemented but also on the ability to measure, adapt, and optimize continuously. Leaders must adeptly navigate these KPIs, recognizing their interplay.

The Role of C-Level Executives in Shaping Digital Future

Ernst & Young says that at the epicenter of the digital transformation stand the Chief Information Officer (CIO) and Chief Digital Officer (CDO), who are pivotal figures in the C-suite hierarchy. Initially marked by tension and rivalry for influence, funding, and credibility, these roles are undergoing a metamorphosis. The traditional alignment of CDO with marketing and CIO with finance gives way to a unified role—the Chief Information and Digital/Data Officer (CIDO) or the emerging Chief Business and Technology Officer (CBTO).

The CDO’s purpose is evolving, and some companies may retain both roles if the CDO has garnered the CEO’s confidence. However, the coronavirus pandemic has allowed progressive CIOs to switch to digital, strategically reshaping technology operations. The pace of this evolution varies across industries, with healthcare catching up and the consumer sector leading the charge.

The most impactful CIOs of the future will excel in locating and embracing emerging innovations while effectively managing the day-to-day tech operations, Ernst & Young believes. To achieve this, they must strategically delegate responsibilities, freeing up time for higher-impact roles. Addressing technology debt, particularly legacy systems, is becoming a priority for visionary CIOs, paving the way for innovation. In turn, collaborating with the right partners will allow CIOs to navigate complexities efficiently and focus on overarching strategies. Last but not least, successful CIOs will define roles and responsibilities in cooperation with other executives, retaining ownership of the technology enterprise and acknowledging the evolving role of the CDO as a trusted advisor with a focus on customer interests.

As for other C-level management positions, Harvard Business Review has analyzed how they have evolved over time in order to meet modern digital transformation requirements. Here are some quick takeaways:

Chief Technology Officer (CTO)

Once solely tech experts, CTOs now lead company-wide digital transformations, crafting strategies and fostering a culture embracing tech imperatives.

Chief Marketing Officer (CMO)

CMOs have shifted from mass marketing to targeted, data-driven strategies, juggling real-time KPIs and ensuring consistent messaging within dynamic communication channels.

Chief Executive Officer (CEO)

CEOs navigate a changing landscape, setting new targets, ensuring alignment, and championing a transformative culture crucial for digital success.

Board of Directors

Traditionally overseeing compliance, boards now embrace long-term innovation, risk mitigation, and continuous learning for sustained success in the digital era.

Chief Financial Officer (CFO)

CFOs leverage technology for streamlined financial processes, evaluate tech investments, and redefine their role in shaping the company’s strategic vision.

Chief Human Resources Officer (CHRO)

Evolved CHROs drive the future of work, digitizing HR in general and tech talent acquisition, management, and retention in particular. They serve as partners for innovation and cultural transformation.

Start Your Digital Transformation

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