Digital Leadership Turns into Better Business Performance

We’ve been talking about how digital transformation is essential to success in the future. Harvard Business Review Analytic Services and Redhat recently published a study that shows digital leaders are more likely to be successful than followers or laggards.  Here are a few key points from the study:

• Digital leaders are more likely to have revenue growth over 10%
• Profit margins for digital leaders are greater than the average
• Leading companies will have a CEO who understands digital opportunities and threats, a CIO who is a master at digital, and digitally proficient leaders at many levels of the company
• Digital leaders will have a clearly defined strategy and vision

In the study, digital followers and laggards were only confident in their digital skills and knowledge 19% and 5% respectively, compared to 67% of the leaders who were extremely confident in their skills and knowledge.  When asked about barriers to developing their digital business, 57% of laggards cited lack of digital leadership as a cause, which was the most cited reason by laggards.

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For those companies who want to improve their digital leadership, the authors identify the following actions for CIOs:

• Create a digital advisory board made up of internal and external experts to advise the executive team.
• Learn to paint a picture of the digital future and use real examples
• Embed IT staff in the lines of business to increase two-way learning
• Create a common lexicon to increase understanding and improve communications
• Partner closely with key business leaders
• Establish formal and informal learning forums
• Embrace a coaching framework across the organization
• Identify and bring in outside experts to address specific trends for various parts of the business

A good way to start improving your digital leadership is to attend the upcoming webinar Rethink and Realign for Digital Transformation Success. While not tied to the study I talked about, this webinar will provide insights into many of the areas identified above.

You can get the full report on the enterprisersproject.com site.