Wednesday, September 21, 2016

Breakthrough or Buddy-up - Two Strategies for Chief Digital Officers

Growth of the Chief Digital Officer (CDO) role has been incredibly rapid over the last few year, reflecting the increasing importance of technology to organisational success and survival.

However not all CDO roles are created equal, with enormous variation in their responsibilities, resourcing and capability to generate change, in the form of digital transformation, in the organisations they serve. Some have direct responsibility for business lines and IT teams, others serve primarily as advocates and influencers in the C-suite, with little in the way of direct reports or operational responsibilities.

The candidates appointed as CDOs have also vary enormously in background, some from 'pure' IT careers, others from a mix of IT and business and still others from business-based disciplines.

 An additional complication is that due to there being so many new CDO roles emerging, in many cases both the organisation and candidate are new to the role. This means the definition of the role might not be as clear as for well-established and understood roles, organisations may be less clear on what characteristics they require.

 A new CDO must also find their way and negotiate their position in the C-suite in a game of reverse musical chairs, where other executives may be looking for ways to gain advantage from the new seat and player at the table.

(Graphic courtesy of CDO Club.
Keep an eye out for the Chief Digital Officers Worldwide update for 2016)

In many cases CDOs have been external hires, including from international sources. Some public sector organisations have brought in experience from the private sector, though I've not seen the reverse as yet.

This can add additional complexity to the role. An 'outsider' brings their own cultural and workplace practices, which is often an advantage in a CDO role, but can require a significant adaptive phase for both the Officer and organisation. New CDOs from different environments can require some time to build the relationships and alliances necessary to achieve results and to learn how to navigate an organisation's formal and informal decision-making processes.

When it comes to performing the role successful, there's a spectrum of strategies available to a new CDO.

At one end of the scale there's the 'breakthrough' approach, where the CDO mandates and forces change on an organisation.

At the other end is the 'buddy-up' approach, where the CDO functions as an expert adviser and councillor, supporting colleagues and staff to make change themselves.

I've been fortunate enough to observe both approaches in practice, witness the comparative successes and failures over time.

In this post I wanted to provide a little insight into how these strategies can, and are, applied, the potential outcomes for the choice a CDO makes and what organisations should look for when hiring the right CDO for them.

Looking at the 'breakthrough' approach first - in its purest form this is a 'no holds barred', even violent, way to stimulate organisational change by actively pushing through any barriers to digital transformation.

It requires a forceful and driven CDO with massive resilience who is prepared to take on personal consequences for their strategic approach. Within an organisation it often results in adversarial situations where a digital transformation is imposed on unwilling business and IT areas, ending careers and bruising many survivors.

Internationally many CDOs who have adopted this strategy to a significant extent have had quite short tenures, coming into an organisation and driving digital transformation relentlessly for a year or two, then either moving on to the next appointment or requiring a personal break to rebuild their resilience.

It is not a tactic for executives who wish a long-term career with a specific organisation, or even in a specific industry or country, as the crash through tactics are not congenial to building good long-term relationships and alliances.

Used strategically this approach can break down long-term barriers to change and innovation, squeeze out old-fashioned and outdated thinking and renew an organisation to move forward in a more cost-effective and digital way. Some organisations may require this 'shock treatment' to shift from their current track to a more sustainable one, whereas the buddy-up approach would not provide significant impetus for them to transform.

Used poorly, this strategy can alienate potential allies, damage competent individuals and generate a 'winners and losers' culture, where people feel forced to choose sides. Any resulting digital transformation can be short-lived, reliant on the CDO remaining in their role, with other executives and middle-managers rolling back to their comfort zone after the CDO is gone.

A common tactic for individuals who oppose this approach is to simply wait until the CDO moves on, although sometimes repairing the damage a breakthrough strategy does to trust and respect within an organisation can take years.

The buddy-up approach is far more collegiate and is built on alliances and expertise rather than direct power and force. This strategy is better attuned to patient executives who are willing and able to spend the time building trust and leading executives and staff to a place where they feel empowered to choose adopt digitally transformational changes, rather than having these changes forcefully imposed on them.

The approach builds good long term relations and suits executives who wish to build a long-term career in an organisation or across a sector. It works well in situations where a CDO has little direct power (direct responsibilities or budget) but is a respected key influencer, with peer-level access to others in the C-suite.

The speed of digital transformation achievable using this strategy tends to be far slower, particularly in the initial stages, than via the more aggressive breakthrough approach and may not suit organisations that require a rapid transformation. However, in the longer term, the pace of change can accelerate rapidly as it no longer must be solely driven by the CDO but has become embedded in how the organisation operates.

For organisations with firmly bedded down cultures, there's a risk that the buddy-up approach will get lost in the mix, with the CDO's efforts absorbed into the organisation rather than propagating change. We've seen this many times in the past, where the introduction of a new approach becomes so diluted within the existing culture that, like a drop of ink in a glass of water, it vanishes without a trace.

Used strategically the buddy-up approach is very effective at bringing the organisation with a CDO, generating a deep-rooted top-to-bottom change in culture over time. By avoiding adversarial and 'winner take all' situations, staff across the organisation retain their unity in being on the same team without aggressive competitive, or even bullying, behaviours.

Used poorly the buddy-up approach can be ineffective, with the CDO ignored, or their efforts co-opted and absorbed into business as usual without the level of digital transformation required by an organisation. Also, due to a slower ramp up as trust relations are built, the approach can be too slow for organisations facing imminent threats to their survival.

Fortunately many CDOs understand that their role involves using a blend of the strategies above, based on their resources, influence and environment. Knowing when to apply a breakthrough strategy rather than a buddy-up strategy is the real art of being a CDO, and organisations should be careful to select executives who have demonstrated a careful balance of both, even in situations where one strategy needs to be dominant.

The real danger for organisations - and CDOs - is when they rely too heavily on either the breakthrough or buddy-up strategy.

An over-reliance on breakthrough risks any digital transformation successes being short-term, poorly embedded in an organisation and leading to a 'pushback' that can damage digital initiatives in the organisation for years to come.

An over-reliance on buddy-up can conversely result in a failure to implement the digital transformation required, leaving an organisation in a worse position as its rivals and markets shift.

When hiring CDOs, it's important to not just look at their past short-term successes in transformation, but also their record of fostering enduring digital transformational change and strong relationships.

Those who rely too much on breakthrough tend to have shining successes to their credit, but poor senior relationships and a trail of past engagements where organisations cannot demonstrate significant lasting business value from the CDO's efforts.

CDOs who prefer buddy-up approaches can appear to have less spectacular careers, with most of their successes shared, but come well-recommended and respected. Again it is important to consider if their past engagements have resulted in lasting business value to the organisations they have served.

For those aspiring to be a Chief Digital Officer, it is important to develop the capability to apply both breakthrough and buddy-up strategies, and particularly the emotional intelligence to know which is appropriate to apply. Having experience using both strategies effectively is of enormous benefit when seeking a CDO role.

It's also critical for those stepping into a CDO role to understand and negotiate the use of breakthrough and buddy-up strategies, to ensure that the CEO, Board and other executives understand why the CDO is taking a particular course at a particular time.

A CDO more experienced with buddy-up strategies will need to communicate clearly why the alliance approach to collective change is being applied when working in an organisation that took on a CDO to aid in a rapid digital transformation.

Conversely a CDO selecting breakthrough tactics will need to make it clear why they are choosing an aggressive approach to digital transformation to avoid alienating other executives and staff who may feel trampled or excluded, and losing their mandate before the transformation is embedded.

Most importantly for any prospective or new CDO is the ability to know your own strengths and weaknesses, and seek opportunities where your personal attributes are beneficial to your role.

Using myself as an example, in my roles in large organisations I've often strayed too far into breakthrough territory, reflective of my past experience in business startups, where speed of outcomes is paramount over relationships or process. I've also had several roles where breakthrough was the only viable strategy due to the timeframe and environment.

I have learnt from others, who have mastered the approach, to apply more buddy-up tactics - particularly during my experience in government, where strategic alliances are essential to foster deeper and longer-term digital transformation.

However my natural inclination is more towards breakthrough, and I perform better in environments where, on balance, I can use this strategy more often.

Others may find they naturally prefer to apply buddy-up strategies, or are evenly balanced between the two.

Whatever your personal preferences, you'll likely do best in a role that reflects how you operate.

However regardless of whether you're applying breakthrough or buddy-up strategies, keep in mind the ultimate goal - to redesign organisations to be successful in a digital world.

Organisations live or die by their people, and selecting the right match of CDO and organisation, and the right blend of buddy-up and breakthrough strategies is essential for their digital transformation and success.

3 comments:

  1. This is an interesting discussion Craig and, as you say, reflects much on personal leadership style. I am personally very dubious of the breakthrough approach in government. Public servants have well honed skills at 'waiting out wankers'. Smile and wave boys, smile and wave ...

    The art of it is to help people genuinely find better, faster, less costly and less risky ways to achieve outcomes. If these ways can be found then there is no problem enrolling sustainable support from people who matter (i.e. people who actually 'do stuff' in government agencies). Most people actually want to be good at their jobs and many are frustrated by moribund processes and leadership.

    Creating a better path forward using modern digital technologies does not have to be a 'win-lose' adversarial game. My experience is that "come in, shake the place up and leave" style is actually just pandering to the whims of a naïve leadership that doesn't understand the operational realities of their organisation. It is usually just a waste of everyone's time because little of sustainable value is achieved.

    The underlying reason, of course, is that most agencies are darned complicated and real solutions need to be properly thought through and implemented well. Who is going to do this diligent work? People who have experience and a detailed knowledge of their agency and its processes, systems and operating constraints. Do these people step forward to participate in a 'probably doomed' breakthrough project lead by somebody with little credibility and damaged relationships? No. They stay quietly in the background waiting to do the job properly once the 'breakthrough team' and their consultants and hangers on have evacuated the building (again)...

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  2. Chief Digital Officer should have to be implemented immediately

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  3. Thanks Craig, a fascinating article so far in my career I have experienced both approaches personally and as an observer. To me, the crucial aspect that affects the success of both approaches is the direct reports to the CDO. A CDO can't do it alone and needs to build their management team well. Working out who to keep from existing staff and which of your 'cronies' to bring in is essential.

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