The C-suite plays a crucial role in establishing a company culture of digital literacy, which is critical for success with digital transformation efforts.
Right now, digital transformation is all about hiring the right IT team and getting the right experts in place to handle the change. However, there’s a missing piece. C-suite could inadvertently get off the path by turning responsibility for technology over to a different department.
Digital transformation success needs a tech-savvy C-suite. It’s time for board executives to pursue digital literacy. As we enter into this digital age, technology familiarity will be a baseline requirement for c-suite eligibility.
The pandemic accelerated digital transformation
In the early days of the crisis, companies faced a choice. They could try to continue on as usual and face almost certain destruction or accelerate all digital transformation. These organizations had to navigate through challenging circumstances and come out on the other side.
Under normal circumstances, digital transformation success is notoriously low. Organizations focus on bringing in expert team members, turning over decision making and technology understanding to them. While it’s wise for c-suite to surround themselves with knowledgeable associates, no one would dream of turning over all expertise like this for any other department.
For example, before a CEO arrives at this level, organizations assume competency in management, leadership, and finance. A CEO who says, “I don’t understand finance projection, but I have the best people working on it!” wouldn’t last long in the board room.
It’s time to think of data literacy in the same way. Just as CEOs do not need to be finance experts but must have a baseline understanding of balance sheets, forecasting, and risk, a baseline digital competence is critical.
Long-held norms for selecting the most qualified CEOs may be slow to change, but now is the time to push those benchmarks. Data and technological literacy isn’t a luxury anymore; this baseline characteristic is now a must-have.
Not just CEOs but all C-Suite will evolve
According to a study from the Harvard Business Review, digital skills appeared in all job specs for chief technical officers, but in postings for chief accounting officers or chief human resource officers? Less than a third. Other C-Suite roles mentioned digital skills somewhere around half the time.
As businesses and organizations shift to data-driven initiatives and integrate artificial intelligence into all facets of business, familiarity with these new solutions is critical to success.
AI solutions don’t happen through magic. They require a buy-in and an understanding of their underlying behaviors to launch the type of value businesses need. With a poorly trained C-suite, these initiatives never get off the ground.
The vital roles these positions play:
- Chief Executive Officer: Sets the tone for the entire organization. A tech-savvy CEO raises the bar for all departments.
- Chief Financial Officer: AI has made huge strides in the finance world. A CFO that embraces this technology puts the company on a forward-thinking trajectory in financial analysis, planning, and decision making.
- Chief Human Resources Officer: A partner in change initiative and vital in seeking out talent, the CHRO helps shift perceptions of technology with a forward-thinking perspective.
- The rest of the board: A technologically sophisticated board embraces digital transformation and, more importantly, understands how to make changes last. They also prepare the enterprise for long-term success as they fill roles within the board and bring on advisors with technological expertise.
Shaking up recruitment
Companies may have to look beyond the usual training grounds to fill positions on the board. The traditional pipeline has produced a bit of a skills gap. Unless those in that pipeline are willing to dedicate real effort to learning technology like they do finance, companies may head in a different direction.
As business moves forward, organizations look to younger generations to lead the way for disruption, both global disruptions like pandemic and technological disruptions. Data allows companies to operate in real-time. Boards that can’t follow that track are ill-prepared to lead the company into new territory or traverse through a disruption like Covid and survive.
If disruption taught business anything, it was that digital transformation plans on the back burner would come back to haunt them. According to a McKinsey study, companies that deploy more technologies on average are more successful with digital transformation.
Older, more traditional CEOs unaware or even averse to new technologies can’t steer the company to a technological future. That future only becomes more complex, so a business may have no choice but to look for talent in junior positions outside the traditional talent pipeline. They may even seek these positions outside the company to bring in technologically savvy leadership.
The same McKinsey study noted that companies with a more robust approach to talent also trended towards winning digital transformation strategies. And that’s why more organizations could surprise us with future CEO and C-suite picks. Having the right tech-savvy C-suite in place improves the chances of digital transformation success.
Building a tech-savvy C-Suite for digital transformation
Grappling with digital transformation is on every organization’s agenda. Turning the focus from a department to “deal with” technology helps companies create a board where digital skills are interwoven into the traditional benchmarks for success. This is one of the ways that organizations will move forward despite disruptions.
This is the real need. Accepting that disruption is the norm, looking to new avenues of talent for board appointments and hires will most likely be more common in the years ahead. The C-suite plays a crucial role in establishing a company culture of digital literacy; without a tech-savvy leadership model, companies may continue to see low success with digital transformation efforts.
