OUT NOW im #Confare Blog with Peter Sondergaard: Why Is Digital Transformation is lagging behind
For many years, Peter Sondergaard was Executive Vice President Research & Advisory of Gartner. After leaving Gartner in 2018, he began his journey in supporting global decision-makers as an analyst and consultant in successfully mastering the challenges of digital transformation.
In the interview Michael Ghezzo conducted with Peter Sondergaard, a through discussion about digital transformation took place. In addition to that, topics such as how the current economic situation is affecting certain industries were addressed. A series of blogs will be published on that exclusively on #ConfareBlogs. Stay up to date on all Confare Blogs with Peter Sondergaard and many more IT experts by subscribing to ConText Confare lights IT up. Sign up here for free.
You can meet Peter Sondergaard in person at the Confare #CIOSUMMIT in Vienna. We are thrilled to welcome him to the Confare stage. He will be there among several other CIOs from all over the DACH-region in one of the top forums that take place in Austria in the IT sector. You can sign up for the event here.
Digital transformation is on everyone’s lips, yet so many companies struggle with it? Why is that do you think?
I think that there is a number of factors that challenge organizations right now. We have come out of a pandemic which focused on investments in the digital area, on certain critical aspects of the business. However, that wasn’t necessarily a part of what should have been the broad strategy of the organization. It was digitalization out of necessity.
Now, we are in a different environment: a very economically challenging one for some industries. And so, there is a challenge from a budget perspective when it comes to digitalization. There will be a struggle with the available skills to actually scale digital transformation, especially in industries that cannot afford to pay for the sufficient skills required. In addition, I think there is a lack of the broad leadership capabilities to go to this next level of maturity around digitalization. That is when we have to recognize that digitalization is a journey, and that it goes through multiple stages of maturity, unlike what we often see. We often see digitalization portrayed as a binary: that is either you’re digital or not digital. That is, and I think most people will agree with me, not true. There are levels of maturity and going from one level to the next level is a substantial transformation. We are in a post-pandemic-digital world and this is a world that will be different than the one prior to the pandemic and the one during the pandemic.
So, first, a clarification: when I say lack of leadership skills, it is meant as a statement of broad leadership and managerial skills across the organization. Very often do CIOs have a great appreciation and understanding of digital transformation; however, that is not the case in the organization broadly speaking. The second thing is that organizational capabilities, and thereby leadership capabilities, evolve over time, as they always have. There is a new set of capabilities needed for this next wave of digital transformation. Furthermore, there is a strong need for understanding how you formulate strategy, where digital is an element of the strategy. This is necessary so that we no longer talk about a digital and then a separate business strategy; you need to have them both in one.
Secondly, there are requirements in terms of understanding technology, whether it is data and artificial intelligence, technology innovation, or what technology architecture is about. CIOs do understand this. However, in order for digitalization to become pervasive, all managers and leaders of the organization need to have this understanding and how it can be used in the business.
Then there is a set of softer skills that are required. We need to understand how to operate not only the stable running of the business but also the changing and innovating of the business. And then of course, there’s a set of basic leadership skills required. For example, in a world in which sustainability is really important, it is important to be able to wisely plan, execute and operate with a profit and loss budget, where sustainability is at the bottom line.
In addition, it is crucial to understand how you transform your business with data. And again, it’s not a binary thing. It’s not a question of you have it or you don’t have it. It’s an evolution that will take time because none of us learned anything about this during our schooling years. So, it’s kind of all new for most people.
What would be your most important tips in order to improve the situation of digital transformation and make a rapid progress?
Well, I think as many people have said, data matters. Also, being able to understand where you stand as a leadership team and as a management board would be a first step. It is also a step of recognizing both your strength and your weaknesses. So, this requires management boards that have the courage to actually understand where they stand and benchmark themselves accordingly. Then I think the next thing is to understand that you can’t change everything. You would both as an individual and as a leadership team focus on the two or three critical capabilities for your organization in its changed process. From this point it is a question of joint and individual learning on the job. Frankly, it is about forcing yourself to, in your spare time, learn things that you may not feel comfortable about at this stage. Learning and teaching is not something that gets handed and delivered to you on a plate; you have to take initiative yourself. I think that is also true for a leadership team combined: they have to take initiative as a leadership team to change.
The CIO now is confronted with an extremely diverse digitization agenda. What would be your recommendations for the right priorities a CIO has to set?
I think part of this is to very clearly link digitalization to the business’s strategy or the strategy articulated for the organization whether public or private business. After having linked things to the strategy, the next stage will be to very clearly get a governance to execute. As we all know, the biggest challenge for many organizations is to actually execute a strategy where digital is part And I fear that many CIOs don’t think through the execution part of the digital strategy sufficiently and have not worked through the governance aspects of it. There is a lack in ensure that everybody that needs to be involved in the organization is actually involved close enough in a way that allows for execution to happen. Ultimately, the execution has to be measured up against the required KPIs or a measurement criteria for the organization.