The Art of Digital Transformation: CDO Experiences
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The Art of Digital Transformation: CDO Experiences Robert M Davison Dept of Information Systems, City University of Hong Kong 1 Definitions of Digital Transformation 2 Vial (2019) a process that aims to improve an entity by triggering
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01
The Art of Digital Transformation: CDO Experiences Robert M Davison
Dept of Information Systems,
City University of Hong Kong 1<br>
Dept of Information Systems,
City University of Hong Kong 1<br>
02
Definitions of Digital Transformation 2 Vial (2019) “a process that aims to improve an entity by triggering significant changes to its properties through combinations of information, computing, communication, and connectivity technologies” Wessel et al. (2021) “activities leverage digital technology in (re)defining an organization’s value proposition, … involves the emergence of a new organizational identity”<br>
03
Background Digital Transformation (DT) has evolved over the last 20 years
There are numerous case studies of both successes and failures
There is attention to maturity models from pundits who assert that they know how DT should be conducted
There is quite a lot of disagreement about what DT actually is – lots of different definitions
There is much less attention to the people charged with leading the DT initiative in the organisation, i.e. the Chief Digital Officer. 3<br>
There are numerous case studies of both successes and failures
There is attention to maturity models from pundits who assert that they know how DT should be conducted
There is quite a lot of disagreement about what DT actually is – lots of different definitions
There is much less attention to the people charged with leading the DT initiative in the organisation, i.e. the Chief Digital Officer. 3<br>
04
Motivation There is a wealth of research into the nature of DT 4<br>
05
Existing DT research focuses… Motivation 5 but often ignores the effect of exogenous shocks :
Covid-19
The Russia-Ukraine war
Financial crises
Disrupted supply chains
In future we can expect more shocks like this
Climate change
Migration patterns
Zoonotic diseases<br>
Covid-19
The Russia-Ukraine war
Financial crises
Disrupted supply chains
In future we can expect more shocks like this
Climate change
Migration patterns
Zoonotic diseases<br>
06
Problematisation Few investigations & limited understanding of “what CDOs do as they navigate the DT journey?” 6 We investigate the role of the CDO in leading DT initiatives in GEM, a global events and brand management firm, and SilkyJade, a global software and systems firm. We apply punctuated equilibrium theory (PET) (Gersick, 1991) and suggest that GEM’s previously stable, but non-digital state was punctuated by a combination of CDO’s DT initiatives and Covid-19, leading to an emerging new equilibrium We suggest the critical role of guanxi for the CDO of SilkyJade to build personal relationships that facilitate navigation of the firm’s shoals and rapids, with both internal and external transformation taking place.<br>
07
Chief Digital Officers (CDOs) The first CDOs were hired in about 2010
Today, there are more of them – but far fewer than CIOs and CTOs
CDOs have a unique (and challenging) responsibility – to spearhead the DT initiative in the organisation and to ensure that it is successful
CDOs need to be experts with respect to technology, business processes, communication, culture, people
Some CDOs do everything, others are specialists in a particular area
CDOs are often appointed from a marketing function, but some may have been CTOs before. They may progress to COO or CEO. 7<br>
Today, there are more of them – but far fewer than CIOs and CTOs
CDOs have a unique (and challenging) responsibility – to spearhead the DT initiative in the organisation and to ensure that it is successful
CDOs need to be experts with respect to technology, business processes, communication, culture, people
Some CDOs do everything, others are specialists in a particular area
CDOs are often appointed from a marketing function, but some may have been CTOs before. They may progress to COO or CEO. 7<br>
08
CDOs Vial (2019) argues that the creation of a CDO position signals the strategic nature of DT for the entire organization
Kessel & Graf-Vlachy (2021): CDOs are hired when the firm lacks an individual with digital leadership skills
Wade (2020) suggests that the CDO role is doomed to fail: there are too many problems to tackle, too many people to hate the CDO!
Parachuted CDOs are particularly at risk if they don’t have good internal connections (guanxi)
Some scholars suggest that the CDO role is temporary – it will fade away when everything is digital 8<br>
Kessel & Graf-Vlachy (2021): CDOs are hired when the firm lacks an individual with digital leadership skills
Wade (2020) suggests that the CDO role is doomed to fail: there are too many problems to tackle, too many people to hate the CDO!
Parachuted CDOs are particularly at risk if they don’t have good internal connections (guanxi)
Some scholars suggest that the CDO role is temporary – it will fade away when everything is digital 8<br>
09
Digital Leadership Support from senior management is critical, to the CDO as well
C-suite executives must not only endorse DT but also push the implementation personally
But, many C-suite executives are not digitally-literate!
So the CDO has to convince these senior people first, and hope that they will help him/her to convince lower level managers in their respective fields
The CDO is the digital leader-in-chief, but cannot do all the work
An isolated CDO will quickly exit the firm due to frustration and a failure to implement change 9<br>
C-suite executives must not only endorse DT but also push the implementation personally
But, many C-suite executives are not digitally-literate!
So the CDO has to convince these senior people first, and hope that they will help him/her to convince lower level managers in their respective fields
The CDO is the digital leader-in-chief, but cannot do all the work
An isolated CDO will quickly exit the firm due to frustration and a failure to implement change 9<br>
10
Context Current investments into DT are high – USD1.8 trillion in 2022 and still growing at 16.6%. Growth in China is forecast at 18.5%.
Studies of DT in China from an IT perspective, or a CDO perspective, are absent.
There are CDOs in China, but not much is reported about what they do, what challenges they face and how they deal with them
I present small cases of two global firms in the Greater China space
SilkyJade – a major software developer, HQ in Beijing (Davison et al., 2023)
GEM – a major brand and events manager, HQ in Hong Kong (Liu et al., 2023) 10<br>
Studies of DT in China from an IT perspective, or a CDO perspective, are absent.
There are CDOs in China, but not much is reported about what they do, what challenges they face and how they deal with them
I present small cases of two global firms in the Greater China space
SilkyJade – a major software developer, HQ in Beijing (Davison et al., 2023)
GEM – a major brand and events manager, HQ in Hong Kong (Liu et al., 2023) 10<br>
11
Methods We interviewed the CDO of SilkyJade and the CDO + 5 more senior executives in GEM
The data set is very small! We are in the progress of interviewing more people.
All interviews were conducted in English and took 1-2 hours
We adopted a grounded theory style of analysis, following the principles of Gioia et al. (2013) 11<br>
The data set is very small! We are in the progress of interviewing more people.
All interviews were conducted in English and took 1-2 hours
We adopted a grounded theory style of analysis, following the principles of Gioia et al. (2013) 11<br>
12
Case Findings I – SilkyJade The CDO was the former Exec VP for Global Business Services.
He was an insider who had worked for the firm in senior management roles for 20+ years since its founding
His areas of responsibility covered corporate digital strategy, including cloud, data, digital currency, metaverse, and execution, with a focus on the growth strategy not the operational strategy
This contrasts with the CIO who is busy with operational responsibilities that involve maintaining networks and processes
“Our strategic design strategy is to help clients understand DT and how they should perform their transformation” 12<br>
He was an insider who had worked for the firm in senior management roles for 20+ years since its founding
His areas of responsibility covered corporate digital strategy, including cloud, data, digital currency, metaverse, and execution, with a focus on the growth strategy not the operational strategy
This contrasts with the CIO who is busy with operational responsibilities that involve maintaining networks and processes
“Our strategic design strategy is to help clients understand DT and how they should perform their transformation” 12<br>
13
Case Findings II: SilkyJade All firms have an established way of doing things. This is interrupted by DT, so there is a need for the CDO to ‘sell’ the DT concept carefully
He has to “lead and support the internal DT initiatives, data initiatives and innovation projects, as well as act as the key voice to our clients and the marketplace regarding digital development”
“We want people to understand that we are at the forefront of digital transformation, we are a leading player and we understand the business”
Clients are interested to know how they can leverage digital. They are already convinced that it is a good idea! 13<br>
He has to “lead and support the internal DT initiatives, data initiatives and innovation projects, as well as act as the key voice to our clients and the marketplace regarding digital development”
“We want people to understand that we are at the forefront of digital transformation, we are a leading player and we understand the business”
Clients are interested to know how they can leverage digital. They are already convinced that it is a good idea! 13<br>
14
Case Findings III: Silky Jade The CDO’s responsibilities cover:
Develop and evolve corporate digital strategy
Guide clients on how to execute
Lead the internal innovation with new concepts, best practices, technologies
Enhance corporate branding as the voice of the firm for DS, DT and Innovation
This is a wide portfolio – in essence, he does everything. He also has to look after:
Corporate business strategy development
Cyber security
Corporate social responsibility, digital governance, ethics, etc. 14<br>
Develop and evolve corporate digital strategy
Guide clients on how to execute
Lead the internal innovation with new concepts, best practices, technologies
Enhance corporate branding as the voice of the firm for DS, DT and Innovation
This is a wide portfolio – in essence, he does everything. He also has to look after:
Corporate business strategy development
Cyber security
Corporate social responsibility, digital governance, ethics, etc. 14<br>
15
Case Findings IV: SilkyJade A key role for the CDO is to drive change – internally and externally
Internally – transform operational efficiency to respond to market needs
Externally – sell our internal practices as a solution for our clients
The CDO must also be sensitive to the competition and the changing legal environment
Internal ‘university’ to train, learn, explore, innovate
But there are problems because people don’t like change
If the CEO is on board, its easier at the top, but lower level managers resist
They don’t want to lose their power and independence and secrets
So a lot of communication, persuasion, negotiation, guanxi is needed 15<br>
Internally – transform operational efficiency to respond to market needs
Externally – sell our internal practices as a solution for our clients
The CDO must also be sensitive to the competition and the changing legal environment
Internal ‘university’ to train, learn, explore, innovate
But there are problems because people don’t like change
If the CEO is on board, its easier at the top, but lower level managers resist
They don’t want to lose their power and independence and secrets
So a lot of communication, persuasion, negotiation, guanxi is needed 15<br>
16
Evolutionary Journey GEM I: Punctuating the Equilibrium Before 2018: 16 PET: a stable, but dysfunctional equilibrium PET: Human punctuation initiated 2018: Hired the CDO in January GEM was not technologically advanced<br>
17
Evolutionary Journey GEM II: Standardizing a New Equilibrium 17<br>
18
Evolutionary Journey GEM III: Populating and Extending the New Equilibrium 18 Reorganise all IS under a single technology stack and a common interface
Enhancing HR processes (onboarding time reduced from 14 days to 1)
Automating financial reporting – more effective, efficient, accurate
A new project management system
A new data analytics platform<br>
Enhancing HR processes (onboarding time reduced from 14 days to 1)
Automating financial reporting – more effective, efficient, accurate
A new project management system
A new data analytics platform<br>
19
Discussion The two stories are somewhat different
At SilkyJade, the CDO plays a more strategic role
At GEM, the CDO is more operational
Yet there are similarities
Both CDOs have a wide portfolio of responsibilities
Both CDOs experienced resistance
SilkyJade’s CDO is an industry veteran, close to retirement
GEM’s CDO is much younger, with the energy and passion to continue the fight! With 5 years in the position, she has far exceeded Wade’s (2020) prediction of short tenure. 19<br>
At SilkyJade, the CDO plays a more strategic role
At GEM, the CDO is more operational
Yet there are similarities
Both CDOs have a wide portfolio of responsibilities
Both CDOs experienced resistance
SilkyJade’s CDO is an industry veteran, close to retirement
GEM’s CDO is much younger, with the energy and passion to continue the fight! With 5 years in the position, she has far exceeded Wade’s (2020) prediction of short tenure. 19<br>
20
Discussion The work of a CDO will be aided by cooperation from people in all positions. They can make his/her life easier or harder.
CDOs and their firms are also affected by exogenous shocks
Diseases, wars, economic crises, supply chain disruptions, even technology changes like generative AI
CDOs must be flexible and adapt to the infinite variety of circumstances, unpredictable things that can happen 20<br>
CDOs and their firms are also affected by exogenous shocks
Diseases, wars, economic crises, supply chain disruptions, even technology changes like generative AI
CDOs must be flexible and adapt to the infinite variety of circumstances, unpredictable things that can happen 20<br>
21
Theoretically, motivated by PET Two agents: 21 In recent existed research, the punctuations have human origins
We identified an environmental punctuation in GEM Recognising these origins is important theoretically because it enables us to extend PET by allowing for the inclusion of punctuating events that transcend human origins<br>
We identified an environmental punctuation in GEM Recognising these origins is important theoretically because it enables us to extend PET by allowing for the inclusion of punctuating events that transcend human origins<br>
22
The longer-term (5 years) success of the GEM CDO is NOTABLE 22 CDOs’ tenure rarely exceeds 2.5 years Wade (2020)
GEM CDO’s success is due to several key factors: <br>
GEM CDO’s success is due to several key factors: <br>
23
Longer-term (5 years) success of the CDO: factors: 23 With the unflagging support of GEM’s exec. board, the CDO persuaded colleagues to accept the changes to the digital culture step-by-step Significant improvements were only realised early in her third year, which coincided with the outbreak of Covid-19 Deliver technology-based outcomes to meet staff needs and enhance their work life quality<br>
24
Theory - Guanxi At SilkyJade in particular, we found abundant evidence of why the CDO must cultivate guanxi with a myriad of internal and external stakeholders
Almost every activity that he is involved in requires communication, negotiation, persuasion
There is always the potential for resistance, from different people and for different reasons
The CDO is probably no one’s best friend!
Without guanxi, tactful and persuasive conversation, and much patience, the CDO’s task is impossible. 24 Guanxi Components
Ganqing
Huibao
Hexie
Jiaoqing
Mianzi
Renqing
Xinyong<br>
Almost every activity that he is involved in requires communication, negotiation, persuasion
There is always the potential for resistance, from different people and for different reasons
The CDO is probably no one’s best friend!
Without guanxi, tactful and persuasive conversation, and much patience, the CDO’s task is impossible. 24 Guanxi Components
Ganqing
Huibao
Hexie
Jiaoqing
Mianzi
Renqing
Xinyong<br>
25
Contributions: 25 Academic Implications
We investigated DT through the lens of a human (the CDO)
We discovered an environmental agent that extends PET
Guanxi is essential because the CDO must be well-connected with many internal and external stakeholders Practical Implications
There is no “One-size fits all” DT Strategy: Be persistent and keep trying
Embrace resistance: there are many hidden insights that can explain why people resist or reject change: be open-minded and learn how to listen to their real needs<br>
We investigated DT through the lens of a human (the CDO)
We discovered an environmental agent that extends PET
Guanxi is essential because the CDO must be well-connected with many internal and external stakeholders Practical Implications
There is no “One-size fits all” DT Strategy: Be persistent and keep trying
Embrace resistance: there are many hidden insights that can explain why people resist or reject change: be open-minded and learn how to listen to their real needs<br>
26
Limitations and Future Ideas Our small population size makes it unrealistic to ground a new theory
We need more data from more people
But seeing DT as a punctuated equilibrium phenomenon may give us clues as to how it can be theorised
Meanwhile, what about guanxi – is it just part of the environment or can we theorise it?
A theory may describe what happens, or it may predict what can happen if some antecedents exist
We can identify critical success and failure factors or drivers of DT
We can predict if the CDO will win or lose 26<br>
We need more data from more people
But seeing DT as a punctuated equilibrium phenomenon may give us clues as to how it can be theorised
Meanwhile, what about guanxi – is it just part of the environment or can we theorise it?
A theory may describe what happens, or it may predict what can happen if some antecedents exist
We can identify critical success and failure factors or drivers of DT
We can predict if the CDO will win or lose 26<br>
27
Conclusions DT is not going away! There is no end to the journey!
Firms will keep trying to transform their internal processes and it will be painful!
CDOs have a critical role to play – they can make or break the DT
Each CDO is different, each organisation is different, yet there are commonalities that we can identify
Internal CDOs may have an easier task than externally-hired CDOs
All CDOs need to be excellent communicators at all levels and disciplines. They must also be excellent listeners and have excellent guanxi inside and outside the organisation. 27<br>
Firms will keep trying to transform their internal processes and it will be painful!
CDOs have a critical role to play – they can make or break the DT
Each CDO is different, each organisation is different, yet there are commonalities that we can identify
Internal CDOs may have an easier task than externally-hired CDOs
All CDOs need to be excellent communicators at all levels and disciplines. They must also be excellent listeners and have excellent guanxi inside and outside the organisation. 27<br>
28
References Davison, R.M., Wong, L.H.M. and Peng, J. (2023) The Art of Digital Transformation as Crafted by a Chief Digital Officer, International Journal of Information Management 69, 102617, 1-9.
Gioia, D.A., Corley, K.G. & Hamilton, A.L. (2013). Seeking qualitative rigor in inductive research: Notes on the Gioia Methodology, Organizational Research Methods 16(1), 15-31.
Kessel, L. and Graf-Vlachy, L., 2021, Chief Digital Officers: Review and Research Agenda, Wirtschaftsinformatik Proceedings, Track 19, paper 3.
Kohli, R. & Melville, N.P. (2019). Digital innovation: A review and synthesis, Information Systems Journal 29, 1, 200-223.
Liu, S., Cassumbhoy, F., Wong, L.H.M. and Davison, R.M. (2023) Spearheading Digital Transformation: The Role of the Chief Digital Officer, 27th PACIS, Nanchang, CN, July 8-12.
Nwankpa, J.K. & Roumani, Y., 2016, IT Capability and Digital Transformation: A Firm Performance Perspective, in Proceedings of the 37th International Conference on Information Systems, 1–16.
Singh, A., & Hess, T. (2017). How chief digital officers promote the digital transformation of their companies. MIS Quarterly Executive, 16(1), 1–17.
Vial, G. (2019). Understanding digital transformation: A review and a research agenda, Journal of Strategic Information Systems 28, 2, 118–144.
Wade, M., 2020, From dazzling to departed - Why chief digital officers are doomed to fail, https://www.weforum.org/agenda/2020/02/chief-digital-officer-cdo-skills-tenure-fail/.
Wessel, L., Baiyere, A., Ologeanu-Taddei, R., Cha, J. and Jensen, T.B. (2021). Unpacking the difference between digital transformation and IT-enabled organizational transformation, Journal of the AIS 22, 1, 102-129.
Wimelius, H., Mathiassen, L., Holmstrom, J., & Keil, M. (2021). A paradoxical perspective on technology renewal in digital transformation. Information Systems Journal, 31(1), 198–225. 28<br>
Gioia, D.A., Corley, K.G. & Hamilton, A.L. (2013). Seeking qualitative rigor in inductive research: Notes on the Gioia Methodology, Organizational Research Methods 16(1), 15-31.
Kessel, L. and Graf-Vlachy, L., 2021, Chief Digital Officers: Review and Research Agenda, Wirtschaftsinformatik Proceedings, Track 19, paper 3.
Kohli, R. & Melville, N.P. (2019). Digital innovation: A review and synthesis, Information Systems Journal 29, 1, 200-223.
Liu, S., Cassumbhoy, F., Wong, L.H.M. and Davison, R.M. (2023) Spearheading Digital Transformation: The Role of the Chief Digital Officer, 27th PACIS, Nanchang, CN, July 8-12.
Nwankpa, J.K. & Roumani, Y., 2016, IT Capability and Digital Transformation: A Firm Performance Perspective, in Proceedings of the 37th International Conference on Information Systems, 1–16.
Singh, A., & Hess, T. (2017). How chief digital officers promote the digital transformation of their companies. MIS Quarterly Executive, 16(1), 1–17.
Vial, G. (2019). Understanding digital transformation: A review and a research agenda, Journal of Strategic Information Systems 28, 2, 118–144.
Wade, M., 2020, From dazzling to departed - Why chief digital officers are doomed to fail, https://www.weforum.org/agenda/2020/02/chief-digital-officer-cdo-skills-tenure-fail/.
Wessel, L., Baiyere, A., Ologeanu-Taddei, R., Cha, J. and Jensen, T.B. (2021). Unpacking the difference between digital transformation and IT-enabled organizational transformation, Journal of the AIS 22, 1, 102-129.
Wimelius, H., Mathiassen, L., Holmstrom, J., & Keil, M. (2021). A paradoxical perspective on technology renewal in digital transformation. Information Systems Journal, 31(1), 198–225. 28<br>