The Future of Digital Leadership: Strategies, Metrics and Real-World Insights
In today's competitive business landscape, the "Digital Transformation" imperative is inescapable. Having been deeply entrenched in IT consulting for years and having served as a CTO for a global healthcare company, I've navigated firsthand the relentless wave of digital disruption. But beyond the buzzwords and jargon, what does it truly mean for an organization to be a digital leader?
Benefits of Adopting a Digital-First Approach
Digital transformation has shifted from being a tool to gain a competitive edge to now becoming a race to remain relevant. Companies harness digital technologies to enhance their offerings and streamline operations. A McKinsey study emphasized that businesses who are digital leaders often outpace industry growth rates, sometimes reaching an astonishing 40%. An MIT study further supports this, revealing that businesses advanced in their digital journey enjoy around 20% higher profitability than their counterparts.Strategy to Attain Digital Leadership
Achieving digital leadership means transforming customer and employee experiences and optimizing operations through technology, allowing businesses to gain a competitive advantage in their respective sectors. The path to digital leadership hinges critically on your strategic approach. My personal experience in handling a comprehensive tech portfolio underscored the importance of effective prioritizing and budgeting. Predictable technology spend was essential to meeting business and financial commitments of the company while also advancing the maturity of our systems, tools, and approaches across the technology portfolio to drive digital transformation. I approached the challenge with the mindset of modern product management. I thought of our organization as a product – one, big application with many features that served different stakeholder groups. With a fixed monetary capacity and a quarterly release cadence, our challenge was to decide which facet of our digital portfolio required immediate focus and which could wait for a subsequent release. By rigorously prioritizing across client facing digital products, employee facing digital experiences and core internal technology platforms, we achieved monumental strides in digital modernization and drove our three-and-a-half-year roadmap forward. The monthly spending framework became our North Star, guiding us in making strategic decisions. Just as a product manager must prioritize features in software product development, we had to discern the most pivotal initiatives to fund and execute. This disciplined approach, interweaved with the goal of ascending as a digital leader, fostered a continual cycle of improvement. From successfully modernizing the call center, transitioning to a new ERP system, revamping our security suite, adopting a state-of-the-art collaboration suite, and launching new digital products and services, our focus remained unwavering: elevating both customer and employee experiences while enhancing operational efficiency.The Importance of Measuring Value in Tech
It's pivotal to address a pressing concern that technology leaders globally grapple with - discerning the value they derive from their technology expenditure. In this digital era, the pivotal role of technology spending cannot be overstated. Almost every significant business initiative today demands a hefty technology component, creating an urgency to understand whether these investments truly deliver. We can divide tech expenses into three main areas:- Labor: This encompasses the in-house team dedicated to technology, regardless of their dispersion across various departments.
- Tech Infrastructure: Encompassing costs linked to licensing, cloud services, hardware, software, and the like.
- Professional Services: Here, the spotlight is not just the cost, but the genuine value derived from such partnerships.
The Power of Innovation Velocity
One of the most impactful accomplishments during this transformative journey was refining our approach to modernize our technology platforms. This streamlined process eradicated accumulating technical debt while also enhancing the customer and employee experience to improve operational efficiency. To capture this, we introduced the concept of measuring the volume, velocity and quality of the work the combined technology team was able to achieve in a given period – a term I now call 'innovation velocity'. The innovation velocity metric combined how much work we did, the quality of the work performed, and how quickly we were able to cycle that work through. It revolutionized our measurement paradigm and allowed us to improve the impact and return of every dollar we spent on technology across the organization measurably and materially. By quantifying our innovation pace, we were not just determining absolute values but demonstrating continuous improvement to the CEO and the Board. Through this approach, we could equate our investments to tangible outputs, showcasing the value returned month by month. Furthermore, this metric was also a critical input to helping prioritize work across the portfolio. Every initiative, regardless of its scale, was branded as 'innovation'. Integrated seamlessly into our modern DevOps framework, it made task management and prioritization efficient. By meticulously monitoring our progress, our team’s productivity saw remarkable growth, all while maintaining our consistent technology budget while driving the organization digital leadership agenda forward.Innovation Velocity and Its Impact on Tech Value
Innovation Velocity provided a fresh perspective to gauge tech value. This metric, applied to our in-house teams as well as partners who aligned with our DevOps stack, allowed us to rapidly discern the value from each initiative and each partnership. It transitioned our focus from mere hourly rates to the genuine value delivered. In hindsight, having an apparatus that showcases the value derived from tech investments is indispensable. We were able to demonstrate an improvement of over 130% in the metric over 18 months while keeping our monthly technology spend essentially flat. Such metrics provide invaluable insights, facilitating pivotal business decisions and more importantly advanced the digital leadership journey for the organization.Conclusion
As technology leadership evolves, embracing metrics that provide a holistic assessment of value is indispensable. Reflecting on my journey, I can't emphasize enough the significance of this approach. It's not just a tool but an integral asset in the repertoire of every tech leader aiming for true digital leadership.Subscribe to our blog: