In my previous article, “Dissecting Digital Disruption: The Imperative of Digital Literacy for Today’s CEOs,” I explored how the rapid pace of technological evolution is reshaping industries globally. This piece serves as a sequel, focusing on how corporate executives can practically lead digital transformation within their organizations.
We live in what many now call a BANI (Brittle, Anxious, Nonlinear, and Incomprehensible) world, where the pace of technological advancement is exponential. Every 18 months, computing power doubles, data generation skyrockets, and global connectivity intensifies. These forces are disrupting traditional business models, creating both immense challenges and unprecedented opportunities. However, many leaders fail to recognize the magnitude of these changes until it’s too late.
Reimagining the Business Model: The CEO’s Mandate
In these disruptive times, business models that once thrived in more stable environments are proving inadequate. While businesses are adept at handling continuous or incremental change, they often falter when faced with episodic or disruptive change. The reality is that disruptive changes require more than incremental adjustments—they necessitate the creation of entirely new business models.
Reimagining your business model starts with a CEO-led initiative that identifies how value is created, delivered, and captured in the digital age. This isn’t just about adding new technologies; it’s about rethinking the entire structure of the organization. When there’s a need to disrupt the market—or when disruption is inevitable—executives must take a hard look at their existing models and question whether they can withstand the pressures of exponential times.
A reimagined business model could involve transforming customer interactions through digital platforms, leveraging AI to optimize operational processes, or using data analytics to drive decision-making in new ways. The key is that technology is an enabler, not the starting point. It’s the CEO’s job to lead the strategic reimagination by aligning business objectives with digital possibilities. This requires breaking down silos within the organization, ensuring that different departments—such as marketing, operations, and IT—collaborate to design and implement the transformation.
Many CEOs fall into the trap of thinking that digital transformation means simply upgrading systems or adopting new tools. However, true transformation involves reconfiguring how the business operates at its core. This could mean embracing new revenue models, such as transitioning from product-based to service-based offerings or creating new digital ecosystems that radically change customer experiences.
Harvard Research (2022) suggests, 87.5% of digital transformation initiatives fail. So, how can CEOs better lead their organizations through this change? The answer lies in understanding the CEO’s Model for Digital Transformation, which involves four essential components: business understanding, leadership, digital possibilities, and reimagining the business model.
1. Deep Understanding of the Business
Digital transformation must begin with a profound understanding of your business—not just from a technology standpoint but also from a customer-centric and operational perspective. Often, insights into customer pain points are found in the sales and marketing teams, while supply chain and procurement experts are aware of inefficiencies with suppliers. This deep understanding helps you approach digital transformation not as a tech initiative but as a strategic business reimagination focused on solving real problems.
2. Leadership: Strategy, Sponsorship, and Change Management
Leadership in digital transformation spans three key areas: strategy, sponsorship, and change management. First, strategy is critical. It is surprising how many businesses lack a future-proof strategy. CEOs must ensure that digital transformation efforts are rooted in a strategy that aligns with their long-term business goals.
Second, sponsorship is essential. The CEO and executive team must actively sponsor and champion the transformation, ensuring alignment across the entire organization. Finally, the role of change management cannot be overstated. As digital transformation has significant operational impacts, leaders must be skilled change agents, capable of guiding their teams through uncertainty and resistance. Today’s leaders must inspire and facilitate change, not just manage it.
3. Digital Possibilities: Matching Technology to Business Problems
The third component of the model involves understanding digital possibilities. This isn’t about focusing on the latest technological buzzwords like AI, big data, or robotics. Instead, it’s about identifying how digital solutions can address specific business challenges. Often, the knowledge of these possibilities resides within the IT or digital teams, but CEOs must bridge the gap by integrating this expertise into their strategic thinking. This means becoming digitally literate enough to understand and leverage these technologies effectively, as discussed in the previous article.
4. Reimagining the Business Model
At the core of this model is the need to reimagine the business model. Digital transformation is fundamentally about rethinking how value is created and delivered in your industry. In most cases, this requires tearing apart and rebuilding the existing business model to adapt to the new realities of the digital world. Whether it’s redesigning supply chains, creating new customer experiences, or adopting data-driven decision-making, the goal is to develop a model that is agile, innovative, and capable of thriving in disruption.
The CEO’s Role: Leading from the Front
One of the main challenges of digital transformation is that the deep understanding of the business, leadership, and digital possibilities often lie with different teams that rarely collaborate effectively. The CEO’s job is to bring these pieces together and lead from the front, ensuring that the transformation is comprehensive and aligned with the business’s overall strategy.
A true business transformation—enabled by digital possibilities—requires a vision that only the CEO can provide. By understanding the business, spearheading leadership and change management, and harnessing digital capabilities, CEOs can reimagine their businesses for the future.
A Call to Action for CEOs
In conclusion, digital transformation is not a task that can be delegated solely to the IT department. It requires the full attention of the CEO, who must lead the charge in reimagining the business. The four-part model I’ve outlined—deep understanding of the business, leadership, digital possibilities, and reimagining the business model—provides a practical framework for navigating this complex process.
In these exponential times, disruption is inevitable. However, by embracing digital transformation and leading it strategically, CEOs can turn disruption into a competitive advantage and drive sustained success in their organizations.
Dr Dusty Alahakoon is a specialist in organisational transformation. He helps C-level leaders with strategy, leadership and change, while supporting transformation at personal, team and organisational levels. Dusty is an INSEAD Alumni with a Master’s in Coaching & Consulting for Change (MCCC). He has a Doctorate in Organisational Change Capability from Clermont Business School, a triple accredited business school in France. He holds an MBA, a Diploma in Marketing (UK) and is a Fellow of CIM (UK).
