Digital Leader

Establishing A Digital Transformation Owner Using The Goldilocks Principle

When it comes to defining leadership for digital initiatives, organizational structure is notoriously difficult for companies. Should digital transformation be led by IT or driven by operations? Perhaps marketing should own major digital change since digital initiatives are often highly customer-facing. Some companies have chosen their CEOs to manage these transformations directly, but is that the right approach? Or should companies committed to advancing in the digital space go as far as to hire a chief digital officer (CDO)? If so, to whom should that leader report?

Over the past several years, we've wrestled through all these questions. Our goal in 2016 was to build a direct-to-consumer digital business through our app and completely overhaul legacy systems to reengineer our processes and customer service strategies with a startup mindset and agile approach. Early in our journey, we learned the critical importance of establishing one clear owner of our digital transformation.

Ultimately, we recognized the wisdom in the Goldilocks principle, or the concept of "just the right amount." Now, if you read my previous article, you're probably thinking, "First she talks about Legos and now Goldilocks? Helping her boys with their virtual learning must really be having an effect on her." Well, the Goldilocks principle is often applied to the business world and helps us understand which leaders, strategies and systems will maximize effectiveness while minimizing redundancy and excessive scope.

At MoneyGram, when we initially identified an ownership structure, our first two attempts ended up being on completely different extremes:

• Too Hot: The first leader was given ownership and a budget to build separate from the broader organization to increase our speed to market. However, this structure lacked connection to the core business, which led to feasibility issues, integration challenges and costly duplication of efforts, among other issues.

• Too Cold: Next, we swung to the other extreme by creating more of a project management structure where the individual was so embedded in the organization that they were an individual contributor with a "dotted line" organizational chart structure working to influence product, pricing and marketing decisions. However, the ideas being proposed ultimately were crowded out by competing priorities, and every issue had to be escalated to the C-suite for resolution.

After sampling both approaches, we learned several lessons that have allowed us to maintain just the right balance moving forward. Below are three ways the Goldilocks principle informed our decision.

1. Find a leader who is forward-thinking, yet realistic.

Selecting a tech-savvy, digital guru to lead transformation efforts might seem like a natural choice. The innovative energy and in-depth understanding of the digital world this type of individual brings to the table is compelling. However, if this leader is too forward-thinking, they may lack a clear understanding of the current business model and overlook true customer needs. Their vision for the future of the company and complexity of new systems can easily overwhelm colleagues. Additionally, legacy customers and departments may struggle to migrate to new processes if they are implemented too quickly, which results in additional costs to maintain multiple versions of systems.

A leader of digital transformational change must be able to balance a vision of forward progress with an accurate understanding of the status quo. This person must have internal knowledge of the business and leadership skills to drive change without pushing too hard. In other words, they need just the right amount of innovative initiative, informed by a solid understanding of the business and customer needs.

2. Allocate adequate funding, but don't neglect accountability.

Even the best leader cannot drive change effectively if they do not have the appropriate amount of resources, budget, and influence to properly carry out the job. At the same time, even in the case of funding, there is a "too much" scenario that could render a digital transformation wasteful or ineffective (especially if your goals are ultimately related to efficiency and cost savings). An effective leader will work to secure the right amount of budget and resources to achieve transformational goals, while also backing up the funding of their budget with ample metrics and milestones.

My company's digital transformation ultimately succeeded when the appropriate amount of funding was allocated to the project. This required taking ownership of the budget, earning leadership buy-in and continually presenting a plan for strategic goals, both short term and long term.

3. Give your digital leader autonomy, but keep them connected.

Finally, a digital transformation leader must have enough autonomy to work on overarching digital initiatives across the organization without operating independently from the rest of the business. We've learned through trial and error that the digital leader must have enough authority to lead widescale change without becoming detached from the people affected by that change.

Creating a completely separate business unit may seem conducive to executing a transformation strategy with fewer interruptions. However, research suggests that successful transformation of any kind takes a people-first approach, which requires integration and frequent communication across all levels and departments of the organization. After all, digital transformations are much more about organizational change than they are about technology.

Ultimately, the digital transformation owner must be high enough in the organizational structure to have the authority and relationships to get things done, but they cannot act only as a figurehead. True ownership means that leader is thoroughly involved every step of the way. As an insider, this type of leader's biggest advantage is knowing the ins and outs of the business and people involved, which helps your team create solutions to problems that actually exist.

In the end, we found that balance produces benefits. Leading through a digital transformation requires just the right type of leader who has just the right amount of resources and autonomy to create meaningful change.

This Article Source is From : https://www.forbes.com/sites/forbesfinancecouncil/2020/12/16/establishing-a-digital-transformation-owner-using-the-goldilocks-principle/?sh=26dfe1db6e10