Analysis: The need for digital leadership

(The views expressed in this article are solely those of the author.)

What binds digital technology, digital strategy and the digital economy together? The answer is effective digital leadership, but most organisations struggle with it. According to the Forrester report ‘The State of Digital Business 2014’ 74 per cent of companies surveyed have a digital strategy but only 15 per cent believe they have the capability to implement it.

Outside the digital team, few executives understand their firm’s digital strategy. Only one-fifth of CEOs set a clear vision for digital. While businesses acknowledge the disruptions digital technology will bring them, digital is still not driving business strategy.

Digital creates turbulence in organisations by disrupting traditional business models while at the same time offering innovative opportunities to create new sources of value. Many organisations still make do with bolting on digital strategies to their existing businesses. What they really need is a business strategy for the digital age, one firmly underpinned by digital leadership.

Brisbane leading by example

In April 2013 not long after launching the Digital Brisbane strategy, I was contacted by Dave Aron, Vice President and Gartner Fellow in the CIO Research Group, inviting me to contribute to a research report ‘Let’s Get Digital: A Template for Digital Business Strategy’ that he was preparing for Gartner’s 4000 CIO clients.

It would include case studies from 10-12 organisations including Alibaba and the city of Boston. He invited me to provide a case study about Digital Brisbane. This was a significant opportunity to get international exposure for the strategy so I accepted.

As Gartner sees it, the digital vision established for Brisbane is broad-based, connecting infrastructure, entrepreneurship, investment, innovation and education.

• Entrepreneurship and innovation. Encouraging digital start-ups through programs such as grants, mentoring and coaching in digital innovation; facilitated matchmaking events, pairing SMEs with digital service providers; and a digital capability online self-assessment tool for use by businesses.
• Education and skills. A Chair in Digital Economics at a local university providing research facilities and executive education programs to the business community, including CoderDojo Brisbane — a free, not-for-profit coding club for young people — and consideration of a CDO academy.
• Infrastructure and access. A cyber-city program contributing to the evolution of public online services, a fully integrated “way-finder” system (featuring signage, maps and attractions integrated with an interactive mobile digital experience), and a great online and mobile experience for residents and visitors alike. This includes access to free Wi-Fi in many locations throughout the city (including 20 parks and libraries) and access to certain council datasets.

Gartner subsequently published the case study as part of its report and also used it as the basis for keynotes at its 2013 symposia in Orlando, Barcelona and the Gold Coast, increasing its exposure to over 20,000 people.

When I sat in the audience of the Gold Coast event and heard Dave announce to an audience of 1,600 that Brisbane was “an example of global digital leadership” I felt surprised, proud and also curious as to what the term digital leadership actually means and what an organisation or in Brisbane’s case a city must do to deserve such an accolade.

Brisbane’s approach

In Brisbane’s case digital leadership stems from the decision not to ignore digital technology but to embrace it as an essential facet of the city’s economic development plan. From the outset its mantra has been “less gadgetry, more strategy”.

The creation of a digital strategy and the appointment of a Chief Digital Officer – Brisbane was only the second city in the world to do so – were recommendations made by the Lord Mayor’s Economic Development Steering Committee in its November 2011 report “Brisbane’s Unique Window of Opportunity”. This secured a place for digital in Brisbane’s Economic Development Plan 2012-2031 and led to Brisbane becoming the first city in the world to publish a digital economy strategy.

The strategy aims to position Brisbane favourably in the global digital economy, estimated by McKinsey in its report “The Internet Matters” to be worth $20 trillion globally. With Brisbane’s 120,000 SME’s generating more than half of the city’s $135 billion economy but with only 30 per cent of them being actively engaged in the digital economy, according to the Brisbane Digital Audit, increasing their digital capability is the top priority.

The need to strengthen Brisbane’s start-up ecosystem in relation to other cities in Australia and provide the right environment in which to start and sustain new digital businesses is also a focus for action. The strategy’s 5-year target is to double the number of businesses selling online and support 250 digital start-ups, some with global potential.

While the strategy focuses on SME’s, start-ups and also on residents – the three pillars – it can also be categorised in three phases – Implementation, Investigation and Reputation.

Implementation – engage SME’s and start-ups

Digital Brisbane has become an important trusted source that enables SME’s to familiarise themselves with digital technology, learn how it adds value to their business and equips them to engage confidently with suppliers. It has had 9,000 face-to-face engagements and 20,000 online interactions during its first year, exceeding expectations and reflecting the strong desire among businesses to engage in the digital economy.

An innovative approach to encouraging skills development and entrepreneurialism spans the 7-17 generation through Coderdojo Brisbane, the 18-30 generation through the Lord Mayor’s Budding Entrepreneurs program and the start-up generation (30 and above) through the Visiting Entrepreneurs program. These take place in relatively low numbers but have a significant impact on the communities that the strategy targeting.

Investigation – measure impact

The investigation phase started with the Brisbane Digital Audit which used a digital capability framework to create a snapshot of the city’s digital landscape and generate valuable outputs which informed and shaped the development of the Digital Brisbane strategy.

The strategy states that a one per cent lift in Brisbane’s digital readiness score will translate to a 35 per cent improvement in annual productivity growth and an AUD$560 million lift in gross regional product. Metrics will be developed which all Brisbane’s digital economy to be measured and the impact of the strategy itself to be calculated.

Online self-assessment tools will be made available so that SME’s can measure their own digital capability and match this with advice on how to improve it. The Chair in Digital Economics will create provision for the study of digital economics, enable digital businesses, lead digital innovation and collaboration and produce digital research output.

Reputation – raise Brisbane’s profile

The reputation phase aims to make Brisbane a digital innovation hub by promoting the benefits of digitally driven business growth through a global online showcase and focused digital events. The national and international media as well as conference organisers have already decided that the Digital Brisbane strategy is of interest to them and their audiences. Requests for interviews and conference presentations are received regularly.

The themes mainly relate to e-government and digital leadership and the audiences tend to be at C-Suite level. In most cases, it is the principles behind the Digital Brisbane strategy that are of interest, how it was developed and how it reflects digital leadership. The rarity of the Chief Digital Officer’s role also attracts interest. Digital Brisbane events being held in the lead up to the G20 Global Leaders’ Summit are likely to increase the spotlight on the thought leadership aspects of the strategy, generating even further interest from the media.

Where to find digital leadership

Everyone is looking for digital leaders, specialists who can articulately promote transformation across the company. They develop strong digital strategy mission statements and use their professional community to build a strong network of innovators. They deliver tangible returns such as new revenue streams or faster time to market.

Digital leadership impacts on organisational culture and collaborates across the enterprise to provide improved customer services. It defines what digital business means to the enterprise and outlines the potential implications for each senior executive’s area of responsibility. It helps organisations to decide what type of digital strategy they need.

The human face of digital disruption

Digital disruption is defined as the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services. The human side of digital disruption consists of customer expectation (people adopt new technology much faster than businesses do), workforce expectations (many employees have a better digital environment at home than they do at work) and finally the Chief Digital Officer (the CDO).

Gartner predicts that by the end of 2014 more than 20 per cent of government organizations will have appointed a CDO and that by the end of 2015 25 per cent of all companies will have appointed one. The CDO is a change agent whose job is to advise organisations how to survive and thrive in an increasingly digital world. He or she is synonymous with digital disruption.

Choosing the right digital strategy

Not all organisations need to appoint a CDO in order to assert digital leadership. It’s far more important that the organisation has C-level executives that understand digital and its value proposition not only in their own business units but across the entire organisation.

According to Gartner many CEOs don’t know why they want a CDO or what the CDO will do. Search requirements for a CDO can therefore lack the specificity of other C-level executive searches. This results in flawed searches and failed outcomes.

Organisations must decide what type of digital strategy is right for them before deciding what type of digital leadership they need. The digital economy has grown too large to accommodate a one-size-fits-all approach to digital strategy so a number of different variants have emerged.

A DIGITAL MARKETING STRATEGY is particularly suited to digital novices and for businesses that are active in local markets. They can use the strategy to promote business and influence sales using the web, mobile, social media, EDM, SEO and advertising. This type of online presence enables people to find a business online and allows the company to build a community of interest.

For medium to large sized enterprises that are more advanced in their digital maturity and wish to add transactional capability to their online presence there is the DIGITAL BUSINESS STRATEGY. This can start with using digital tools in-house to increase productivity then evolving to full e-commerce. Organisations who do this understand the value of integrating their business strategy with their digital strategy. Having this capability also enables them to expand into international markets.

A DIGITAL TRANSFORMATION STRATEGY is synonymous with large organisations such as Procter & Gamble but companies from fifty employees upwards and with the right digital mindset can also digitally transform. It occurs where digital champions in the executive team decide that digital must drive the business. It requires enterprise wide implementation to achieve digital transformation, so there needs to be adoption across the organisation and every business unit must be given digital performance targets or KPI’s.

The objectives of Brisbane’s economic development plan and the role that ICT must play in achieving these make a DIGITAL ECONOMY STRATEGY the right instrument to motivate businesses, support start-ups and provide community online services. This type of strategy is implemented by cities, regions and countries and embraces the other types of digital strategies in the ecosystem.

The next moves

Digital leadership is not about developing a strategy from the inside out. It means acquiring an external perspective whether that’s following the lead of another city, listening closely to your customers or hiring a CDO to disrupt your business.

Most organisations are still in the analogue age, talking about digital but not living it, understanding it, or supporting it with the right decisions. Implementing the right digital configuration for your business and being able to measure its impact on your business is vital. Don’t define your needs solely in terms of technology – define them in terms of your business.

Above all, use digital technology to make your business more accessible, more receptive and more appealing to your customers. Because your customers are looking to you for digital leadership more than anyone else is.

Kieran O’Hea is the inaugural Chief Digital Officer of Brisbane, whose term concludes on 9th July 2014.

In July 2012, he moved from Dublin to take up a two year position for the then unique role, which has included leading the development of the city’s digital economy strategy, one of the first of its kind in the world. The 5-year Digital Brisbane strategy was designed to drive digital growth and investment in the region and it has exceeded its targets in its first full year of implementation. The strategy aims to double the number of businesses selling online, support 250 digital start-ups and deliver digital projects that improve the lives of residents. The creation of a university Chair in Digital Economics, the first of its kind in the world, is currently underway, helping to position Brisbane as an emerging digital city. Kieran’s contribution as Chief Digital Officer to what Brisbane has achieved has encouraged him to take a wider interest in digital leadership and what organisations must do to create value out of digital disruption.