7 Key Principles to Govern Digital Initiatives
An MIT SMR initiative exploring how technology is reshaping the practice of management.
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As digital disruption has become a major force across industries, organizations have responded with significant investments in digital transformation.1 Unfortunately, recent research suggests that most of these efforts fail to meet or exceed expectations.2
The reality for many organizations is that digital transformation consists of an ungainly confederacy of digital initiatives revolving around new technologies, a few Skunk Works projects, and random acts of digital enablement.
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In other words, they suffer from poor governance. Indeed, research we conducted in 2019 suggests that governance-related concerns are a high priority for the people leading digital transformation efforts in companies. (See “Top Digital Transformation Challenges for Organizations.”) The data reflects feedback from 1,030 digital executives and shows that companies falter in many areas when it comes to providing structure and governance to digital transformation projects, from finding alignment between business processes to assigning ownership for change efforts.
A well-governed digital program must satisfy different stakeholders across an organization and be flexible enough to accommodate multiple types of initiatives, while ensuring enough rigidity to achieve strategic alignment and efficiency. Unfortunately, most organizations rely on traditional governance approaches that prioritize compliance and risk mitigation. Thus, executives need to rethink their governance approach for digital transformation in a way that prioritizes active enablement over control. As Andy Weir, CIO of Bankwest, points out, in digital governance, “The executive’s role is to remove ‘blockers.’ They must help teams by demonstrating rapid decision-making and removing impediments to progress.”
Based on our experience working with more than 100 companies on digital challenges as well as interviews with 55 digital executives, we’ve distilled seven key governing principles that are linked to successful digital business transformation.
Digital Governance Principle 1:
Centralize information about digital initiatives rather than the initiatives themselves.
Surprisingly few digital leaders have a complete or transparent picture of their organization’s portfolio of digital initiatives. Indeed, executives frequently confront a fragmented digital landscape, with varying levels of ownership and responsibility.
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About the Authors
Nikolaus Obwegeser is a researcher at IMD’s Global Center for Digital Business Transformation. Tomoko Yokoi is a researcher at the Global Center for Digital Business Transformation. Michael Wade is a professor and Cisco Chair of Digital Business Transformation at IMD in Switzerland and coauthor of Orchestrating Transformation: How to Deliver Winning Performance With a Connected Approach to Change (IMD, 2019). Tom Voskes is a managing partner at SparkOptimus.
1. “Worldwide Digital Transformation Spending Guide,” IDC, Nov. 2018, www.idc.com.
2. L.-P. Baculard, L. Colombani, V. Flam, et al., “Orchestrating a Successful Digital Transformation,” Bain & Co., Nov. 22, 2017, www.bain.com.
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