Industry Insights

Digital Transformation: Who is in Charge?

The Digital Transformation posts are getting great feedback.  Thank you and keep it coming!

Just think of what has happened in the last 16 years: we have the rise of Facebook, Twitter and other social networks. We have pervasive mobile devices, particularly smart phones, tablets and recently wearables. Ecommerce in some categories has become a powerful, fast -growing force. And most recently we have the arrival of companies such Uber and Whatsapp that have grown from nothing to multibillion-dollar capitalization in the space of a couple of years.

Future of FMCG

Of course it’s tempting to think that “this could never happen here” but just think of the Honest Company, the mission-led fast-moving consumer goods company founded by actress Jessica Alba. This company was founded in 2011 by Miss Alba with no prior manufacturing or retailing background, and little capital…the first venture capital input was in 2014. Last year Forbes voted her richest self-mad woman in America and her company is now worth over 1 billion dollars, and she continues to disrupt established players.

She couldn’t have done this without the use of digital technologies, and she represents a new generation of CEOs who can also be thought of as Chief Digital Officers  Let’s explore this a bit further, eh?

Who is driving Digital Transformation?

I’m sitting with Eva Heukäufer, a Strategy Consultant with IBM, who is looking at leadership of Digital Transformation in FMCG companies.

Digital Transformation

Trevor: Eva, tell us what types of companies you have been looking at and what are you finding so far?

Eva: Well, I’ve been looking at 21 European FMCG companies.  I measure where they are in their Digital Transformation journey, and also look at the leadership of digital initiatives.  So far what I have found is: everyone recognizes that digital is a top priority, but there is no common understanding of what a digital strategy is.

Trevor: Really?

Eva: Yes, for some companies their digital strategy is only related to marketing, but for others digital strategy is truly cross-functional.  You can see it in the job titles – “Digital and Marketing Development” versus “Digital Transformation Leader.”  If you look deeper at the responsibilities you can see even bigger differences – some are focused on specific change programs around important topics such as ecommerce and media, while others are about bringing brand innovation and new business models to life through digital.

Trevor: Are these Board level roles?

Eva: No, usually they are not, but they probably should be!

Trevor: What Recommendations would you make based on what you have seen so far?

Eva: Digital Transformation for me is really about re-invention of FMCG companies to be competitive in the future.  This has to be led from the Board, and become a priority across every function, not just Marketing.

Trends in Digital Transformation leadership

From Eva’s work the role of “Chief Digital Officer” is still being debated in FMCG companies, but there do seem to be three leadership starting points:

  1. CxO level Chief Digital Officer appointment.  Drive Digital Transformation from the top
  2. Cross-functional digital working group, sponsored at CxO level.  Build alignment and a coalition for change across the business
  3. Transformation leader working with Corporate Strategy. Work Digital Transformation into strategy plans, budgeting and capability-building initiatives (e.g. alliances with Silicon Valley, M&A etc)

What do you think?  Where are you starting with Digital Transformation?

 

Trevor

IBM, Distinguished Engineer

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