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Digital transformation: MIT's Westerman shares new lessons
Want to learn from the best of the best about digital transformation? MIT researcher George Westerman has done extensive homework for you. As a Principal Research Scientist with the MIT Initiative on the Digital Economy, Westerman leads the group's research portfolio on digital transformation. In his latest book, “Leading Digital,” Westerman and his colleagues studied more than 400 major organizations in traditional industries around the world to learn how they’re using digital technology to innovate. Through this research, Westerman and his co-authors identified a set of firms they call “Digital Masters” - companies doing an exceptional job using technology to transform the way they do business.
We caught up with Westerman in advance of the upcoming MIT Sloan CIO Symposium to get his take on why the term “digital transformation” annoys some tech leaders. We also wanted to hear about one of his favorite digital transformation success stories (Hint: It involves a paint manufacturer in India.) And we wanted to see if he could come up with a good analogy to describe the very term that some IT leaders love to hate. He didn't disappoint.
The Enterprisers Project (TEP): The phrase “digital transformation” has gone from buzzword to business imperative. Yet, many IT executives say they hate the term. Why do you think that is?
Westerman: Nearly every senior executive I talk with is trying to figure out how to drive digital transformation in his or her company. That means the people they work with, or sell to, want to talk about it too. In digital transformation, as in many business and technology trends, there can be a bandwagon effect where everyone shapes their message to link to the current hot topic. Many IT leaders are rebranding themselves as digital leaders, and many vendors are linking their services to digital transformation. It’s funny because, five years ago, we encountered a lot of resistance to using the term. Now it seems everybody is using it.
However, beyond basic fatigue at hearing the term, there’s another potential concern for IT leaders. As companies start thinking about digital, many decide that digital transformation requires capabilities well beyond what IT can do. They appoint digital leaders and create digital units that can feel like a threat to IT leaders. This is completely legitimate. But freezing out IT is not. My research shows that the companies we call Digital Masters find ways for digital and IT leaders to work very closely together in driving digital transformation.
TEP: In “Leading Digital” you studied more than 400 global organizations. Is there one example that stands out as a true sign that any company, in any industry can use digital technology to change how they do business?
Westerman: There are examples in every industry. It’s difficult to choose just one. However, one of my favorites is Asian Paints. The company transformed from a maker of paint in 13 regions of India to being a unified provider of paint, painting services, and even home renovation services in 17 countries around the world. The company’s leaders saw the potential of digital technologies such as mobile, social, IoT, and analytics to make the company something very different from what it used to be, with benefits for the company, its customers, and its business partners.
TEP: Alphabet’s tech incubator Jigsaw is collaborating with The Washington Post on the “Sideways Dictionary” to help readers understand tech jargon by documenting analogies that explain tech terms. We know CIOs love a good analogy. What’s one of your favorite analogies to explain digital transformation?
Westerman: Successful digital transformation is like a caterpillar turning into a butterfly. It’s still the same organism, but it now has superpowers. Unfortunately, when it comes to digital transformation, many senior execs aren’t thinking about butterflies. They’re just thinking about fast caterpillars. And it’s hard to keep up with your competitors if you’re crawling ahead while they can fly.
TEP: You’ve been quoted as saying: "There’s never been a better time to be a great CIO or a worse time to be an average one.” What advice do you have for CIOs who fall in the average camp, yet want to make the leap forward?
Westerman: Our book “The Real Business of IT” has a lot of good advice on how to make yourself more relevant and strategic to the senior leaders of the firm. If you’re not already a strategic partner, try some of the techniques in it. If you already have the ear of the senior team, then start sharing your experience and advice that’s relevant to digital. What could a future vision of the company be? How can digital governance work well? What are some pilots or quick wins we could try today? The more you show value to the company, the more you’ll be valued by the company’s leadership team.
TEP: At the MIT Sloan CIO Symposium, you’re leading a panel on how CIOs can prepare their organizations for the future of work. As tech workers face the potential of becoming displaced by AI and robotics, who should take responsibility for training on new skill sets?
Westerman: It would be nice to think that companies and governments would be responsible for finding new roles for the people who are displaced by technology. But more realistically, people need to be responsible for their own professional development. Stay abreast of what is happening with industries and technologies. If you’re in a job that will die soon, do what you can to shift to another. Hopefully, our society will find ways to help people who lose in the race against machines. But people are much better off taking control of their own destiny.