By Ram Charan &Raj B. Vattikuti
Digitize or die is the business mantra of the day. Well, if you need an introduction and practical guide to implementing digital technology to create solutions, enhance efficiency, build collaborative muscle, deliver on promises, and improve the bottom line, The Digital Leaders is for you.
About the authors:
Ram Charan is a world renowned business advisor, author, and speaker who has spent the past 40 years working with many top companies, CEOs, and corporate boards. Ram is a leader who understands how to navigate complexity and deliver “the kind of advice you can use Monday morning." I have read a number of Charan’s books. They have always served me well. Fortune calls him, “the most influential consultant alive. “Read The Digital Leader and you will understand why.
Raj Vattikuti is a serial entrepreneur and philanthropist who has been dedicated to solving business challenges through innovative solutions for over three decades. He has a host of startups to his name, companies that have sold for over a billion dollars, a wall of awards for business success and acumen; and he believes in giving back to the communities in which he lives and works.
The book in a sentence (or two):
The Digital Leader is both a Primer and guide to business digitalization. We are not talking social media and fancy websites. As the subtitle says, this is about finding a faster, more profitable path to exceptional growth. This doesn’t say it all, but it says a lot. The authors write:
“We created this digital playbook to provide the guidance, approach, and real-world examples to help others achieve success in their own digital business transformation” (vii).
The result is simplifying business and technologies that bring speed, scale, and outcomes. The Digital Leader is written to let business leaders know that digital technology is within reach and is an absolute must to future effectiveness.
My quick take on The Digital Leader:
Ram Charan distinguishes between digitizing (1s and 0s) and digitalizing the business. Digitalizing means “combining relevant data with algorithms designed to quickly deliver the critical business outcomes the company needs” (4). The authors note, “The technology is not the change; what your leadership does with the technology, the process of experimentation and continuous innovation, is what generates the dramatic change” (7). The Digital Leader gives you a world-class business consultant with a world-class serial entrepreneur to guide your company into the world of AI, big data, and machine learning. Digitalization (utilizing AI and big data) is one way to reinvent your business and accelerate the creation of value with a single source of truth in a more collaborative culture focused on innovation (25).
Overview and Analysis:
If you have experienced Amazon and Netflix, then you have experienced the power of digitalization. Amazon has morphed from a savvy online book-seller into the world’s superstore. Netflix has 223 million subscribers to its digital movie and TV platform. Now Walmart, Adobe, and Disney are among the players who are growing their businesses by the tens of billions of dollars and increasing market capitalization as a result of digitalizing their businesses.
The good news, say the authors, is that SMBs (small to medium businesses) can also capitalize on the new technology. This book is a field guide to get you started. Part one lays out the essential principles and lessons. Part two provides you with 26 case studies. Both chapters and case studies are succinct and practical.
Part One:
1. The New and Simpler Path to Digitalize Your Business
2. Taking the First Bite
3. Getting Started
4. The Right First Step
5. Launch!
6. From Algorithms to New Models
7. What Can Go Wrong and How to Make It Right
Part Two: Low Investment, Hight Impact Digital Business Theme: Use Cases
My Takeaways:
1. Remember the essentials: Simplification, Innovation, Single source of truth.
2. Work from a single source of truth (SSOT):
I thought Charan and Vattikuti were talking to me when they wrote about a CEO who:
“mentioned his deep frustration over the kind of data that he and his leadership team had access to. It was not centrally organized, so it came in different formats and followed different standards. It did not necessarily measure the same things in the same way in different markets, and it was not available in a format they gave executives a full picture, with easy comparisons between markets, in real time. Worst, it was organized into disconnected silos, which some senior executives jealously guarded, obscuring the big picture” (12).
The solution to that quagmire is operating from a single source of [accurate/true] data (SSOT).
3. The senior leader must be hands-on: “Successful initiatives have a common thread: the top leader stays deeply involved throughout. One obvious benefit is signaling that the project is important, but there’s more. It means the CEO can provide coaching when behavior needs to change, get a conflict resolved, or make a fast decision on human or financial resources to keep things moving at pace” (74). The leader must “stay deeply engaged throughout” the process (67).
4. Take things in bite-size pieces: The authors do not recommend going “wholesale digital.” Start small, identify a "bite-sized project" and develop a precise problem statement, with a short runway to completion (usually 10 weeks or less). This creates an easy win and paves the way for a future engagement in the digitalizing of your business.
“This book explains our way of thinking about how to move forward in digitalizing your business by taking small steps that yield observable, measurable results in the near term” (7).
The bite-sized focus was a constant drum beat throughout this book. The bite-sized problem should be a pain-point in your organization that you must solve.
5. Utilize outside help: “We are convinced that for a vast majority of companies, using outside help to take on bite-size projects one after another is the best way to digitalize a business" (6).
“While it may seem logical to delegate the building of your digital company to your CIO or CTO, in almost all cases that would be a big mistake. You are not requesting an IT fix-up. It is a job for those with business vision and hands-on experience in your most important business operations, working closely with others who understand what can be done with the algorithms, software, and data analytics” (25).
6. Hire wisely: While digitalizing is not new, it is a newer field, so it is probably going to be tough finding the right person to assist with your efforts. Take the time! The authors share some very practical stories of big companies that have lost significant ground and time because they did not hire carefully enough.
7. The importance of a precise problem statement: Don’t try to digitalize everything, start with one thing. Be very clear as to the business need, why it is important to address this need, and how you will solve it (thought digitalization).
8. Find a digital enabler: Digitalizing your company is a complex process designed to create simple solutions. You’ll need help. You will be looking for software engineers, people skilled in deploying algorithms and AI enhancements. Build your list of candidates. When you get ready to hire help, re-read pages 54-55 as they are very helpful in laying out an interview process which allows two candidates to compete for the opportunity on a fair and level playing field.
9. Bring people along: This was helpful to me. “Being one of those people who is naturally curious, the CEO was determined to learn more and to take his team on the learning journey with him. They spent about a year speaking to potential vendors who operated in the space and to other companies internationally. The CEO arranged for tutors and people who had digitalized their company to come to the office and share their experiences with the team. He gathered a number of case studies to work through. The board was looped into the learning as well” (75–6). This is a new learning for most, don't assume. Take your people along on this learning journey.
10. The power of off-the-shelf resources: You don’t have to “make it from scratch.” The authors write, "We have found that 80 to 90% of the software tools, the algorithms, and platform elements can be off-the-shelf products. This is often a strength rather than a shortcoming” (52). Another point noted elsewhere is don't modify the program. Adapt your organization to the software, not the other way around as you will probably be importing existing inefficiencies.
Terms you will encounter in The Digital Leader:
1. Block chain: Block chain for business enables entities transacting with one another to utilize a distributed ledger technology, access and utilize the same information at the same time to improve efficiency, build trust and remove friction (IBM).
2. White label: When a product or service removes their brand and logo from the end product and instead uses the branding requested by the purchaser (www.thatcompany.com).
3. “A solution agnostic of the existing system.” This is not a theological term, rather it is a generalized digital process so that it is interoperable among various systems, and not proprietary.
4. SMB: The acronym for "Small to Medium Business" (129).
The author piqued my curiosity about this book:
Execution: The Discipline of Getting Things Done: by Larry Bossidy and Ram Charan. Bossidy was the former CEO of Honeywell. Their book spent 150 weeks on the New York Times bestseller list. I read this book years ago; it is time I pick it up again.
Words to ponder:
1. Technology: The change you seek is not technology, but what the leadership does with technology to improve the business (7).
2. E-commerce: “For most retail businesses, e-commerce is a necessity, not an option” (16).
3. Innovation is not negotiable: “You and your leaders must embrace a rule that innovation is not negotiable. The talent must be focused on experimentation, and they must tolerate occasional failures and see them as learning opportunities. These are a means of generating revenue productivity, a strategic must” (65).
4. The senior leader's role: The leader must “stay deeply engaged throughout” the process (67). How are you doing that?
Conclusion:
There is little to critique and much to appreciate about The Digital Leader. Sure, some terms needed defining (for me anyway) and the untrained might need help deciphering some acronyms. Those small challenges were more than made up for in (1) Applicability: There were a couple of times I thought the author was talking directly to me about our organization. (2) Simplicity: There is a vast difference between simplistic and simple. The authors helped me to get past the complexity of AI and algorithms and machine learning to see the simpler side of digitalizing our efforts. (3) Case studies: The 26 case studies (“Low Investment, High Impact Digital Business Themes”) were very helpful in identifying entry points; however, I wish I had seen one that spoke to higher education directly. (4) Succinct: This book was substantive, but short. Keeping it simple!
I highly recommend The Digital Leader to business leaders, academic administrators, and leaders in the church; particularly to those accustomed to non-integrated, manually-inputted spreadsheets, and departments that cooperate, but remain largely siloed.
Applications:
OMW (167) Are you using your FULL toolkit?; (70) The questions the leader asks. (52-54) Looking past the polish.
YEP: The company managed all of those things well considering they were done manually or on spreadsheets, but its clunky forecasting was becoming increasingly problematic and putting the company at a competitive disadvantage. Digitalization had become a necessity (69). There was a critical need for trusted information across the organization (88). There was lack of data visibility, leading to manual metrics and inefficiencies (88). There was a lack of master data.
Team: Moving quickly from ideation to launching solutions is extremely important. However, there is a complex world of ideation to production—multiple steps, virtual global teams, different processes, different technologies, different tools sets, different skill sets, and so forth, all of which amplify the complexities. The lack of a standard way of enforcing and unifying the process, avoiding redundancies, and measuring productivity is challenging (112).
LBC: (1) Equip in this space; (2) Off the shelf; (3) Christian Leaders Roundtable; (4) LBC for hire; BAM certificate (apologetics, worldview - Psalm 4:8; Ex 18:23); (5) Redemption Narrative; (6) Cyber Security
