Digital transformation works best when co-owned — but only if you do it right

Two years back, research firm Gartner polled CIOs and found that 45% of them were beginning to work with their C-suite peers to bring IT and the business together on digital transformation initiatives.

“CIOs face a paradigm shift, sharing leadership responsibilities with CxOs to deliver digital success, while also contending with budgetary pressures and transformative technologies,” said Mandi Bishop, distinguished VP analyst at Gartner. “To successfully lead digital transformation initiatives, CIOs must co-own efforts with business leaders to place the design, delivery and management of digital capabilities with teams closest to the point where value is created.”

Given the expanding role CIOs play in the business — and the pressure that is being placed on CxO counterparts to become more technologically savvy — cross-departmental collaboration is an inevitability that can also create more value for your company.

But there’s more to it. Yes, you can place digitalization projects at the business points where value is created, but everyone must be in lockstep agreement that this is what you’re doing. And it requires greater attention and investment from those who ultimately benefit from IT’s half of the deal.

Co-ownership means co-investment

All too often, the CIO has gone in alone to the CFO, CEO, or board to argue the benefits of a digital project in order to obtain funding. A sounder approach is to confirm the need for a digital solution to a particular business problem with the CxO in charge of that business area, and to then go in together to the budget meeting so that both the technology and the business values can be effectively presented.

Secondly, there is no reason the IT budget must bear the full costs of a co-owned project. A growing number of digital projects have achieved success because the CIO and their C-suite business partner have stood together to advocate for these projects, agreeing to cost-share project expenses in their respective budgets.

Budgetary cost-sharing between IT and business departments is vital to making the co-ownership transformational model work. When you have a CxO peer agreeing to commit to digital projects with their money, everyone has a cash stake in the game, making it harder for the business exec to excuse themselves from project meetings because they “have other fish to fry.”

Direct CxO participation is paramount

Why is having your CxO counterpart actively participating in digital project meetings so important? Because staff members follow their leaders’ examples.

If they see their CxOs skipping out on digital project meetings, staff members will feel free to do so themselves. When this happens, IT ends up standing alone as the only department that is consistently pouring brainpower and time into projects — and when that happens, the project failure odds go up.

Why is that the case? Because the business department that originally wanted the project has now effectively walked away — and will return only if the project succeeds at or above expectations. If the project underperforms in any way, it will be conveniently labeled as “IT’s fault.”

The other side of CIO-CxO collaboration: CIOs themselves

First known as data processing, IT was originally carved out of accounting departments in the 1960s. From there, the nomenclature for company technology departments evolved into MIS (Management information Systems), and now IT (Information Technology). Along with this change in department nomenclature, the perception of CIOs began to change. CIOs went from data processing managers running back-office “engine rooms” to CIOs now seated alongside other CxOs and the CEO in strategic meetings.

While most CIOs welcome this role expansion, there is still the “engine room” legacy that plays in their minds. How will they prove their newfound “worth” and business acumen to their CEOS?

The answer for many is: By single-handedly shepherding in digital projects such as a new ecommerce revenue stream or assembly-line automation that enables faster and cheaper product times to market. CIOs can do this by down-playing collaboration with other CxOs so they can take the credit and build IT’s singular value as a strategic and transformative business force in the eyes of the CEO and the board.

While that mentality and approach might cement the CIO’s stature as a leader of meaningful projects for the business, it doesn’t bring the business together for value creation in repeatable ways.

Forging a united digital front

It was Alexander Graham Bell who said, “Great discoveries and improvements invariably involve the cooperation of many minds.” This still holds true today — and in digital projects more than ever.

A first step for CxOs and CIOs toward a new, unified value creation paradigm is to root out the historical roadblocks that stand in the way of executive cooperation. CxOs must fully engage in digital projects from start to finish, and CIOs must be willing to accept co-star (instead of star) billing in projects. Most CIOs are making this shift in thinking, but CxOs still lag in project participation.

Second, CIOs must gain CxO hard-dollar budget commitments for digital projects. When both co-fund and advocate for digital projects in front of the board, CEO, and CFO, both have skin in the game.

Third, co-assign executive leadership responsibilities for key project milestones. The CxO might be responsible for defining the business use case and what a specific digital solution must deliver, while the CIO might be responsible for developing the solution. In both cases, however, the two executives must come together with user and IT project staff members to review what has been decided and to field questions. In all cases, there should be a clear message to user and IT staff that the CxO and the CIO are on the same page and in an active project collaboration.