Finding leaders
Just as it would not be acceptable for a Minister not to understand how her departmental budget works, it is not acceptable for her not to understand how technology affects her brief.
The model of digital transformation we have described in this book is one driven from the heart of an organisation; a powerful centre providing momentum to change the whole. The journeys taken by specialists from periphery to acceptance in large organisations is similar; be they statisticians, scientists or economists, all needed a strong, coherent voice in the bureaucracy’s centre before they gained widespread acceptance. Unfocused collaboration did not provide that. Digital is no different.
However, gripping change from the centre is a strategy that can only been sustained for so long. The influence of a powerful central unit in most big organisations fluctuates over time, oscillating from all-powerful to virtual bystander. Controlling everything from the centre is not sustainable nor desirable forever, though this will come as news to a handful of all-powerful ministries like the UK’s Treasury. To embed the new course set by a central digital team before you run out of political capital or burn out with exhaustion, you will need to bring in leaders who can take forward the agenda elsewhere. They are the ones who will ensure the departments or business units can stay the course.
A lack of technologically literate leadership has long been a structural weakness for public institutions as well as for many private corporations. At the executive level of the UK civil service, there has been very little expectation of basic technology knowledge from senior leaders. Officials could publicly confess to knowing nothing about technology without fear; professing a similar level of ignorance in finance or economics would simply not fly. Worryingly, many of these leaders have been equally candid about having little interest in remedying this weak spot. Not knowing is forgivable. Not having the curiosity to address the weakness is much less so.
This is not exclusively a government problem either, and many private enterprises are even more reluctant to acknowledge it. In our experience on both sides of the fence, the bar of technology embarrassment among leaders remains remarkably low in most large, legacy-driven organisations. Almost every major company of long standing will have a number of senior managers on the books that print off every email they are sent. Everyone still experiences meetings lengthened by 15 minutes while the attendees mess around with the overhead projector settings. This is normalised by leaders who accept technological incompetence as being OK. Imagine the same breezy amateurism applied to, say, accounting. You would expect a few costly, embarrassing mistakes as a result. It’s a wonder there aren’t more IT disasters.
The problems created by technology-incurious leaders are legion. They set a cultural expectation within the organisation that technology is no more than a question of plumbing – pipes and wires that can be ignored (unless something goes wrong) while the grown-ups deal with the real strategic issues. Ambitious juniors take note of this attitude, and grow to see technology projects as a path to a stalled career. Any capability or interest the organisation had in technology ebbs away.
This, in turn, leaves the organisation helpless in the face of technology suppliers, who need no excuse to gently ease large amounts of money in their direction. Don’t blame the suppliers for their rapacity – they are merely following the incentives put in front of them – large bureaucracies are culpable for creating a scenario where they have outsourced their ability to make sensible decisions about technology.
When it comes to technology leadership, one task for the digital team tends to be a tough one – getting rid of the actively useless. If the generation of chief information officers (CIOs) or IT directors in your organisation is the biggest blocker to digital transformation, prepare for some hard conversations.
The goal is not to move on people who disagree with you. Dissenting voices based on experience and knowledge of the legacy you’re stepping into are valuable, and should be kept at all costs. Constructive scepticism will allow the digital team to identify and address traps they may otherwise miss. The layer you need to remove is those leaders whose view is devoid of curiosity and openness. These are the people who will make every miniscule step forward a battle. Left unchecked they will tire you out, and see you off. There’s no way to teach, coach or circumvent your way around them. Find them an exit.
The first wave
Before getting into the more painful conversations required to shake up the organisation’s technology leadership from within, the digital institution first needs to establish a group of departmental leaders.
Putting some structure around the relationship between the central team and the departments is an important early task. There are very practical reasons for this. Creating a group of people who are empowered to represent all the various parts of the organisation keeps the number of conversations the digital team has to handle with the rest of the business to a manageable number.
Good candidates for this first group of digital leaders are people one step away from board level in their department: senior enough to carry their organisation’s view, but not so far up in the boardroom echelons that they’re unlikely to turn up to any of the meetings. In the first year of transformation, a department’s digital leader tends to be a self-selecting position; if they’re curious and optimistic enough to take on the role, they’re likely to be a decent candidate.
In the UK government, the group of departmental digital leaders met monthly. Unusually for a governance meeting in government, the first meeting opened up with an honest admission – it wasn’t certain what decisions the group would be making. What was certain was that it would be making some decisions that applied across the whole of central government; this was not a talking shop. It was not always for the centre to set the agenda or outcome of these meetings; departments that disagreed would work out their differences between themselves and report back, rather than have the central digital team pick a winner.
The value of setting up a Digital Leaders group was twofold. Not only did it create a single decision-making body for digital issues that had representatives from right across the organisation, it also provided a licence for shutting down the plethora of digital and technology meetings that had proliferated. This is a good general rule for the first two years of a digital institution: never start a new regular meeting without shutting down at least two existing meetings.
Internet-era leaders
Having established effective governance, the next task is to bring in a new type of technology leader to operate at department or company board level. Some of these may already exist among your first group of digital leaders, and others will be elsewhere in your organisation. However, there is a good chance you will need to look outside for talent too. You will need two different types of leader.
Chief Digital Officer
The Chief Digital Officer (CDO) is the individual responsible for the user’s end-to-end experience of the organisation. As far as the outside world is concerned, they are the person ultimately accountable for ensuring the services provided by the department are simpler, clearer and faster for users. They work first time. They are clear. Online transactions join seamlessly with any offline stages. An alternative is provided for those unable to use the web.
WIthin the organisation, the CDO is the loudest voice on the board speaking up on behalf of the user. They will also be the strongest advocate and backer for the digital ways of working we’ve outlined in earlier chapters: agile, multidisciplinary, bringing together digital skills with more traditional corporate competencies. They will support and educate the board on the practices and operating models of the internet era that they may not be familiar with.
Being a Chief Digital Officer is a big job. It can also be a tricky one to land within a traditional executive committee. In a government department, the board may include separate directors of policy and operations (two disciplines that digital explicitly brings together), or directors of specific policy areas (which digital services may cut across). A CDO is a horizontal role, working across an organisation much like a Chief Finance Officer would. However, it is also integral to what the vertical business or policy lines are doing. A CDO presents fundamental challenges to the legacy structure of a big organisation. This is not an accident. However, that does make it a difficult and sometimes isolating position, and not an easy one to stick.
Nonetheless, being tenacious in forcing this structural conversation at the top of an organisation is one of the key roles for a CDO. There are two ways of ducking it, and neither turn out well. In the first case, the CDO ends up running a business or policy area – effectively looking after one of the verticals. This allows them to transform one bit of the organisation, but leaves the rest of it largely untouched. The other option – operating as a central function along the top of an organisation, like a finance or HR department – runs the risk of becoming peripheral and getting stuck in the world of ‘innovation’. Chief Innovation Officers produce delightful prototypes and alphas. They generate excitement and demonstrate the possibilities of change to an organisation. But can they actually change the business? Be wary of becoming a Chief Innovation Officer.
Chief Technology Officer
If the role of the CDO is to open the organisation’s eyes to the why and how of transformation, the CTO is there to bring deep technology knowledge back into the heart of the strategic conversation.
When faced with technology questions with fundamental implications for their businesses – moving data into the public cloud, investing in new systems, experimenting with artificial intelligence or Merkel tree encryption – far too many executives are forced to basically guess. For advice they are left to rely on technology suppliers (who are not the most neutral observers), management consultants (ditto), tech-utopian or tech-phobic articles they’ve read, or the managerial instincts that have served them to date. None of these guides could be described as foolproof.
The CTO’s role is not really to stop the board from making decisions that are idiotic; any candidate worthy of the CTO title will steer well clear of outright incompetence. No, the CTO is there to guide the board away from making decisive calls that are logical to people with a limited understanding of technology and the market conditions associated with it, but are clearly dangerous to somebody in the know. For example, buying a new proprietary HR and finance system on a five-year deal from a supplier that the department has already worked with for ten years might seem sensible to a non-technologist. The fact that the system is a complete pain to use (and ruinously expensive) may just about crop up on the leadership radar. What may not is the fact that systems like this are likely to become commoditised – which is to say, cheap and easily swapped with similar alternatives – in less than five years. Through a combination of ignorance and inertia, the department would be locking itself into the wrong deal, and constraining itself strategically as a result. A CTO stops this kind of mistake.
Externally, the CTO’s role is more subtle than that of the CDO, who must take the rap for how the organisation presents itself online. The CTO’s primary external function is to publicly demonstrate – through attending conferences and meetups, blogging and open communication – that their government department or organisation can be taken seriously by people who genuinely understand technology. As a recruitment message, that’s a great deal more than most big companies can offer.
Finding new leaders
The old cliché says that the definition of madness is doing the same thing on different occasions and expecting different results. The way most organisations recruit digital and technology leaders is mad.
One of the most valuable things a central digital team can do is to help change this. As a large, legacy-laden organisation, you’re unlikely to find your internet-era leaders by following typical search tactics. Nor will you persuade them to join you with the usual banquet of benefits. Bringing in these people will require more flexibility and a little creativity.
The first place to look is within your own organisation. This may be a non-starter if you have outsourced all your capability for technology and transformation. But on the latter, in particular, you might well be lucky. Don’t just look for the known high-flyers. You should be looking for the angry people, those with ability and drive who have become intensely frustrated with the organisation’s technological or cultural pathologies. They will know where the bodies are buried, and have already come up with the workarounds for failing corporate policies. Challenge them to create a working environment that doesn’t drive them away, and promise them the space to have a proper go.
If not enough people can be found from within, you’ll have to go searching for them. This is not an easy task. The number of people with the right set of skills to digitally transform large organisations is small, though growing. The temptation is to try poaching somebody from one of the Silicon Valley digital giants. Depending on the individual, that might be the right call. However, don’t be taken in by the brand. Amazon, Facebook and the like are mighty companies, but they were digital from the beginning. You are not. The challenge of moving a legacy organisation to the internet era offers a different set of problems.
Look for companies and institutions who have changed their character and business within a context that works for them. Delve into your networks. As board-level players, having a bond of trust with your new CDO and CTO is essential if they are to bring to the table what you need. Having them as a known quantity, second- or third-hand, can be a helpful start.
For their part, prospective CDOs and CTOs joining from outside your organisation will be testing the water with you for signs of the conditions we covered in the earlier chapters of this book. By joining your organisation, they are taking a gamble with their careers. They will want to know more about what has precipitated the job being advertised in the first place. Where’s the crisis? What are they, personally, expected to do about it?
They will be looking for strong leadership, at political or top-tier executive level. Meetings with the minister or CEO to give a candidate the chance to look into the whites of their new boss’s eyes will count for a lot more than chats with a HR director who doesn’t quite follow why they are hiring a CDO anyway.
One of the biggest worries for organisations who recognise the need to hire internet-era leadership is that they won’t be able to afford them. We have seen governments baulk at the very idea of bringing in CDOs and CTOs because of the perceived cost. These skills are scarce, and in demand. They will not be cheap. However, the truth lying behind this fear is not really about pay.
Public institutions in particular have a fantastic card to play when it comes to attracting leaders: their mission. Several brilliant people who saw the GDS’s open communications contacted the team directly to ask if they could join in. It’s hard to offer bigger, more impactful problems to work on than what a government department will typically tackle on a daily basis. However, the executive benefits package of most public sector organisations – relatively low pay, relatively high job security, pensions and holidays – all appeals to a certain type of person at a particular stage of their careers. The profile of many prospective CDOs and CTOs doesn’t fit this. They may prefer to do shorter, high-intensity stints of three to five years in a job before moving on. The career incentives for officials discourage this. To bring in internet-era leaders to government – and indeed, most traditional hierarchy-led organisations – means unpicking the benefits package.
Many governments know this. But perversely, rather than looking at the structural issue putting off this kind of talent from joining their organisation, they have instead defaulted to hiring interim consultants to do a more expensive job of the role a permanent CTO could fill. This exact problem is replicated all the way down through digital (and other) specialists at all levels of the organisation. These interim solutions are more expensive and leave little knowledge behind in the institution. Yet they persist because the pots of money assigned for consultants and permanent staff are separate. There is no logic to this.
Finding your new leaders is not easy, and only half the battle. Making your organisation ready to receive them in is equally important.
Summary