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Nobody Has a Monopoly on Digital Leadership

It’s a perennial dilemma. As information technology becomes ever more strategic and pervasive, effective Digital Leadership is needed by just about every organization. But where will this leadership come from? Should business executives be expected to drive important – but often highly complex – technology initiatives, or should IT professionals assume the lead? Teamwork is always a good idea, but who is ultimately in charge?

Digital Leadership

Too many executives and managers are unprepared for the challenges of the future, while many IT organizations are struggling to overcome the back-office focus and culture of the past.

While such questions have been debated for many years, they are now more vexing than ever. In a business climate increasingly shaped by smart products, social marketing, advanced analytics, Do-It-Yourself technologies and disruptive innovations, many companies recognize that they face a serious Digital Leadership shortage. Too many executives and managers are unprepared for the challenges of the future, while many IT organizations are struggling to overcome the back-office focus and culture of the past. The results are all too familiar: missed opportunities, project disappointments, time and cost overruns, lack of accountability, organizational confusion, and so on.

As depicted in the figure below, we believe that nobody has a monopoly on Digital Leadership. This implies more than just the need for teamwork. Since information technology affects virtually every aspect of the modern firm, employees, managers and executives, Enterprise IT and even customers can all become digital leaders within their respective and highly inter-related domains. As our use of the pie chart image suggests, we see all four leadership sources as being of roughly equal importance.

We have a number of current and upcoming research projects and advisory services aimed at helping clients close the Digital Leadership gap in their organizations. These projects and our overall thinking are briefly introduced below.

Executive Engagement

As we wrote about last month, too many senior business leaders have acted as if they really believed that IT Doesn’t Matter. Consequently, if they engaged with IT at all, they focused mostly on cost, compliance and personnel issues. But this is changing. Increasingly, our work is appealing not just to CIOs, but also to CXOs who know that their firm must use IT to become more innovative, responsive and competitive. We are currently developing a new Digital Leadership research programme and advisory service to support such forward-thinking executives.

Double-deep employees

Within internet-driven environments, leadership is often more bottom-up than top-down. For example, our consumerization and HR 2.0 research emphasizes the importance of double-deep employees, those individuals who know both their job – marketing, engineering, customer services, finance, etc. – and the IT that is relevant to that job. While being double-deep will be expected of the employee of the future, there are real shortages in the marketplace today, creating important leadership and career opportunities.

Ecosystem co-creation

The ability to co-create value with customers and business partners – in areas such as ideation, support, recommendations and customization – is one of the most important aspects of becoming more outside-in. But successful and sustained co-creation requires a very different form of business leadership, as firms must nurture communities, establish collaborative platforms and reward external contributions. In these areas, we are delighted to be working with Professor Venkat Ramaswamy, who will be speaking at our US and UK Executive Forums this year, and whose latest book The Co-Creation Paradigm is now available.

Revitalized Enterprise IT

IT organizations have grown up expecting that IT professionals should lead important IT-based initiatives. But as IT moves to the front of the firm, Enterprise IT’s back-office legacy and culture can be a major barrier. This was one of the key messages of our 2013 report Building Your Firm from the Outside-in. This year, we are focusing on the Business/IT Relationship Management function. While BRMs have traditionally sought internal business/IT alignment, increasingly they must now become outside-in digital leaders. Rather than spending the great majority of their time with their internal constituencies, BRMs must increasingly work directly with customers, partners and suppliers to facilitate new value creation. Our Outside-in BRM report will be available later this spring.

One size does not fit all

The differences between Leadership and Digital Leadership are narrowing.

Of course, there is no one Digital Leadership formula. Indeed, the balance between executive, employee, ecosystem and Enterprise IT leadership goes a long way toward defining the technology culture of the firm. However, most firms have one thing in common. The differences between Leadership and Digital Leadership are narrowing. Those firms that develop effective Digital Leadership dynamics will enjoy substantial advantages in the technology-intensive marketplaces of the future. Helping firms embrace these changes will be a major LEF focus in the months and years ahead.


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Research Commentary

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