How European Leaders Are Tackling Digital Transformation Differently
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Put three teams of climbers at the base of Mont Blanc with the task of reaching the 4,810m summit, and three different game plans will emerge. Which route will they take? What equipment do they need? Will there be a navigator, or will the team navigate together? Each team faces the same colossal challenge, but their responses to it can differ greatly.
Shifting an entire organization of people, processes, and products into the digital era is also a huge task. It requires thousands of decisions, big and small, and no C-suite prepares in the same way. In fact, a new FT Focus survey of finance, IT and operations/infrastructure leaders in Europe highlights three very different routes they can take.
France: The data-driven decision-makers
Leaders in France are focusing heavily on using data to inform their digital transformation plans. Our research shows that they are most likely out of all countries to prioritize providing a clear roadmap for investment in new tech over the next three years (32%, compared with a 24% global average). In order to decide where to best spend their time and money, 72% of French leaders say that their IT function is increasingly adopting a portfolio approach to managing its assets – far higher than the 53% global average.
French leaders are also supercharging their planning with advanced technologies – particularly artificial intelligence (AI). Some 70% agree that C-suite leaders are using AI technologies to more effectively refine their strategies and to scenario-plan – far ahead of the global average of 47%.
BNP Paribas uses AI throughout the business for a range of activities, including automating daily tasks and speech recognition. Its chief digital officer Hugues Even explained that AI solutions are developed as web platforms and APIs, which are used across the entire group. “We have a very agile way of doing things [with AI], leading us to review our traditional IT infrastructure,” he said. “AI can completely transform the operation and culture of a business.”
»Read more: Societe Generale reduces cloud waste
Germany: The all-rounders
The new business models and dynamics thrown up by digital transformation have created an urgent need for the C-suite to collaborate more closely: no single executive leader can face the challenge alone.
This is not easy, but our research shows that German leaders are embracing collaboration, with 88% saying that digital transformation has increased C-suite collaboration when developing new products and services. This is significantly above the global average of 68%.
When Deutsche Telekom reshuffled its C-suite² in 2018, it appointed CHRO Christian Illek to the role of CFO. A slightly unusual career progression, the move demonstrates the new fluidity of leadership roles. “Rotation within the DT [Deutsche Telekom] board has become a good tradition by now,” said Illek.
Similarly, research from leadership advisors Spencer Stuart³ shows that more than two-thirds (68%) of CIOs at the 30 largest German firms are internal appointments, which shows the value that German companies place on internal experience and relationships. And for this kind of fluidity to exist, there must be regular collaboration to enable leaders to get up to speed with each role.
And our survey shows that it is not just on new product development where German leaders are teaming up: three-quarters of respondents say the CIO and CEO are deeply aligned on wider technology strategy – far ahead of the global average of 56%. The CIO and CMO in Germany are also very much aligned, according to almost half (47%) of respondents – again, ahead of the 38% global average. This close alignment between key executive positions is a core characteristic of German leaders, according to the FT Focus research.
And it seems that collaboration at the top of the organization pays dividends across the business. Almost three-quarters (73%) of German leaders say they have a proven track record of successfully piloting frontier technologies, and if these new investments fail, 8 in 10 agree that they quickly identify and act upon the issue.
The UK: The agile enablers
Leaders in the UK are turning to agile methodologies and processes to fuel their digital transformation. The research shows that a fifth of organizations have a clearly defined agile framework, with performance indicators that map the success of agile across all projects and business units. This figure is ahead of both the European (16%) and global (16%) averages.
As agile practices have become mainstream, organizations are turning their attention to trying to effectively quantify their impact across the business.
»Read more: 5 Agile metrics to optimize business value
Examples of UK organizations adopting agile methodologies go back a long way: BT, for instance, is reported to have used them for software development in 2001. More recently, Thames Water set up ‘digital development factories’ that use agile techniques to improve its information systems capability, including a data factory to deliver real-time data across customer and operational systems, and a robotics factory to automate manual back-office processes.
UK leaders are also reaping the benefits of a strong focus on agile. A third (33%) say agile practices are accelerating the adoption of new technology; 28% say it has enabled their overall digital transformation; and more than a fifth (23%) say that their customer experience has improved as a result.
“In climbing you are always faced with new problems in which you must perform using intuitive movements, and then later analyze them to figure out why they work, and then learn from them,” said renowned rock climber Wolfgang Güllich.
Businesses across Europe are likely to find that their mountain, digital transformation, requires a similarly iterative approach. As they stare at the peak, they might find that they have a lot to learn by analyzing not only their own game plans but also those of organizations in other countries.