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The Digital Leader

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The Digital Leader

Finding a Faster, More Profitable Path to Exceptional Growth


15 min read
8 take-aways
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Learn how to digitalize your business inexpensively and efficiently. 

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  • Applicable
  • Well Structured
  • Concrete Examples


Businesses need to adopt digital technology to compete, but leaders worry that the shift will be costly and will throw legacy practices into disarray. To take your business through a digital transformation that’s efficient, inexpensive and straightforward – and delivers tangible results – Ram Charan and Raj Vattikuti advocate working with a “digital enabler,” a company that understands both your business and cutting-edge technologies. The authors explain how to apply their principles to concrete cases, but, they note, it’s not new technology that transforms a business; it’s how executives lead the newly digitalized company.


  • Digitalizing your business doesn’t have to be complicated.
  • Digitalizing requires company leaders to adopt a data-driven mind-set.
  • To digitalize your business, establish an effective leadership team.
  • Keep your digitalization effort small; direct it to a specific “pain point.”
  • To move forward, hire a suitable “digital enabler,” a service provider who knows both technology and business.
  • After you launch your digital company, reevaluate your business model from a broader perspective.
  • When things go wrong, identify the problem and implement a solution as soon as possible.
  • Solving digital problems can have an immediate positive effect on your business.


Digitalizing your business doesn’t have to be complicated.

“Digitize or die” expresses a truth almost every executive acknowledges: Your business won’t remain competitive if you don’t incorporate digital technology – especially if your rivals are already deploying such digital tools as machine learning. Although evidence shows that digital technology improves performance at legacy and start-up companies alike, many executives still have reservations. They worry that digitalizing will be too costly, that benefits will be slow to manifest and that the digitalization process will undermine or even destroy the company’s established operations.

“Making your company digital doesn’t have to be a ‘big bang’ that upends the entire organization at once or is a never-ending cash drain. It is now faster, cheaper and easier than ever.”

Today, “digital enablers,” firms with expertise in technology and business, can adapt technologies – such as machine learning and artificial intelligence – to your company’s specific needs. Digitalization applies technology to the data your company needs to achieve positive results. The data’s completeness and quality is crucial. Algorithms are only as valuable as the data you feed them.

Digitalizing requires company leaders to adopt a data-driven mind-set.

Switzerland-based Coca-Cola HBC, for example, is a Coke bottler with operations in 28 countries. The executives of this enormously complex company couldn’t assess its performance or properly plan for future development because it lacked a centralized source of information or data that reflected the whole corporation. The CEO and other leaders needed Coca-Cola HBC to digitalize on a single platform that could synthesize its spread-out data into a “single source of truth.” The digital-enabling firm Fractal Analytics solved the problem. It designed a platform that synthesized data from all aspects of Coca-Cola HBC’s operations. The platform was up and running in 10 weeks.

“Quick access to common metrics across the business accelerated decision-making and assisted in setting data-driven priorities for the company… It altered, in the process, the mind-set of the leadership toward a more data-driven, collaborative model.”

An Indian company that manufactures pesticides and other agricultural products had a problem predicting consumer demand. Its predictions – derived from sales and input from regional teams – were often way too high or low, resulting in lower sales, greater waste or both. The company brought in a digital enabler, Altimetrik Corp., which created a platform that deployed machine learning and artificial intelligence and analyzed a variety of factors that are relevant in agriculture, such as plant diseases, rainfall, and even “historical patterns and correlations.” This data-driven approach dramatically improved sales predictions. The effort benefited the company’s revenues and its consumers because it now could offer more competitive pricing. This digital transformation project took only six weeks to complete.

To digitalize your business, establish an effective leadership team.

Digitalization or “digital transformation” includes adjusting technology, hardware and software, as well as bringing in tech experts to make sure everything works, but it doesn’t stop there. When your company can receive and interpret data from a centralized platform – a single source of truth – that will change how it functions, makes decisions and shapes its larger aspirations. Your leaders’ roles will change as well.

“The real performance benefits come when you and your team take ownership of the new systems and the new way of thinking about and managing your business.”

Assembling a leadership team prior to digitalization is the core of a philosophy that puts “people before strategy.” A poor decision at this stage could limit or even cripple the transformation’s effectiveness. The chief executive should collaborate with the company’s technical and business leaders to establish goals and to supervise the digital enabler. 

The CEO should lead the project in a personal, hands-on way. It might make intuitive sense to delegate digital transformation to a chief information officer (CIO) or chief technology officer, but this is a job for someone with a larger picture of the business and knowledge of the company’s overall industry.

To realize the benefits of a digital transformation, you need two specific forms of expertise on your team: The CEO provides the business knowledge and experience; the technology specialists bring knowledge of software, artificial intelligence, machine learning and algorithms. Traditional IT people may not fully grasp the digital tools you need most, such as artificial intelligence and machine learning, so you may need to bring someone in to handle those areas. If so, that person should report to the CEO.

Keep your digitalization effort small; direct it to address a specific “pain point.”

When you undertake a digital transformation, address the appropriate “bite-sized piece” first. To make digital transformation’s value obvious early on and to earn your employees’ commitment and trust, get off on the right foot. If you have a false start, or try mistakenly to transform everything at once, you can fail badly – squandering workforce confidence and wasting money and time as your competitors move forward.

“Giving your transformation team the task of assessing your value chain with care, identifying pain points and bottlenecks, particularly ones that squeeze cash flow, and singling out the right operation to liberate your business and executive thinking can propel your company on a path of previously unimagined growth and value creation.”

Visualize a complete, detailed picture of your value chain, from inputs to products, all the way to the consumer experience. Examples of typical pain points include too much inventory, inflexible pricing models, a lack of customer loyalty, and disorganized internal processes and controls. Identify your company’s significant pain points and turn them into individual projects and problems it must solve. With the help of your technology experts, you might be able to deal with an initial bite-sized project in less than three months.

Still, you may not get your first step right. Some 90% of digitalization efforts stagnate or fail entirely. Such failures demoralize leaders and employees, but don’t give up on digital transformation. It’s better to adapt or even start over.

To move forward, hire a suitable “digital enabler,” a service provider who understands both technology and business.

With your leadership team members selected and engaged in collaboration, you are well on your way to digital transformation. Now, you need to work with a digital enabler to digitalize your company fully. Digital enablement companies have multiple capabilities. They employ software engineers who know how to develop and use algorithms and artificial intelligence as well as how to construct a digital platform that will transform the way you do business.

“What is critical is that you remember you are hiring a partner and strategic collaborator who will be your guide and business solutions supporter for a long time.”

Selecting the right digital enabler is crucial. People in top-notch IT departments may believe they can play the role of digital enabler, but they rarely have a digital enabler’s combination of skills: an understanding of algorithms, data analytics and artificial intelligence – and the wherewithal to synthesize these features into a centralized, comprehensive platform everyone in your company can use with ease. They must have the technical skills to address your issues. In addition, an outside digital enabler can provide an objective, independent perspective of your company and its needs, and will be able to call on its experience with other companies and their problems.

Your digital enabler should focus full time on your transformation . The people you work with should grasp your pain points and orient toward providing a standardized single source of truth, even though your company is complex and data floods in from multiple sources. Select a digital enabler that can be a suitable strategic partner, working closely with people in your company. Once you find the right digital enabler, begin your partnership by identifying the source of your problems and figuring out the best way to address them.

Once you launch your digital company, reevaluate your business model from a broader perspective.

Develop a “digital business roadmap” to show how incremental progress on digitalization can produce economic results in a matter of weeks rather than years. It can transform your company’s culture, make it more collaborative and deepen your employees’ commitment – all at a reasonable cost. At this point, you’ve taken the first, incremental step, and you have established a “value multiplier” that encompasses your business’s technological and human dimensions.

“This is when senior management should step back and reimagine your business strategy and new sources of competitive advantage. ”

Now you are ready to move forward on the value chain. Begin by creating a platform that facilitates online interaction with consumers. This will increase sales and the flow of data that feeds artificial intelligence and machine learning. That data, in turn, will shape your promotional approaches, the products you offer and the markets you explore. For example, Walmart followed this course, and its market capitalization went from $200 billion in 2015 to $400 billion today. Adobe and Disney leveraged their digital transformation with similar results.

Engage your value chain and use your digital transformation to promote rapid, even exponential growth. Keep your eyes on your consumers and their needs. Employ innovative people who prefer new possibilities to old habits and assumptions. Set up a swift decision-making process with built-in accountability. Find creative ways to use your data flow, and train everyone to use or understand analytics. Make sure your leaders understand the cultural changes taking place in your company.

When things go wrong, identify the problem and implement a solution as soon as possible.

Digital transformations don’t always go smoothly. Sometimes even small projects hit unexpected roadblocks. When this happens, the CEO must remain engaged and stay focused on how well or poorly the digital transformation is progressing. In addition, the CEO needs to identify problems and seek immediate resolutions.

“Unless top leaders use their full tool kit – including actions like reallocating resources, changing people and coaching on behavior – they themselves can become the roadblock.”

Hiring an inappropriate chief digital officer (CDO) is a common stumbling block. Although bad hires can happen at all levels in every business, the issue is especially common, and problematic, when it comes to CDOs. That shouldn’t surprise anyone, given that the executives who hire CDOs typically know little about digital technology, machine learning or artificial intelligence.

A Malaysia-based manufacturing company with $5 billion in revenue exemplifies the problems a bad CDO hire can create. Its revenue came from diverse worldwide operations, including plants in China, the United States and Germany. The company managed these operations manually, but it was falling behind its competitors; it clearly needed to digitalize. 

Working with a headhunting firm, the company hired a young executive who had only thin experience. He proposed programs that alarmed the CEO. The new CDO wanted to transform the whole company at once, at great expense, but he didn’t seem to know how to carry a complex digitalization project through to completion. Acting decisively, the CEO moved the young CDO to a smaller project and recruited someone more experienced to address the overall transformation.

Solving digital problems can have an immediate positive effect on your business.

Sixty million Americans are gig workers. They face unusual problems – or pain points. Gig workers don’t have a single, centralized platform for payment and reconciliation. They must accept whatever payment method the customer prefers, but traditional payment methods come with high costs. 

Traditional banks do little for people in the gig economy, but a digital enabler who worked with a start-up designed a digital banking platform for gig workers. It featured “high-speed payment settlements” and brought in additional bank partners. The platform offers a fast, transparent, cloud-based banking solution and supports multiple uses, from managing payments to accessing traditional banking services. 

The platform is a single source of truth in that it contains all of a client’s pertinent information in one place. The business impact of digital transformation was significant in this case. In only a few months, the start-up was already providing banking services for hundreds of gig businesses. The start-up and its digital enabler eased – and reduced the costs of –  carrying out a business launch in the rapidly growing gig economy.

About the Authors

Ram Charan is also the author of Talent: The Market Cap Multiplier; What the CEO Wants You to Know: How Your Company Really Works; and Boards that Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way, among other titles that he wrote or co-wrote. Raj B. Vattikuti is executive chairman of Altimetrik, a digital business accelerator.

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