What does “going digital” mean in practical terms for a company? For a workforce? What are the most critical skills and capabilities needed to enable digital transformation?

Going digital—leveraging digital technologies to connect organizations, people, and processes—leads to changes in strategy that can reshape a company or disrupt an industry. In this report, we describe the skills a digital leader needs (think digital and business knowledge, start-up mentality) and examine the relative merits of positioning various functional heads as your company’s digital leader.

Roughly two-thirds of executives believe that digital transformation is a top priority for their companies, yet even more say that their organizations will need to find new leaders to succeed in the digital economy, according to one 2018 survey.

“Lack of digital leadership” is the number one barrier identified by companies that have just started out in digital transformation, a 2015 study by Harvard Business Review found.

So, what does it take to close the gap between the talent companies have and the talent they think they need?

We investigate the role of the “digital leader:” the executive or executives responsible for leading the company’s overall digital transformation effort. This report describes what these leaders do (their role); how they do it (the skills and competencies they need); who they are (their title and reporting line); and where they come from (their functional and business experience and whether they came to the role from inside or outside the organization).

These research findings will be useful to organizations that have yet to address their digital leadership needs or that want to reevaluate their options. The report provides examples of how companies buy, build, borrow, redeploy, or replace talent to fill the digital leadership role. One of its most striking conclusions is that the last of these options—replacing incumbent leaders with new ones—has proven to be a necessity for many companies.

It’s not an exaggeration to describe digital transformation as a radical disruption for the large, long-established companies we interviewed. It requires a significant investment of focus, commitment, and time. It also requires that leaders operate in ways that might have been antithetical to leadership in the past.

To meet these new demands, many organizations assign responsibility for digital transformation to a senior executive, the digital leader. In practice, the top digital leader may occupy a newly created position such as chief digital officer (CDO). Alternatively, digital transformation may be driven by one executive—often the chief technology officer (CTO), chief information officer (CIO), chief marketing officer (CMO), or even the CEO—or jointly led by two or more executives. We evaluate a range of reporting structures and offer insights about where companies find digital leadership, either inside or outside the organization, and how they develop it within their broader leadership team.

The role of digital leader differs from that of established roles in that it requires someone who can also serve as a:

• Digital visionary
• Digital scout and explorer
• Digital influencer, business advisor, and collaborator
• Digital connector
• Digital catalyst and change-maker
• Digital role model

To be successful, the digital leader needs these skills and competencies:

• Curiosity and continuous learning
• Enterprise thinking
• Visionary mindset
• Start-up mentality
• External antennae and networks
• Skill in using data
• Ability to “work” the organization
• Digital and business knowledge
• Comfort level with new leadership behaviors
• Tolerance for uncertainty

Wherever the digital leader sits in senior leadership, the position may not be permanent, our research finds. Rather, the ultimate objective is for digital leaders to put themselves out of business by helping to grow digital capabilities company-wide.