How CEOs should approach digital transformation
Enel's Francesco Starace offered some top tips at a Fortune CEO Roundtable yesterday.
Good morning.
One of the conundrums of corporate digital transformation is this: Because it has such profound strategic implications, it has to be led by the CEO. But the CEO often lacks the knowledge to make critical technology decisions.
So how to proceed? That was the discussion at a fascinating Fortune CEO Roundtable yesterday, held in partnership with Tom Siebel and C3.ai. Francesco Starace of Enel—the Italy-based power company, second only to State Grid of China in size—laid it out clearly. “Ninety percent of the problem is that the people who are supposed to drive digital transformation are the most ignorant,” Starace said. He surveyed his employees on digital knowledge and found there was no correlation to age, gender or nationality, but there was an “inverse correlation between digital conversance and rank in the corporation.”
Some of Starace’s advice for solving the conundrum:
1. “Get the priests out of the room.” Don’t be held back by digital experts who are quick to tell you what you can’t do.
2. “Move everything into the cloud,” which gives you the flexibility to “compress time, make mistakes, fix, make mistakes, fix.”
3. Create a risk-taking culture. Noting that utilities are inherently risk-averse, Starace sponsored an employee contest around “My Greatest Failure.”
Mindy Grossman, CEO of WW, offered an additional piece of advice: Be clear about your purpose. “It’s not technology for technology sake,” she said. “What are you in pursuit of with that technology? What is the impact that is purposeful?”
And Brian Niccol, CEO of Chipotle, added that it’s also important to focus. “We asked, ‘What is the one thing we are going to do?’ And the answer was ‘digital kitchens,’” which separated digital orders from in-store orders and allowed Chipotle to maintain a high-quality experience for both.
In a separate CEO Roundtable on The Longevity Economy, Joe Coughlin, author of a book by the same name, dropped this nugget:
“The technology industry is the only industry in the history of the world that has the chutzpah to blame the customer for not knowing how to use their product.”
Coughlin is the author of this recent piece about technology policies to help prepare for the coming wave of baby boomers hitting old age.
More news below. And don’t miss Emma Hinchliffe’s profile of the person who may well be the next Treasury Secretary.
Alan Murray
@alansmurray
alan.murray@fortune.com