Digital Vanguard CxOs Team Up With CIOs to Achieve Value

Information technology’s ubiquity and centrality to business performance have inspired the current generation of senior executives to unprecedented levels of digital ambition. Upward of 80% of CxOs outside IT feel responsible for leading digital transformation, building digital business strategies and fostering technology-enabled innovation. Yet, only about one in five CxOs leads digital initiatives in ways that have a high likelihood of hitting value targets.1It should come as no surprise then that two-thirds of CFOs report that their organizations’ returns from digital spending underperform expectations.2 Why is this? What accounts for the difference between CxOs that successfully drive business outcomes from digital initiatives and those who struggle? The answer has profound implications for boards of directors and CEOs whose digital ambitions are at all-time highs.Due to these findings, we focused our survey of CxOs on trying to understand what makes senior business executives successful at maximizing returns from digital. To that end, Gartner gathered data on CxOs’ track records with value delivery. We also collected a lot of other data about these CxOs on demographics, behaviors, resourcing and interactions with CIOs. One of the topline findings of this Gartner study was that only 20% of CxOs consistently meet or exceed their outcome targets for their digital initiatives. Only one in five is quite low. Gartner has coined a term for these CxOs — the Digital Vanguard. They are very successful at digital, but they also approach and resource digital initiatives very differently from other types of CxOs.CxOs in the Digital Vanguard are characterized by three key things:Co-lead digital delivery with IT.Engage frequently with their CIOs.Devote more staff and attention to tech work than the rest.Rather than sponsor IT projects, they co-lead digital delivery with their CIOs, and dedicate their own staff (not just IT’s) to building, implementing and managing their business areas’ tech stacks.Digital Vanguard CxOs are 1.5 to 2 times more likely to achieve their value targets from digital.The ubiquitous impact of digital technologies should be a wake-up call for CxOs reluctant to take ownership of digital initiatives. It will be up to CxOs themselves to put digital to work in their business areas. This is a significant departure from the traditional way of managing technology projects, where business leaders sponsor initiatives upfront, but IT functions handle all of the delivery and maintenance. It will require:More CxO time dedicated to digital initiatives end to end, from strategy to execution.More business area staff dedicated to building, implementing or managing technology.New teaming structures that foster collaboration with technologists within and beyond dedicated IT departments.Ultimately, new CxO mindsets and behaviors.The payoff is substantial: CxOs who take on end-to-end digital leadership responsibilities for their respective business areas are twice as likely to achieve outcomes from their investments in digital technologies compared with those who abdicate their digital leadership role.Evidence1 2023 Gartner Board of Directors Survey on Business Strategy in an Uncertain World. This survey was conducted to understand the new approaches adopted by nonexecutive boards of directors (BoDs) to drive growth in a rapidly changing business environment. The survey also sought to understand the BoDs’ focus on investments in digital acceleration; sustainability; and diversity, equity and inclusion. The survey was conducted online from June through July 2022 among 281 respondents from North America, Latin America, Europe and Asia/Pacific. Respondents came from all industries, except governments, nonprofits, charities and NGOs, and from organizations with $50 million or more in annual revenue. Respondents were required to be a board director or member of a corporate board of directors. If respondents served on multiple boards, they answered for the largest company, defined by its annual revenue, for which they were a board member. 2 2023 Gartner Strengthening CxO Digital Leadership Survey. This survey was conducted to investigate how CxOs outside IT take on digital leadership and execution responsibilities, the extent to which they resource digital initiatives, and how they and their teams collaborate with their CIOs and IT departments. The research was conducted online from 22 February through 28 April 2023. In total, 618 respondents were interviewed in their native language across North America (n = 303; the U.S. and Canada), Latin America (n = 68; Brazil and Mexico), Western Europe (n = 145; the U.K., Spain, Germany, France, the Netherlands, Portugal, Belgium, Denmark, Finland and Luxembourg) and Asia/Pacific (n = 102; Australia, New Zealand, China, Hong Kong, India, Taiwan and Singapore). Qualifying organizations reported enterprisewide annual revenue for fiscal 2022 of at least $50 million or equivalent. Qualified participants had a role tied to a business unit (43% of respondents) or a corporate function (57% of respondents) and were members of senior management or above the midlevel management level (with 71% of respondents reporting to a CEO). Disclaimer: The results of these surveys do not represent global findings or the market as a whole, but reflect the sentiments of the respondents and companies surveyed.