December 11th, 2018

WANTED: Digital Leaders

Conversation with Cristina Álvarez and Borja González del Regueral

Although we tend to focus on technology, culture is actually the most important part of digital
transformation in any organization. In this strategic process, it is essential to have digital leaders
throughout the organization so that a common language can be developed. In this conversation,
IE Business School Professors Cristina Álvarez and Borja González del Regueral discuss the in-
depth reflection process that all companies should undertake to ensure that this transformation
process constitutes a true investment. In their view, technology is actually the easiest part.

Cristina Álvarez: Technology and changing consumer habits are the big disruptions currently
affecting the business world. These factors, plus the transformation, have given rise to a
different sort of leadership style. Technology has been around for many years, but nowadays
the combination of cost and processing capacity is practically marginal. Digitalization is now
affordable for any organization.

Borja González: In both the telecommunications world—where you come from, Cristina—and
in the energy industry, the change has to do with viewing technology as an investment rather
than an expense. However, resources are often allocated without a clear objective. Hence the
need for digital leaders: people who know how to shake things up and set goals for the use of
tech-based resources.

Cristina Álvarez: People often say that there’s a lot of hype around the digital world. I’ve heard
this in many different forums. In my experience, however, very few organizations really bother
to reflect on how they want to use these tools. Investing in big data or blockchain doesn’t make
you digital; it’s a more reasoned process. The most important thing is the concept of core
transformation and its impact on the bottom line.

Borja González: Indeed. Ninety-nine percent of companies are traditional, but they all want to
be like Google. How can we compete if we all want to be GAFA? It must be said that not all
organizations have the same needs or the same type of customer. Over time, companies have
started to grasp the need to develop a strategy that treats technology like any other asset,
rather than as an end in itself. The transformation therefore takes on a cultural dimension, which
is actually the most important part of the process.

Companies have started to grasp the need to develop a strategy that

treats technology like any other asset, rather than as an end in itself.
The transformation therefore takes on a cultural dimension.

Cristina Álvarez: That’s the key. Technology is the simplest part of the change. The most
complicated part has to do with people. The impact cuts across the entire organization. As
consumer habits change, companies must abandon traditional vertical structures, so if they
don’t have digital leaders in place throughout the organization, the transformation simply will
not happen.

Borja González: And to do that, they have to adapt their discourse. It’s a complex but necessary
process to get the various teams to understand each other, with technology as a recurring
theme.

Cristina Álvarez: The common language has to be the language of business. In other words, how
does a particular tool help to improve the business? Employees with technical profiles
in marketing, finance, or human resources need to understand how this transformation process
benefits them. It’s a collective journey in pursuit of a common objective. Of course, no one
should expect results in the short term.

Borja González: Indeed, it’s a long journey guided by customer satisfaction. You have to turn
180 degrees and focus on the customer. It sounds like a very subtle change, but everything goes
along with it. Human resources must identify the talent and skills that are needed to lead teams
in this direction.

Cristina Álvarez: Let’s get back to the topic of leadership. It’s been shown that the world’s top-
performing companies are those that understand—at every level of the organization—
that technology is a factor that will disrupt their business model. We could go on to discuss the
level of risk assumed and the speed with which the company acts. No two transformations are
the same.

Borja González: I would add another component: honesty. Before you can design a strategy, you
need an honest diagnosis: a 360-degree assessment of the organization. Knowing what you
have, what you need, where you are, how you got there, and where you want to go—these are
key questions in any prior reflection process. Not knowing the starting point is a common
mistake.

You have to be the first, even if the product is imperfect. The customer will
always buy that convenience.

Cristina Álvarez: This is an internal reflection that each area must undertake. Failure to do so
can lead to major fractures during the change process.

Borja González: I agree. Without this sort of internal analysis, there cannot be a proper
transformation, just cosmetic changes. Also, it’s important to realize, when you adopt
a strategic approach, that many questions without clear answers will crop up along the way.

Cristina Álvarez: Digitalization has prompted a reassessment of the functions of each

department. Therefore, no two business areas will move at the same speed. In today’s world,
speed is the most important competitive factor in business.
Borja González: And turnaround times are much shorter. Therefore, you also need a different
mindset—one that is more flexible with regard to new uncertainties. This brings us to concepts
like creativity, experimentation, and curiosity. There is no such thing as failure, only lessons
learned.

Cristina Álvarez: The way to learn is by doing. It’s better to have an improbable product on the
market than none at all. It provides competitive advantages and agility. But you have to be the
first, even if the product is imperfect. The customer will always buy that convenience.

About the Authors:

Cristina Álvarez

Academic Director of the Executive Master in Digital Transformation & Innovation Leadership

Borja González del Regueral

Professor of Business Analytics and Innovation at IE Business School

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