2. Product Leadership and Digital Savviness

Introduction

Today, we’ll discuss a vital aspect of product leadership within large organizations: the role of digital savviness in leadership. While some companies have embraced digital expertise at the senior level, many still face a gap. As digital product leaders, it’s essential for us to understand this gap and work towards bridging it to drive meaningful results.

In a study conducted by MIT in 2020, nearly 2,000 global companies were surveyed, revealing that only 7% of C-level executives are “digitally savvy”—meaning they possess a comprehensive understanding of technology’s impact on business success through education or experience. This gap poses challenges but also offers opportunities for digital product leaders to educate and align their organizations.

Digital Savviness in C-Level Executives

The study revealed interesting variations in digital knowledge among C-level roles:

• High Savviness: CTOs and CIOs generally have more digital expertise, which isn’t surprising given their roles in technology and IT.
• Moderate Savviness: Roles like CEO and Head of Marketing often have a basic understanding but not necessarily a deep, strategic digital insight.
• Low Savviness: Sales, HR, Legal, and Compliance are typically less digitally informed, especially in industries where digital transformation is less integral, like construction, arts and entertainment, and agriculture.

Industry Variances

Unsurprisingly, industries like media, software, and telecommunications have more digitally savvy executives, while traditional sectors—such as construction, finance, and agriculture—tend to lag in digital expertise. This disparity impacts companies’ ability to innovate, cross-sell, complete digital transformations, and adopt agile, data-driven practices.

The Impact of Digital Savviness on Performance

Digital savviness among C-level executives has a tangible impact on organizational performance, especially in areas such as:

1. Innovation: Companies with digitally savvy leadership generate 60% of their revenue from new products, compared to just 18% in companies without digitally informed leaders.

2. Cross-Selling: Savvy companies see 53% of their revenue from cross-selling opportunities, as opposed to 15% in companies without digital expertise.

3. Digital Transformation: The ability to achieve advanced digital maturity is markedly higher, with almost 70% of digitally savvy companies completing their transformation versus 30% of less digitally advanced firms.

4. Agility and Decision-Making: Companies with digital expertise adopt modular, agile practices more effectively, showing quick learning and adaptability. They also utilize data to make automated, informed decisions, scoring around 80% in these areas versus 25-30% in less digitally equipped companies.

5. Leadership Style: Digital companies are more likely to adopt a “coach-and-communicate” management style, moving away from traditional command-and-control. They encourage accountability, foster a digital culture, and promote innovation more effectively.

The Role of Digital Product Leaders

As product leaders, our role is to educate C-level executives and boards about the digital landscape and the impact digital can have on the company’s results, customers, and internal processes.

Bridging the Digital Gap: Practical Steps

To help bridge this digital gap, I implemented a strategy at Lopes by introducing two key programs: Business Drops and Digital Drops. These initiatives aimed to cross-pollinate knowledge between business and digital teams, building mutual understanding and stronger collaboration.

Business Drops

In our monthly All Hands meetings, we invited business leaders from various departments to discuss their area’s challenges, goals, and potential intersections with digital. This helped digital teams gain insight into core business functions and understand how digital solutions could add value.

Topics Covered:

• Franchise operations
• Real estate agent journey
• Property registration
• Mortgage credit unit
• Primary and secondary markets

By equipping the digital team with a deeper understanding of the business, we empowered them to make decisions aligned with business needs.

Digital Drops

Each month, we also held a Lopes Labs Update to present our digital accomplishments and insights. During these sessions, we dedicated a few minutes to a “Digital Drop,” where we introduced a digital concept to the entire company.

Topics Covered:

• Project vs. Product
• Uncertainty and digital transformation
• A/B testing (with practical examples)
• Agile methodologies and product development

These sessions enabled the business teams to understand fundamental digital concepts, such as why we run A/B tests or why agile methods are critical for flexibility.

The Benefits of Cross-Pollination

This cross-pollination helped business and digital teams understand each other better, paving the way for a more collaborative and efficient work environment. Digital teams, equipped with knowledge about the business, could better align their efforts with organizational goals. Meanwhile, business teams, now more digitally informed, could make better use of digital resources to achieve their objectives.

Conclusion

Digital savviness in leadership is not just an advantage; it’s essential for sustainable growth and transformation in the digital age. As product leaders, we play a crucial role in fostering this understanding. By introducing digital concepts to senior leadership, aligning business and digital teams, and encouraging cross-functional learning, we can bridge the digital gap and help our companies realize their full potential.

By investing in a digitally savvy culture, we support a future-focused organization that can adapt to change, innovate effectively, and deliver impactful results.