Fusion Teams:
A New Model for
Digital Delivery

Fusion Teams: A New Model for Digital Delivery
Peer & Practitioner Research Refreshed 4 February 2021, Published 2 August 2019 - ID

G00710746 - 26 min read
FOUNDATIONAL

This research is reviewed periodically for accuracy.

CIO Research Team
Initiatives: CIO Leadership of Strategy, Governance and Operating Models; CIO Role
Evolution; CIO Leadership, Culture and People

Multidisciplinary digital business teams — or “fusion teams” — arecritical to success in digital transformation. Progressive CIOs
foster rather than ﬁght the rise of the distributed digital delivery
model and maximize value by focusing on the human aspects ofmanaging digital business risk.
Additional Perspectives■

Summary Translation: Fusion Teams: A New Model for Digital Delivery(28 September2020)

Overview
Companies that succeed in digital business are rethinking the way they operate. Our datashows that at least 84% of companies and 59% of government entities have set up“fusion teams” — multidisciplinary teams that blend technology and other types ofdomain expertise and are often designed to deliver products rather than projects. 1 We
surveyed almost 1,000 fusion teams from various industries and sectors and found that
43% already report outside corporate IT to be closer to the point of value delivery.
The rise of fusion teams is evidence that the boundaries between IT and the rest of thebusiness are blurring at an accelerated rate. Our interviews with hundreds of CIOs andother IT leaders show that progressive CIOs focus on the human side of managing digitalbusiness risk (the cultural, organizational and behavioral aspects of risk management) tohelp their organizations capture full value from this new digital delivery model.

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Key Findings■

CIOs agree that fusion teams need autonomy to build and launch digital solutions,but many are concerned about the risks of poor data and technology decisions.

■

Seventy percent of fusion team leaders believe their organizations’ existing data andtechnology standards apply only to IT, not to their teams’ work.

■

Stronger governance is only part of the solution, as digital business requires
exploration and discovery that often goes beyond the reach of existing governanceand controls.

■

CIOs should focus on the human side of managing digital business risk and foster“digital judgment” in fusion team leaders. Digital judgment is the set of beliefs,
mindsets and behaviors that lead to sound risk management among frontline
technology decision makers throughout the enterprise.

■

CIOs should help fusion teams avoid creating digital talent silos by centrally
nurturing emerging, evolving and expanding areas of digital expertise and bytransferring digital skills to the broader enterprise.

■

CIOs should use communities of practice to scale the innovative ways of working
pioneered in fusion teams and accelerate enterprise learning.

■

CIOs should work with the rest of the leadership team to rethink the enterprise’s
division of technology responsibilities as fusion teams go mainstream. CIOs should
also focus on modernizing the company’s governance and digital foundations to
support a distributed delivery model.

Distributed Digital Delivery: Introducing Fusion Teams
Traditional, IT-centric “shared services” delivery models are being displaced by fusion
teams that blend technology and other types of domain expertise. Incumbent
organizations are working to emulate digitally native companies’ customer centricity, so
terms such as “agile teams,” “agile enterprise” and “digital product teams” have becomecommonplace. But behind these terms exists a multitude of team-based delivery models(see Figure 1). For example:

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■

Digital product teams deliver and maintain customer-facing digital products andservices.

■

Digital channel teams focus on the customer experience and seek to digitize and/or
integrate marketing, sales, service, mobile and online channels.

■

Digital operations teams capture beneﬁts by further digitizing operations toautomate, cut operational waste or increase process visibility.

■

Data and analytics teams — perhaps the most common type of fusion team —provide insights that are consumed by other fusion teams to fuel data-driven
decision making.

Figure 1: A Spotter’s Guide to Distributed Fusion Teams

Most organizations have multiple digital business or fusion teams, and we found that
96% of them are agile teams (see Figure 2). These teams herald a new form oforganization and value delivery. Instead of organizing work by functions or
responsibilities, fusion teams are typically organized by the cross-cutting businesscapabilities, business outcomes or customer outcomes they support. To do this, they pool
digital talent from different business areas. Team members typically have a shared set ofbusiness objectives and identify primarily with their team and the business or customer
outcomes they support, not the functional area that matches their expertise.
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The rise of fusion teams in many enterprise operating models today testiﬁes thatorganizational boundaries are blurring at an accelerated rate. It also shows businessleaders’ greater appetite for planning, running and managing their own digital initiatives.
Today, 43% of fusion teams in large enterprises (42% in midsize enterprises) are alreadyled by team leaders (not just agile product owners) who report outside corporate IT. These
team leaders go beyond the usual responsibilities of agile product owners; they lead thestrategy, roadmapping and resourcing for the team, and they tend to have end-to-end
accountability for outcomes.
Figure 2: The Distributed Digital Delivery Model

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Our data shows strong variation in how these fusion teams are structured and composed.
However, most are enduring teams that adopt the product management discipline ﬁrst
popularized within IT. This way of organizing teams around business capabilities orbusiness outcomes combines scale with speed and responsiveness. It may also help
attract and retain world-class talent, as it fosters autonomy and line of sight between workand business outcomes that, at many incumbent organizations, has historically eroded.

A Case for Distributed Digital Initiatives
Our corporate strategy research shows that fusion teams’ beneﬁts are signiﬁcant.
Distributed, simultaneous initiatives with broad-based involvement yield better results
than centralized, sequential digital business initiatives. Organizations have adopted arange of tactics that help blunt the biggest risks associated with the distributed delivery
model. And those that do so effectively can be 2.5 times faster in their digital business
transformations than organizations that run initiatives in one centrally managed teamthat is typically divorced from the legacy business.

Challenges of Distributed Delivery
Many CIOs are rightfully concerned that with the rise of fusion teams, the risks ofdecentralized IT (or perhaps even “shadow IT”) will surface again in a different guise.
Indeed, companies that introduce new business models and digital initiatives throughfusion teams face new but familiar challenges:■

Uneven compliance and risk management — In a more diverse, distributed and often
business-led delivery environment, fusion teams may lack the context to effectively
balance team and enterprise outcomes. Many CIOs are rightfully concerned that
fusion team leaders will optimize for their team outcomes, not for other fusion
teams or the broader enterprise’s concerns.

■

Subscale digital talent management — Distributed talent acquisition anddevelopment practices are often subscale. Similarly, fusion teams risk creating new
silos of expertise as companies struggle to capture economies of intellect and sharelessons across domains.

■

Unclear division of leadership responsibilities — While the rise of fusion teams
demonstrates business leaders’ appetite for leading their own digital initiatives, thisambition is unevenly distributed between and within organizations. The new delivery
model requires more business ownership than many business units are willing (orready) to assume and a radically different division of technology leadership
responsibilities.

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CIOs Must Foster Digital Judgment in Distributed Fusion Teams
Most CIOs we spoke with agree that fusion teams need greater levels of autonomy torespond quickly to digital threats and opportunities. Yet many were concerned about therisks poor data and technology decisions may introduce. Governance and oversight, whileessential, are only part of the solution.
Digital business requires discovery that must often go beyond the reach of existing
governance and controls, and introducing more bureaucratic oversight will inevitably slow
fusion teams down. In addition, teams may work to circumvent governance or may noteven be aware that certain standards and processes apply to their work. Our data showsthat 70% of fusion team leaders believe their companies’ data and technology standards
apply only to IT, not to their fusion teams.
To understand the actions CIOs can take to manage risk and compliance in a distributed
delivery model without multiplying layers of bureaucracy, we surveyed almost 1,000
fusion team leaders across geographies, industries, functions and seniority levels. We
found that a speciﬁc set of beliefs and mindsets (not the depth and breadth of acompany’s governance practices) is the strongest predictor of fusion team leaders’ ability
to build and launch digital solutions without introducing additional enterprise risk. We callthis set of beliefs, mindsets and behaviors “digital judgment.”

Key Findings From Our Digital Business Teams Survey
CIOs are known for taking risk management seriously — especially when it concerns data
and technology risks for which, in many cases, they will be held personally accountable.
Yet our research suggests real-world incidents and complaints will continue to emerge if
companies ignore the beliefs and mindsets of leaders and other employees (within andbeyond IT) who make technology decisions in today’s distributed delivery environment.
We looked at fusion team leaders’ ability to deliver their team business outcomes (such as
developing new business models, increasing revenue and attracting new customers)
without increasing the enterprise’s exposure to risks (such as cybersecurity incidents,
privacy concerns and negative customer experiences). In many cases, this is a trade-off inwhich fusion team leaders balance a decision or activity’s beneﬁts for their teams against
the risk it presents to the enterprise.
Following are the key ﬁndings from our analysis.

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Governance Adherence Doesn’t Drive OutcomesWe ﬁrst looked at the extent to which fusion team leaders follow their companies’
standards and processes. (Many IT shops segment stakeholders by their willingness toadhere to the company’s data and technology processes and standards.)
We found that conventional ways of dividing business leaders into “autonomy seekers”
versus “process adherents” does not predict their ability to effectively balance teamoutcomes with enterprise outcomes (see Figure 3). Even fusion team leaders who strikethe right balance (those willing to experiment within the risk-free conﬁnes of well-trodden
paths) are no more likely to protect the enterprise from undue risks while working todeliver their team outcomes.
In other words, no clear pattern emerged when we applied the lens of governanceadherence to the data we collected on almost 1,000 fusion team leaders.
Figure 3: Risk Avoidance Versus Team Outcomes Achievement, by Willingness toComply With Governance

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The Best Fusion Team Leaders Apply Digital Judgment
When we analyzed fusion team leaders who are strong at delivering team outcomes while
avoiding risks, irrespective of their willingness to comply with governance, a clear pattern
emerged. These leaders all combine an entrepreneurial way of working with informed andsound risk taking because of a distinct set of beliefs and mindsets that distinguishes
them from other fusion team leaders — what we call “digital judgment” (see Figure 4).
Figure 4: Digital Judgment Attributes

Applying digital judgment to their teams’ work means these fusion team leaders:■

Challenge constructively. They not only speak truth to power but are also willing towork with governance functions to update standards and ways of working toadvance enterprise learning.

■

Own up to the risks of digital business. They embrace security and risk
management as part of their job, not just IT’s job.

■

Build for growth. They proactively help other teams — present and future — bymanaging the interdependencies between their own and others’ work.

Digital Judgment Matters but Is in Short Supply
Compared to fusion team leaders with low levels of digital judgment, team leaders withhigh digital judgment are 5.1 times more likely to deliver their team outcomes without
exposing the enterprise to additional risks (see Figure 5). Unfortunately, only 22% offusion team leaders have high levels of digital judgment. 2

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Figure 5: Likelihood of Delivering Team Business Outcomes Without Exposing theEnterprise to Additional Risks

Digital Dexterity and Digital Judgment Co-Present
We have written extensively on digital dexterity in the past. This concept differs fromdigital judgment in two fundamental ways:■

Our quantitative model deﬁnes digital dexterity as the ambition and the ability tobuild digital businesses and work digitally. In consequence, business leaders withhigh levels of digital dexterity have greater need of digital judgment. Fortunately,
digital dexterity and digital judgment tend to co-present in the same individual.

■

Digital dexterity manifests itself throughout the workforce, whereas digital judgment
is a distinguishing feature of fusion team leaders who can hit their digital outcomes
without introducing undue risk.

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Actions CIOs Can Take to Foster Digital Judgment
Our quantitative analysis also assessed almost 250 factors across a range of categories(including team composition and reporting lines, workplace features, company culture,understanding and perception of enterprise standards, ease of complying with standards
and perceptions of accountability) to prioritize the actions CIOs and other businessleaders can take to foster digital judgment in fusion team leaders.
This, in addition to our conversations with hundreds of CIOs and IT leaders, revealed thatthe most progressive CIOs take a three-pronged approach to helping their companies
capture full value from a distributed and often business-led delivery model:■

They actively foster digital judgment in fusion team leaders to overcome complianceand risk concerns.

■

They blunt the risks of siloed talent management and expertise development infusion teams.

■

Together with their peers, they rethink the nature of technology leadership in theenterprise.

Through these three prongs, progressive CIOs actively focus on the human side ofmanaging digital business risk.
1. Co-Create Digital Business GovernanceDigital judgment is not inherent. We used regression analysis to help CIOs prioritize theactions they can take to foster digital judgment in fusion team leaders, and we found thatengaging fusion team leaders in the creation of digital business governance has thebiggest impact. Fusion team leaders are 5.4 times more likely to have high digital
judgment when they are involved in creating the policies, standards and guidelines that
direct digital business decisions.3
Our hypothesis is that co-creating digital business governance fosters digital judgment byengaging fusion team leaders in a virtuous cycle of learning. Collaboration withgovernance subject matter experts (SMEs) can help them understand and better articulate
trade-offs and explain the beneﬁts of alternative ways of working. Each time leadersparticipate in these activities, they gain experience in pioneering new ways of working,becoming better at making trade-offs and, ultimately, at exercising digital judgment (seeFigure 6).

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Figure 6: How Engaging in Digital Business Governance Impacts Leaders’ Digital
Judgment

Unfortunately, governance at most organizations still uses top-down approaches that
don’t leave much room for co-creation.
Generally accepted ways of working typically cascade down from governance functions
as guidelines for fusion teams. In most organizations, this starts with company strategy
and regulations, which are incorporated into principles or statements of the organization’svalues and then into policies, standards and controls, and guidelines. Finally, they areincorporated into the artifacts and practices of individual decision makers (see Figure 7).
Smaller organizations may skip one or more of these levels, but the one-directionalcascade remains. Very little information makes its way up.

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Figure 7: Typical Cascade of Standards From the Top Down

While fusion teams are occasionally asked for feedback on policies, standards orprocesses, the mechanisms for soliciting and collating their feedback are often
inconsistent and infrequent, and in many cases, the feedback is rarely acted on. In
addition, periodic governance updates can’t match the speed of digital business. As aresult, over half the fusion team leaders we surveyed felt that governance functions attheir organizations weren’t open to co-creation. And 70% thought existing policies andstandards didn’t apply to digital initiatives.
Digital business requires a radically different approach to governance. Digital businessgovernance should be co-created and apply to the work of all technology decision makers
in the enterprise, not just the ones within IT. Governance functions traditionally optimize
for their own outcomes, whereas a co-created model enables policies and standards totranscend individual functions and business areas. In consequence, digital policies andstandards can focus on customer journeys, not on the individual functions or businessareas that deﬁne them. And instead of rules shaping fusion teams’ practices, co-creating
digital business governance allows new and innovative practices to inform the rules (seeFigure 8).
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Figure 8: Digital Business Governance Versus Traditional Business GovernanceCo-creating digital business governance isn’t just beneﬁcial for fusion team leaders’ digital
judgment. Organizations that co-create governance can also increase the speed to launchand completion speed of their digital initiatives by as much as 70%, and they are 60%
more likely to successfully derive value from their digital business initiatives. 4
CIOs play a key role in helping their organizations pivot from traditional, top-downgovernance to co-created digital business governance. They must work with other seniorleaders, particularly with the heads of governance functions, on four components thatcollectively enable fusion team leaders to co-create governance:
1.

Clarify the company’s digital business ambitions. Sharing a common
understanding of what digital means for the company helps leaders align dispersed
digital initiatives with corporate or business strategies. It should also help fusion
team leaders assess the level of risk the company is willing to accept to achieve its
digital business goals. Only 6% of fusion team leaders agree their organizations
provide clarity about their digital ambitions. Yet those who do are 4.8 times more
likely to have digital judgment than those who don’t.

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2.

Encourage openness in governance functions to co-create and scale the innovative
ways of working pioneered by fusion teams as new enterprise standards. The CIO at
HEINEKEN, for instance, uses design-thinking techniques, such as empathy maps or
customer journey maps, to converse with leaders in the functions that support
fusion teams (such as procurement, ﬁnance and HR) about how ways of working
need to change (see our case study, “Building the Digitally Dexterous Enterprise:
HEINEKEN”). We found that only 17% of organizations have governance functions
that are open to co-creation. Fusion team leaders at those organizations are 4.5
times more likely to have high digital judgment.

3.

Facilitate access to governance SMEs to help fusion teams constructively challenge
restrictive guidelines and standards. Many IT organizations making headway with aproduct-centric delivery model have already started to embed IT governance staff(such as security engineers) in IT product lines. The most progressive organizations
take this one step further and similarly provide easy access to governance SMEs
from outside IT. Only 33% of organizations are set up to do this right, but in thoseorganizations, fusion team leaders are almost ﬁve times more likely to have highdigital judgment.

4.

Connect fusion teams with other teams. Insight into other fusion teams’ ways ofworking also acts as a powerful driver of digital judgment. For instance, the CIO at
ETS, the world’s largest private nonproﬁt educational testing and assessment
organization, created mechanisms for fusion teams to open their sprint reviews toother fusion team leaders and corporate functions. We found that brokering suchconnections among fusion teams can increase the probability those team leaders
have high digital judgment by almost ﬁve times.

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Case in Point: Co-created Governance for Digital Business (Great-West Life)
The CIO at Great-West Life, a ﬁnancial services
organization, realized that digital business work requires amore inclusive form of governance, co-created by fusion
teams and governance SMEs. This new approachaccelerates organizational learning for digital business and drives risk ownership byenabling fusion teams to challenge standards and policies, co-creating new
governance approaches in both existing and uncharted terrains.
Great-West Life takes a two-pronged approach to co-creating governance for digitalbusiness:1.

It carefully selects employees from central functions to embed in fusion
teams, speciﬁcally to enable governance co-creation. For instance, the IT
employees embedded in fusion teams are expected to document and share
new and innovative ways of working that were pioneered in broader enterprisefusion teams.

2.

SMEs from business risk functions (such as legal, compliance and audit) areembedded in the teams to help fusion team leaders constructively challenge
policies and standards. A knowledge broker role connects fusion teams with
SMEs (e.g., ﬁnancial advisors, analysts) and helps them make the case forgovernance changes.

In addition, the CIO and other senior leaders actively encourage fusion teams toconstructively challenge standards and shift from being “standard takers” to“standard shapers.” These expectations have also made their way into the company’s
job descriptions as a speciﬁc set of challenger attributes and behaviors all fusion
team members should display.
To learn more, read our full case study, “Co-created Governance for Digital Business(Great-West Life).”
2. Take a Cross-Silo, Long-Term Approach to Managing Fusion Team Talent
As fusion teams grow in prevalence, so does the demand for technology skills in parts ofthe business outside IT. For instance, using our TalentNeuron database, we found thatdemand for skills related to artiﬁcial intelligence, robotic process automation and data
analytics is now higher outside the IT function than it is within (see Figure 9). Even
programming languages such as Python show signiﬁcant demand outside IT, with non-IT
functions’ requirements growing at twice the rate of IT’s (see Figure 10).
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Figure 9: Technology Skills for Which Demand Outside IT Exceeds Demand Inside IT

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Figure 10: Demand for Python Skills Outside IT Versus Inside IT

Much of this increased demand for digital talent is driven by individual managers or
leaders outside IT who are building their own fusion teams. Unfortunately, this means theteams and the efforts to hire and develop talent for them are distributed. This distributed
approach to digital talent acquisition and development creates three key challenges:■

Missed economies of scale — Lack of insight into common talent needs leads tosubscale hiring and development approaches.

■

Inconsistent skills definitions — Teams optimize for their own talent needs, leading
to inconsistent deﬁnitions for the same skills across the enterprise.

■

Missed economies of intellect — Teams develop their own tools, approaches andexpertise, missing best practices developed in other fusion teams.

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Mitigating subscale digital talent management approaches will require the organization totake a more holistic approach to planning for digital talent. Yet companies cannot expect
HR leaders to do this on their own. Recruiting should continue to deﬁne enterprise-level
talent processes, such as managing the candidate experience and the overall employment
value proposition, but it lacks the domain-speciﬁc knowledge required to attract worldclass digital talent. Similarly, learning and development is best placed to offer guidanceon training and curriculum design, yet it does not have IT’s insight into future digital skills
needs (see Figure 11).
Figure 11: HR’s Strengths and Capability Gaps in Digital Talent Activities

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CIOs should work with HR and other functional leaders to bring precision to the enterprise
digital talent strategy and orchestrate digital talent in distributed fusion teams. IT’s
comparative advantage in this context is to deﬁne speciﬁc digital skills proﬁles anddomain criteria. Similarly, CIOs should provide greater levels of precision for digital talentdevelopment practices. Whereas HR excels at designing generic training modules for thecompany, IT provides insight into digital skills needs throughout the enterprise and greater
speciﬁcity to domain-speciﬁc training.
Leading CIOs blunt the risks of siloed talent management and expertise development infusion teams by playing an active role in developing and executing an enterprisewide
digital workforce strategy. They help their companies capture economies of scale bynurturing digital talent in central groups to then transfer their skills to distributed fusion
teams. They also capture economies of intellect by setting up cross-cutting communities
of practice to curate and share the innovative ways of working and expertise developed in
distributed fusion teams.
Case in Point: Orchestrating Skills Transformation for Digital (AmerisourceBergen)
Inspired by the Spotify model, AmerisourceBergen went
through a major operating model transformation. The
company set up product lines within and outside IT. Each
product line comprises a tribe, which sets the vision and strategy for the product line,
and several squads within each tribe to execute the work. AmerisourceBergen’s CIO
realizes that distributed tribes (or fusion teams) need access to the same quality ofdata and technology talent, regardless of where that talent ultimately reports in theorganization. The CIO therefore tasked the VP of transformation to work with various
stakeholders (including IT domain leads, product portfolio owners, the CIO, the CHRO
and leaders in learning and development) to build a strategic digital workforce plan for
the entire enterprise.
AmerisourceBergen’s tight proﬁt margins and its locations outside traditional talenthubs means it cannot hire its way to success. Instead, it builds and supplies digitalskills internally, using central digital talent incubators that cut across tribes. The talent
incubators nurture and develop skills and transfer them to the tribes, ensuringconsistent deﬁnition and application of those digital skills as and when required. They
are central groups designed to build a speciﬁc data or technology skill set for thewhole company.

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Incubator members rotate into the tribes for targeted deployments and work on
speciﬁc initiatives. During this deployment, they are mandated and motivated to coachand transfer their skills to the tribes. This allows AmerisourceBergen to train
employees in distributed fusion teams without taking them away from their day-to-day
work. This approach also uses AmerisourceBergen’s incubator resources productively
by having them work on real-world initiatives with the teams they support.
To avoid skills diverging or becoming siloed in distributed fusion teams,
AmerisourceBergen recognizes the need to continually realign, refresh and reﬁnedigital ways of working. It establishes role-aligned communities of practice to capture
economies of intellect, enabling practitioners to share information and best practices
across tribe and squad boundaries, continuously improving their digital skills in theprocess.
To learn more, read our full case study, “Orchestrating Skills Transformation for Digital
Product Teams (AmerisourceBergen).”
3. Orchestrate Distributed Technology Leadership for the Digital Enterprise
AmerisourceBergen’s approach of fostering consistent ways of working in distributed
fusion teams (by supporting cross-cutting communities of practice) suggests a signiﬁcant
pivot in corporate IT’s responsibilities. We spoke with almost 100 CIOs and dozens ofother senior executives, including CFOs and heads of marketing, sales, HR, audit andstrategy, to understand how companies are rethinking the nature of technology leadershipin the enterprise. We found that, depending on the digital dexterity of the senior leadership
bench, technology leadership roles will likely be structured on three different models (seeFigure 12):1.

In the ﬁrst leadership model (initiation), the company’s CIO — or a combination of
the CIO and a digital strategist (such as a CDO or chief strategy ofﬁcer) — leads thepeople, process and technology changes required for digital business. Because of
the transformation inertia within the company leadership team, this model requires adigital evangelist CIO to promote a vision for digital business. As more leadersdevelop higher levels of digital dexterity, this initiation model gradually makes way
for the acceleration model.

2.

In the acceleration model, digitally dexterous leaders in either product, channel oroperations groups set up fusion teams to exploit digital opportunities. This model
requires a digital catalyst CIO to help accelerate business leaders’ ideas by moving
IT personnel into fusion teams and modernizing the IT foundations.

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3.

Finally, in a mainstreamed digital leadership model, all leaders become digitalleaders with the technology resources to accomplish their visions. This is when
fusion teams become the mainstream way of structuring digital business work and
CIOs become digital orchestrators. In this context, the CIO’s primary responsibilities
are to coordinate and inﬂuence distributed fusion teams while accelerating
enterprisewide digital delivery.

Figure 12: Three Models of Enterprise Digital Leadership

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Accompanying this shift in the CIO role from digital evangelist to digital orchestrator is theincreasingly strategic importance of the company’s digital foundations. The new digitalfoundations include the company’s digital platforms (such as development environments,
agile tooling and API repositories) as well as modernized shared applications andinfrastructure. Our conversations with CIOs show that as more business leaders develop
digital dexterity and the ability to handle technology responsibilities, CIOs will relinquish
ownership of many, if not most, responsibilities related to general technology
management (such as integrating digital and business strategies and managing company
technology spending). With the rise of fusion teams, other business leaders will also takemore ownership of ideation and delivery responsibilities. In return, the CIO’s focus will
pivot toward building digital foundations.
As we saw throughout this research, these new digital foundations have a distinctly
human component — one that CIOs ignore at their peril. Many IT shops are modernizing
their companies’ digital foundations to provide delivery teams with cross-cutting tools,
development platforms and integration and data capabilities. Yet the foundational
capabilities of digital business include distributed teams’ preparedness to apply digital
judgment and make sound technology decisions in building and launching digitalsolutions themselves. Where relevant, digital foundations also have to work as bridges
that capture economies of intellect from distributed fusion teams and accelerateenterprise learning.
CIOs who reinvent themselves as digital catalysts focus on managing the technology andthe people components of these foundations. Our research suggests that when fusion
teams go mainstream, this responsibility will be at the heart of the CIO role.

Conclusion
The new digital delivery model is a consequence of greater digital ambitions in theenterprise, which is observable in all geographies, industries and company sizes. The
sheer variety of fusion teams set up to enable these ambitions suggests companies arewilling to shift from outdated command-and-control structures to alternative ways ofstructuring digital business work. Yet, regardless of how fusion teams are structured, wholeads them, who is on them or what their speciﬁc objectives are, CIOs play a critical role ininﬂuencing and accelerating this enterprisewide delivery model.

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Recommendations
To help their companies capture full value from a distributed delivery model, CIOs should
focus on managing the cultural and behavioral sides digital business risks:■

Educate the C-suite on fostering digital judgment in fusion team leaders to help
fusion team leaders build and launch digital solutions without introducing undue
risks.

■

Co-create digital business governance to foster digital judgment. Fusion teamleaders are signiﬁcantly more likely to have high digital judgment when they are
involved in creating the policies, standards and guidelines that direct theirtechnology decisions.

■

Prevent fusion teams from creating new siloes of digital talent and expertise by
centrally nurturing emerging, evolving and expanding areas of digital expertise andtransferring digital skills to the broader enterprise.

■

Use communities of practice to capture economies of intellect, and scale the bestpractices pioneered in fusion teams to accelerate enterprise learning.

■Work with the rest of the leadership team to rethink the division of technology
responsibilities in the enterprise and refocus the CIO role on building and rebuilding
the company’s digital foundations.

About This Research
We surveyed almost 1,000 digital business team leaders globally — from all industries,functions and seniority levels — to identify the beliefs and mindsets of fusion teamleaders who effectively deliver team business outcomes without exposing theirorganizations to undue risks. We call this combination of beliefs and mindsets “digital
judgment.” We then tested for almost 250 factors to understand the actions CIOs andother business leaders can take to drive digital judgment. We also spoke with over 100
CIOs and other IT leaders to ﬁnd practical examples of how CIOs foster digital judgmentin fusion teams leaders. A parallel research initiative surveyed another set of almost 100
CIOs and other senior business leaders, including CFOs and heads of HR, sales andmarketing, to anticipate the future of technology leadership as digital fusion teams go
mainstream.

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Recommended by the Authors“Democratize and Distribute Technology Work Across the Entire Enterprise to Accelerate
Digital Business”“Case Study: IT Transformation to Enable the New Digital Workforce (İşbank)”“Case Study: Building Blocks for Product Funding (TD Bank)”“Case Study: Mechanisms to Co-create New Ways of Working for Digital Transformation(Nationwide Building Society)”“Co-Created Governance for Digital Business (Great-West Life)”“Succeed With Digital Business Through Adaptive Governance”“Business-Led IT Spend Reaches a Tipping Point — CIOs Must Lead”

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Endnotes
1

Fusion teams are not conﬁned to large enterprises. At least 66% of midsize enterprises
also have fusion teams.
2

The payoff from digital judgment at midsize enterprises is slightly lower, yet still
signiﬁcant. Midsize enterprise fusion team leaders with high digital judgment are 3.9
times more likely than those with low digital judgment to deliver team outcomes without
exposing the enterprise to additional risks. Only 20% of midsize enterprise fusion teamleaders have high levels of digital judgment.
3

Co-creating digital business governance is also the strongest driver of digital judgment
in midsize enterprises. Midsize enterprise fusion team leaders are 3.1 times more likely tohave high digital judgment when they are involved in creating the policies, standards andguidelines that direct digital business decisions.
42019 Gartner Digital Business Teams Survey.

Gartner, Inc. | G00710746

Page 24 of 25

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Page 25 of 25

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