tagged with: business transformation

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Have CIOs Failed?

I have to admit it — I'm baffled. In all the research I've done in the past year, business leaders again and again say they believe the CIO is the right person to lead digital innovation. And yet, again and again, there's a gap between where everyone — CIOs and their business partners included — think the CIO should be and where they actually are. CIOs just can't seem to break out of the technology service provider role.

In the Harvard Business Review Analytic Services study, "Business Transformation and the CIO Role," 94% of respondents said CIOs would add the most value to the business by either leading business technology transformation or, even better, leading IT-driven business innovation and strategy. Only 6% voted for the CIO to focus on running the IT function to support business operations. And yet the vast majority — 70% — said that's exactly where the CIO spends his or her time.

I've also had a number of conversations lately with strategic CIOs who view their role as helping their business leverage information — they frame the digital opportunity in that context. Sure, they need technology to do that, but that's not where the value lies or how they define their role.

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Commercializing IT: the CIO's Role in Driving Revenue

Back in the 1990s and into the early part of the 2000s, we ran an awards program at CIO magazine called the Enterprise Value Awards. This was a unique and truly outstanding awards program that scrutinized the work being done by CIOs and their business partners — and the results being delivered — through the use of information technology. Every nomination had to have a CIO and a business leader as joint sponsors. They had to prove claimed financial value by having the company's CFO sign off on the numbers. Every finalist received a site visit from an experienced reviewer who met in person with company leaders and users of the system to vet the claims being made. These review board members then presented their findings to a blue-ribbon panel of CIOs at a day-long meeting in Boston. The winners were recognized at an annual Enterprise Value Retreat.

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Digital Innovation Drives Business Transformation

One of the most interesting research projects I've worked on in the past year was an HBR Analytics Services study sponsored by Red Hat as part of their Enterprisers Project. In it, we divided the universe based on respondents' posture toward IT-driven business innovation — for simplicity's sake, let's call it digital innovation. There were three categories:

Innovation Accelerators: These respondents said that digital innovation is a consciously pursued strategy throughout the organization — it's in their company's DNA.

Ad Hoc Innovators: These companies have pockets of digital innovation, but it is not pervasive or replicated across the whole company.

Low Prioritizers: At these firms, digital innovation is not a priority; they focus elsewhere.

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CIOs Should Lead Digital Transformation

I've saved the best for last in this series of posts on responsive IT. In our survey of 750 business and technology leaders (around 200 from IT and the remaining 550 from other parts of the business), 42% of respondents believe the CIO is the best suited member of the C-suite to lead digital transformation. (Yes, I know this term has become overused, but this is what we're talking about, so I'll learn to live with the shame.) That's more than twice as many as chose the CEO (18%). And that number shot up to 64% when we singled out the IT respondents. This is great news for CIOs, right?

Yes, but... when we look at the responses of general managers, things are less clearly defined. While CIOs still lead at 30%, there are also strong votes for the CEO (21%), LOB leader (17%), and COO (15%). This makes sense. As digital business becomes more pervasive, it is absolutely incumbent upon non-IT leaders to understand the opportunities and threats digital represents and to do everything in their power to drive their organization's ability to compete. Some of them are becoming quite astute in this regard. It's also true that even if the CIO is responsible on a day-to-day basis to lead this transformation, not much will happen without a clearly articulated vision from the CEO.

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Digital Business Is a Team Sport

IT has become integral to many aspects of business, from marketing and customer engagement to new product design. This requires a new way of organizing and engaging across functions.

How important is this cross-functional engagement? It's huge. Seventy-five percent of the 750 respondents to our global survey (see “The Leadership Edge in Digital Transformation," from HBR Analytic Services) say that their company's survival depends on their ability to effectively exploit IT, and almost all — 90% — said that collaboration and communication between IT and other stakeholders in the business is essential to their ability to do so.

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Digital Innovation and the CIO

Business leaders anticipate dramatic change in all aspects of their operations over the next three years, according to recent research from Harvard Business Review Analytic Services (you can download a copy of the report I authored, Business Transformation and the CIO Role, at the HBR website). Some companies are accelerating this change by committing to IT-enabled business innovation as a core strategy. To understand just how massive the changes will be, consider this: 70 percent of these “innovation accelerators" (about a third of respondents) expect the ways in which they engage with customers to be transformed in three years, rating it eight or higher on a 10-point change scale. That's right: 70 percent. Transformed. Sixty-four percent anticipate that same degree of change in their products and services, their business models and the ways employees work.

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Talking about digital innovation in St. Louis

Here's a Skype interview I did with McGraw Milhaven on KTRS in St. Louis before speaking at the Gateway to Innovation Conference.

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The Influential CIO Workshop: Slides

Influence: the act or power of producing an effect without apparent exertion of force or direct exercise of command. For most CIOs and their teams, this is the only way to get things done.

Here's an excerpt from my Persuasive Communication and Influence workshop.

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Four Keys to Successful Change

Ever try to get someone to change the way they do something that they've been doing the same way for years? Ever try to break one of your own habits? It's not easy. Not because people are intentionally contrary or obstinate, but because big parts of our brains operate on autopilot, in deep grooves of habit, and establishing new pathways is hard.

This can be a serious problem for individuals or managers who find themselves in the midst of major change efforts.

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How to Survive in a World of Constant Change

About five years, ago, when I was still editor in chief at CIO, we began a major transformation from a print-centric media company to online. During that time, every day brought new challenges, frustrations, discoveries, joy and despair. I think many of us thought we'd power our way through all that turmoil and, eventually, things would get back to "normal." After a couple of years, it began to dawn on us that if there was ever to be a new normal, it was well over the horizon, and in fact, we'd better learn to live in a state of change.