Three Ways CIOs Can Connect with the C-Suite
There is a marked dissonance between CIOs and the C-suite — a fact that we uncovered in new research conducted with HBR, The Economist, CEB, and TNS Global. We have identified the problem, which is that CEOs believe that the CIO does not understand or help with the CEO's issues and the needs of the business. We have explored the dramatic business changes that have contributed to this dissonance, and described how the enterprise is adapting in order to keep up with the changes. Now, I'd like to address the solution to the problem by providing three simple steps CIOs can take to begin repairing the dissonance between business and IT, and guiding their organizations into the 21st century.
1. Find Your Voice in the C-Suite
To put it simply, CIOs are not engaged in the strategic decision-making that goes on at the executive level. Only 46 percent of CEOs think their CIOs understand the business. To be fair to the CIO, CEOs have created this problem by emphasizing efficiency and cost-cutting over value creation. However, time and time again, statistics show that CIO and C-suite alignment drives financial success. Economic performance for organizations whose CIOs were part of the overall development of strategy outpaced that of other organizations by a scale of two to one as discovered in our Economist and HBR studies. It is clear that CIOs must lead their organization in discovering and then providing balance between efficiency and efficacy.
Increasingly, the CIO and IT must be seen less as merely developing and deploying technology, and more as a source of innovation and transformation that delivers business value, leveraging technology instead of directly delivering it. In the end, the CIO must be responsible if technology enables, facilitates or accelerates competition that the C-suite didn't see coming, or allows the enterprise to miss opportunities because the C-suite did not understand the possibilities technology offered.
CIOs must be an integral and vocal part of conversations on new ventures and resource allocation. The role and effect of technology should be a part of conversations on business decisions, and the CIO should have a pertinent and relevant point of view. To that end, the role of the CIO must be strategic instead of tactical.
2. Define Your Strategy
CIOs need to develop an affirmative IT strategy that begins by identifying old behaviors to give up, new behaviors to adopt, and remaining behaviors to do differently. This means a lot of change for enterprise IT organizations. CIOs will need to free up time and resources currently dedicated to traditional IT responsibilities — delivering transactions, infrastructure, technology and code — to focus more on facilitating and accelerating collaboration, choreography, orchestration, and the provisioning, management, monitoring and securing of services. These are the things that will create more value for the customer and enable the enterprise's agility.
If you are a CIO, the starting point is to begin to standardize what you do. Decide what you should be doing — those things that create value for your customers, give you a differentiating capability, or that you can do better than anyone else — and begin to modernize them in preparation for the evolving capabilities of IT. As for everything else, either quit doing it or find someone else to do it for you.
Begin doing things differently, simplifying to make sure there is one place to get things done. Whether it is virtual or physical, there should only be one version of truth. Begin preparing for the inevitable adoption of cloud technology — virtualize everything you can, and for those things you cannot, figure out why and start making the changes to eliminate those obstacles. Extend the concepts of virtual and cloud to business processes and business models in anticipation of the future digital business ecosystems and the socially enabled enterprise.
Then, decide which tasks need to be done manually vs. automatically. Future value comes from the collaboration and creativity of people in solving problems or realizing opportunities. If the work to be done requires neither of these, then automate it.
Finally, resources and customers should not be constrained by dependence on others to be able to do their work. Organizations operate 7x24x52, work is done across organizational boundaries, and value creation is more a function of the right people, resources and ideas coming together at the right time and in the right place. Consequently, self-service and on-demand should always be a first-order design principle for any IT offering in the future. Get IT out of the way of the immediate, serendipitous opportunities that arise to create value, solve a problem or service a customer.
3. Change the Conversation in the C-Suite
As new business models take shape via technology advances, older ones will wither, and companies' ability to survive will rest on their capacity to adapt or think outside the box. CIOs must lead the charge in getting other executives to understand that the game has changed, and explore strategies and tactics to win it and keep pace with global market changes.
Every time the C-suite decides to start a new venture — whether it's business- or IT-related — a CIO needs to ask three major questions:
- Does it create value for the customer?
- Are we required to do it for legal or regulatory reasons?
- Are we the best in the world at it?
Only if at least one of these questions is answered "yes", should it even be considered for action. If no answer is yes, then find a partner in your ecosystem to do it for you. Or maybe it doesn't really need to be done.
Then, much as the IT strategy was developed, ask the members of the C-suite to identify old behaviors to give up, new behaviors to adopt, and behaviors to do differently. This will also mean dramatic change for the enterprise, but old strategies and processes that were time-consuming and didn't create value need to be automated, outsourced or eliminated to make room for new strategies and processes that encourage collaboration, innovation, and value for the customer. Gary Hamel maintains that the key to future success is management innovation. It has to come before technology innovation, product innovation, operational innovation, and all the other areas where we eventually must innovate. It is the CIO, who knows both the business and the technology, who should best understand what, where and how technology can enable, facilitate and accelerate management innovation and therefore lead the enterprise in its pursuit.
In a time of increasing business and economic change, the role of the CIO and IT is changing in exciting ways. As Seth Godin has said, "Change almost never fails because it's too early. It almost always fails because it's too late." The time to get ready for that change is now.
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