CIOs are constantly being told what they need to do to become their organisation’s digital leaders. Just this week Gartner released the results of its annual CIO survey with a headline telling CIOs to “flip their leadership styles to grasp the digital opportunity.”
With technology being fundamental to the digital business the Gartner report states that CIOs now have a “unique opportunity” to lead their organisation’s digital transformation. But, says Gartner, to do this CIOs must make significant changes to their “information, technology, value and people leadership practices.” The need for a new approach to the CIO role and a new model for IT functions is the key theme of my book, Disrupt IT.
The basic model for IT has barely changed in the last 20-30 years. Most IT departments still operate as an internal service provider with a high proportion of technical resource focused on building, maintaining and supporting solutions. These departments have an inward focus, spending most of their time and resources on running and improving existing systems and business processes. Whilst this will always be an important role for IT, the rest of the business has shifted its focus from using technology to automate, control and improve existing processes to using technology to create new business models, products and services, and to enhance the customer experience.
If the CIO and the IT function are to stay relevant and play a key role in the digital age, they too need to focus on how technology can be applied to create competitive advantage and generate new revenue streams. This needs a new model for the IT function and a different approach from the CIO. It also requires different skills and new ways of working, and a repositioning of the CIO role from a technology leader to a business and technology leader.
As well as describing the new role for the CIO and the IT function, Disrupt IT also provides a framework of seven principles that organisations can use to guide the transformation from the old model for IT to one that can meet the needs of the digital business. In addition to guiding the transformation of the IT function these principles also describe the changes CIOs must make to reposition their own roles, and the new skills and experience they need to acquire to become a digital leader. These principles, and the guidance on how to apply them, provide CIOs with the detail behind the “flip” in Gartner’s headline.
However, what if the wider organisation is not up to speed or engaged with digital? It is difficult to become the leader of digital when the organisation’s board and senior team do not understand digital, or if they just do not see the need to transform. In fact it can be damaging to an executive’s reputation and credibility to push too hard on something if the rest of the leadership team is not ready or willing to listen. Timing is everything in such situations, as is knowing how to build awareness and consensus over time.
This is the reality for many CIOs; a large number of organisations are just not ready for digital. A straw poll at the recent CIO Summit found that only 32% of attendees felt their organisation’s leadership team was equipped for the changes that digital will bring. In a survey of business leaders sponsored by Ricoh Europe 41% of respondents said they do not have an engaged, active senior team concerned and interested about keeping their organisation digitally mature. And a survey by McKinsey found that less than one in three boards are considered to be supportive of their organisation’s digital activity whilst only 14% are actively engaged in digital programmes.
Without doubt CIOs have much to do to ensure they and their department are equipped to play a leading role in the digital transformation of their company but this will have limited benefit if the rest of the organisation does not also change. This is why principle seven of Disrupt IT focuses on the board and also the rest of the business. Boards and senior executives need to become more engaged with technology. The leaders of a digital business have to be comfortable talking about and using technology, they have to promote its use and underline its importance. And they also have to understand digital business models, products and services.
And, if the CIO and the IT function are going to transform into the proactive partner required in the digital age then the rest of the business will also need to change to get the most out of its new style technology leader and team. Boards will need to be clear about what they need and expect from the CIO role, and to communicate this to the CIO and to the rest of the organisation. And the rest of the business will need to adapt to its new IT function as well; the new style IT department can contribute to the design of products and services and help improve the customer experience but only if it is involved at the right time and in the right way.
For any organisation to transform into a successful and sustainable digital business requires significant changes at all levels and across every function. It is not just a challenge for the CIO and the IT function; all areas of the business will need to “flip” to grasp the digital opportunity.
If you are a CIO that wants to create an IT function that can meet the needs of a digital business, or if you need help educating your board or senior team about digital then please contact me or visit my website, axin.co.uk.