The average lifespan of a public corporation recently dropped to only nine years. Change and digital disruption have dramatically transformed the nature of competitive advantage. The rules of business today bear little resemblance to those which Michael Porter shared in his seminal book, “Competitive Advantage: Creating and Sustaining Superior Performance.”
Digital today is not simply about digitizing the things you already do. Paul Leinwand and Mahadeva Matt Mani put it this way in their forthcoming book, “Beyond Digital: How Great Leaders Transform Their Organizations and Shape the Future” “With product lifetimes shortening, organizations are recognizing they can’t sustain a differentiated position by focusing narrowly on products and services.” Digital transformation, therefore, is about creating whole new business models. Businesses that succeed here can reimagine their corporate future and transform their basis of competition.
Engaging Stakeholders in Reimagining Their Corporate Future
CIOs have said repeatedly they cannot single-handedly transform their company’s businesses. Building networks becomes a critical skill. As CIO Deb Gildersleeve stated, “CIOs need to foster a culture of collaboration across the business — a more strategic, always-on partnership.” The foundation of such partnerships start by “listening to and being respectful of others’ expertise. They know what you don’t,” as CIO Carrie Shumaker suggested.
CIOs can take several actions to engage business stakeholders in the transformation discussion, such as:
- Know your business and how it operates.
- Gain trust as early as possible in your tenure.
- Help get a business strategy generated.
- Deliver on all promises made.
- Create meaningful two-way dialogs.
- Be a storyteller, offer transformational success stories.
- Paint a compelling vision of the art-of-the-possible.
- Offer to build pilots and POCs.
- Actively partner.
Analyst Dion Hinchcliffe identified the first item as the most critical one. As he put it, “knowing the business side is essential to talking credibly with the business. Just as important is knowing how the business can be transformed using the latest digital art-of-the-possible. It is the CIOs job to help the business understand this potential.” At the same time, the definition of stakeholders is changing. CIO David Seidl said, “for us, this is really interesting. Our future customers are young and changing quickly. It’s interesting trying to figure out what they’ll want when they show up for college. At the same time, we need to appeal to their parents.”
Related Article: Going Beyond Digital Transformation
Educating Business Leaders on How Technology Enables Business Change
Every CIO identifies this task as a challenge. Gildersleeve said, “CIOs need to be educated in their firm’s businesses to be able to show how technology can enable business change. I’ve always been a proponent of IT partnering with business leaders on driving change and innovation.” Seidl said for this reason, “it’s a matter of helping business leaders understand how to engage, what may exist that could help their specific portfolios, and how technology isn’t a substitute for business process change and improvement.”
According to CIO Martin Davis, “The CIO job is about establishing the art of the possible, in business terms, not technology terms.” CIO Anthony McMahon added, “CIOs should start by guiding the business leaders in understanding what change they need to make, but they should also show-and-tell regarding the potential of technology.” Leading with the technology discussion is clearly not the way to go. As former CIO Tim McBreen said, “I try and keep technology out of the initial education and discuss transformational ideas. I want their buy-in so I start with a discussion on what they think will transform their business. Without question, CIOs should map out business strategy and desired outcomes, show the points of intersection where technology can impact.”
Hinchcliffe stated, “arguably one of the CIO’s main roles is educating the business on the potential of technology, which is fast infusing everything the business does. It’s a never-ending job and the most rewarding, because education is the seed to most change and transformation.”
Related Article: Learning From Digital Transformation Failures
Do CIOs Need Business Leaders With Digital Savvy?
Leinwand and Mani suggest in their book that business leaders need to be “digital savvy.” Where are most business leaders? Gildersleeve said, “I think most business leaders today are ‘digital savvy’, but the big difference is whether IT has a strategic seat at the table when critical business decisions are being made.” CIO Paige Francis agreed, stating, “Too many conflate basic technology knowledge with near expertise.”
CIO Jim Russell added that, “since business leaders are at all points in the spectrum, harnessing a CIO to either compliment or extend the CEO helps.” Seidl shared a similar experience, “I think a lot are more comfortable with digital than they were a few years ago. But I, also, don’t think that this means the thought process and understanding of how and why is there.” McMahon added an international perspective, “There are two tiers in New Zealand. Most, enterprise leaders are digital savvy. SMB leaders, however, are a mixed bag. I see a direct link between curiosity and savvy. The less curious, the less likely they are to see digital as a strategy.” Dion Hinchcliffe concluded by saying, “Most business folks are getting more digitally savvy. The biggest new role I’ve had reach out that never did before is the COO. They are on the front-line with digital now. That said, boards are in the worst shape, with the least technology or digital transformation qualified. Yes, boards need CIO attention, education, and technical direction like never before.”
Struggle Between Tweaking Things and Thinking Differently
Russell Ackoff’s book “Creating the Corporate Future: Plan or be Planned For” argued a systems view is required to adequately plan for increasingly complex futures. Hinchcliffe says, “A great example is Satya Nadella. But the argument is almost always, ‘But Microsoft is a technology company. We aren’t a tech company.’” Hinchcliffe believes the CIO or the chief digital officer should be given a board seat, but fears CIOs aren’t prepared for the challenge. In cases where the board is equally unprepared to evaluate the CIO’s advice and direction is where the problems truly arise.
Getting people to imagine a new reality is a problem Davis said. “Some are good at it, but most are not. It is a strength for many entrepreneurs, but it is not often found in big companies.” Hinchcliffe agreed, saying, “Imagining a new business future from a system perspective is not something most people are good at by nature. IT folks have an edge, because they’ve had to learn to think this way to create successful outcomes.”
Another problem is organizations can have a narrow view of IT. As Francis said, “When technology is only looked at as a cost center, it’s very difficult to succeed at transformation. You can get folks on board with the continuous aspect, but it fades quickly.” Part of the issue according to Gildersleeve is businesses view digital transformation as a monolith when what they really should do is “think about digital transformation on a dual-track. Large-scale, strategic transformation is important and will always be a priority within IT. But organizations also need to put attention on rapid-cycle innovation. Organizations need to create a way as well for business processes to be made more efficient and to drive smaller-scale innovation too. These quick wins will help organizations iterate and adapt to change faster than legacy and traditional technology.”
Building a Successful Change Management Initiative for the Transformation
Transformation impacts people and what they do. So how do you help make people accept change? Shumaker stressed leaders must “build consensus before the transformation starts. Even though not everyone will agree, building consensus builds legitimacy and legitimacy is critical when the going gets tough.” And it all comes down to trust. “Trust is the glue that makes change and transformation work. You need it in plan and communicate,” said Seidl. Davis added, “You only succeed if you energize the lower-level change agents to create emergent change to embed it in the culture.”
For this reason, Francis said, CIOs need to “collaborate and communicate, and to do so persistently. Once there are strong relationships, it’s much easier.” Creating the right culture is key, said Gildersleeve: “Create a culture where employees feel like they are empowered to collaborate and drive innovation coupled with trusted guardrails by IT to ensure innovation and change is safe and doesn’t open the company up to risk.” CIOs need to find those people who identify as “digital change agents,” said Hinchcliffe. Once identified, they need to “empower and unleash them.”
Myles Suer, according to LeadTail, is the No. 1 leading influencer of CIOs. Myles is director of solutions marketing at Alation and he’s also the facilitator for the #CIOChat.