CIOs: Are You Leading or Lagging the Rest of the Business?
Today’s IT leaders need to do a lot more than create agile IT organizations. While putting in place an enterprise architecture that can change at the pace of business remains foundational, the question is are IT leaders leading or lagging their enterprise’s next wave of digital transformation. In particular, are IT leaders helping to drive the business innovation that can extend their enterprise’s business differentiation and right to win as derived from their business capabilities system?
McDonald’s Marketing Demonstrates the Power of Business Integration
What got me on to thinking about this question was an article by Gerald C. Kane titled “Is Your Business Ready for a Digital Future?” In this article, Kane says that successful organizations are able to incorporate today’s digital technologies into their business. The challenge is this often requires companies to operate in new ways. Kane gives the example of a recent Super Bowl Game. McDonalds hatched an ambitious marketing plan — to give away items related to every commercial airing during the game. The problem was that McDonald’s managers didn’t know the products that were going to be advertised. Some products were clearly going to be big-ticket items, such as automobiles, while others — like alcohol — would be illegal to give away as part of the contest.
Pulling off this campaign required what McDonalds create a digital newsroom for marketing and legal teams as well as representatives from the company’s advertising agencies. It is also required real-time reactions and monitoring and analysis of social media trends, as well as on-the-spot decision making to produce the best spending decisions about which products to give away to maximize exposure cost-effectively. The campaign succeeded in getting McDonalds 1.2 million retweets, including from high-profile celebrities like Taylor Swift, and even better, the campaign became a globally trending topic on Twitter. According to Lainey Garcia, Manager of Brand Reputation and Public Relations at McDonalds, “the biggest takeaway was the power of integration. You can accomplish amazing things when you have all those pieces working together in a holistic way, and when you’re putting all of your resources together. I really think it’s almost what Ray Kroc, our founder, would always say, ‘None of us is as good as all of us together,’ and I think this really brought this to light.”
Digital Transformation Today is About Transforming Markets
How many of us in IT have had our customers speak with such insight about the power of new business capabilities and data integration. In my opinion, it is time that CIOs and their team to realize that the digital transformation wave is not ending but in fact beginning. One enlightened CIO told me recently that one of his tasks has become getting his business customers to see that the potential for digital technology extends beyond back office and front office business processes. He then asserted interestingly that he has seen a real West Coast/East Coast split here. People on the West Coast get so much more how technology can change their businesses.
Clearly, in contrast to previous technology waves that have been largely about digitizing existing manual business processes, this wave is about creating fundamentally new business capabilities. For a large insurance company that I spoke to recently, they wanted for the first time to get a single view of customer so they could create prescriptive analytics to drive automated offerings to their existing customer base. Let me say the premise again, this wave of digitization is about establish new business capabilities and new means of business differentiation. As such, these capabilities have the potential to disrupt industries and existing market players.
CIOs Have a Choice to be Leaders or Laggards
And CIOs can be leaders or laggards for this change. Given this, one CIO that I have talked to said that CIOs need to be more forward than past facing. Enlightened CIOs see digital transformation representing an opportunity to get closer to the business and add value. Another CIO said to me “CIOs need to understand the business better and be able to partner better with the business. CIOs need to understand the role for IT better and this includes understanding their firm’s business models”. Yet another CIO contends that this wave of change will have the CIO role disappear or morph. They will either become the chief digital officer or the COO. Regardless of what ends up happening long term to the CIO role, I believe that effective CIOs will take the following actions:
1) Deeply understand not only technology trends but how those trends can be applied to solve business problems
2) Understand their firm’s business model and SWOT. And how all competitors are responding to industry change. I recommend looking at Porter’s Five Forces of Competition.
3) Act like a business person. Spend time with other business leaders to strategize breakout responses to the opportunities that new digitization opportunities represent.
Final Remarks
As I have said, we are at the beginning of a new wave of digitization. Effective CIOs will find a way to lead the parade. They will not lag and continue to be effectively order takers. They will realize that their enterprises success depends on them becoming as a former boss of mine said “a business person”. It is time for CIOs to come to the table and lead.