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Destination Boardroom: How CIO’s can lead digital transformation – IEF Orlando 2016 Edition

Innovation Executive Forum | Posted on April 25, 2016 by Tobin Dalrymple

CIO’s know their most important responsibility is helping guide the overall business strategy and digital transformation. But for many of them, holding this type of influence is still a distant dream. For others, they don’t even know where to begin – nor believe it will ever happen.

This topic was the focus during our second Innovation Executive Forum meeting of 2016. Nearly a dozen top level technology leaders gathered in Orlando to discuss their experiences and challenges – all of which pointed back to their changing position in the enterprise, and how to realize it.

IEF members discussed:

  • What causes a company to embrace innovation
  • How to fight push back and gain your strategic role
  • Why digital transformation needs to be invisible

Part 1. The causes of innovation

It’s become almost cliché to say “every business is a technology business now.” But clichés happen for a reason – they’re true.

Understanding the causes of innovation is the first step to fostering it in your business.
Once you can spot the different types of innovation, and the different ways it is brought on, you can actively look for those occasions in your own business to build the business case around a transformative, digital initiative. Doing so will give you ample evidence as you build up your support within the business, a strategic asset.

Let’s take a look at a cross section of the different ways IEF leaders in Orlando are approaching innovation, to understand its various causes.

Demand for new talent

With Disney World in its backyard, it’s no wonder Orlando’s top industry is travel and tourism. But following in close second is the city’s booming tech scene. In fact, Orlando is one of the top technological hotbeds for startups in the United States.

And with this rise in technological popularity comes something IEF members know all too well: demand for talent. As most enterprises in traditional tech centers such as San Francisco can attest, when you’re sharing a zip code with glitzy, venture-backed startups, attracting the future’s best talent is always a difficult matter.

Which is the prime reason one IEF member, the senior director at a mobile software firm, has created an amazing new program for his employees. In it, he gives his team the freedom and resources needed to pursue fun, experimental mobile app projects on the side. And this isn’t just a matter of providing regular lunch and learns and monthly brainstorming sessions to work on the ideas (they do that, too). It’s far more organized: once an idea for an app starts to take shape, the company spins it off into its own separate legal entity, and pays employees in equity for the time they spend on it.

Not only is this providing an innovative environment, one which is likely to help create at least a few new revenue streams for the business at large. But it is also serving a more “selfish” reason, too. The leader said he created the program in part because he knows it’s a great way to hold onto the talented people in his organization, as well as a great attractor of future generations, down
the road.

A compelling event

Innovation doesn’t always happen so gradually. Sometimes it comes all at once.
These “compelling events,” as we often refer to them during our IEF sessions, are major occurrences that happen either in your business, across your industry or even with one of your competitors. And they can cause a business to step into gear with IT transformation, urgently. Just think of the fallout when a major brand suffers a data leak, or when an entire industry is impacted by a new regulation.

One IEF member in Orlando had his own compelling event to share with the group. His company is a 100-year old Florida-based insurance agency and brokerage, working primarily in commercial and business sectors, not consumers. The problem his team is facing is that the majority of the company’s core workforce – its agents and sales people – are about to retire. “They are ageing out,” he said. “And that is a huge threat to our business.”

He explained that when his sales team leaves, the business risks losing its clients to other companies.

To fight this, he’s put in motion a significant workforce transformation project to modernize the way agents and sales people do their jobs. Bringing in a cloud infrastructure, SaaS applications and an Office 365 environment, he hopes to create a toolset that will be able to attract today’s newest, youngest resources. For insurance, one of the slowest industries to innovate, the stakes couldn’t be higher.

“(New employees) are not going to come in, find out they have to sit with pen and paper and fill out a form and stay with the company,” he explained. “They will go to another industry in a heartbeat.”

Cutting costs

While there are seemingly endless reasons for a company to modernize, one IEF member says there is just one cause that trumps everything else: money. If a new initiative at his company is being explored, it is always directly connected to cutting costs, he said.

He works for a major industrial manufacturing business, providing heavy equipment to businesses globally. And while his company certainly approaches projects that improve end-user experience, or are designed to enhance security, the bottom line is always how much money the new tech will save. “Sure, if we can improve experience, or enhance security that’s great – but it’s always about: ‘Does it cut costs?’ That is always the last question I am asked during every conversation with leadership.”

Disruption

“I stay up every night thinking about how my company could get Airbnb’d or Ubered,” said one of the senior leaders at the IEF. It’s a common fear, especially in this era of entire industries disappearing when new technological upstarts create a paradigm shift. And it’s a question that all businesses should be considering.

Similar to the compelling event, disruption can be quick and devastating for a business that isn’t ready to adapt. In fact, the average life span of an S&P 500 company today is just 15 years, almost 50 years shorter shelf life than in the 1960’s. As Jack Welch, the former GE CEO once put it: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

IEF members likened dealing with disruption to that famous scene in the Apollo 13 movie. When it hits you, you’ve got to find a way to make a square peg fit in a round hole. And if you don’t do it soon, your astronauts are going to run out of air.

Part 2. Fighting for IT’s strategic role

In a perfect world, a business will work alongside IT to explore and implement strategic decisions. It doesn’t matter if it’s a new customer-facing offering, an acquisition or a cost cutting measure – in this ideal scenario, businesses appreciate the expertise and foresight IT has, and leverage it to guide their decision making.

We don’t live in a perfect world, however, and as we saw at the IEF, many senior technology leaders are struggling in an organization that has not adopted this new approach of cooperation.

Take for example the IT director at the manufacturing company. He explained that his business frequently makes large-scale strategic decisions without ever consulting IT. “A lot of times IT is the last one at the table,” he said. “Because, it will be something like an acquisition, and they see it as a business decision, not a technology one. IT is something that comes after – which I know is wrong but it’s what happens.”

The consequences of this short-sight are apparent to any CIO. Often, IT’s knowledge can help the business understand the true costs of a new project, and realize the potential impact every decision can make on productivity, on security, and so on. Without IT’s help, new initiatives “can end up costing a lot more money than expected,” he said.

The good news is that there is hope, no matter what your business leadership thinks about IT. The members at the IEF rallied around this topic to provide various tactics that can help grow your credibility in the boardroom and help you achieve a more modern involvement in all business decisions.

Tips for growing your IT clout:

  • Get likeable: One IEF leader said that his top criteria for hiring new staff is that they are “likeable.” This personality trait is essential if IT is to understand the needs of its users, and of the business at large.
  • Get the facts: While business leaders often shy away from abstract ideas like “cloud” and collaboration, they do understand hard facts such as potential cost savings, security vulnerabilities and productivity stats.
  • Get validated by a third party: One IT leader is adamant that, if you can afford it, get an outside company to audit your operations to spot opportunities to improve. Another said he has a well-known CIO mentor, and that he uses his advice when speaking to his company’s leadership. Whatever the source, it is helpful to find someone other than yourself to back up the strategic plans you are hoping to achieve.
  • Involve your community: Outside opinions are great but sometimes the most powerful tool is right under your nose. Another IEF leader creates committees, composed of members from across the business, top to bottom, to solicit feedback and prioritize goals for the year.
  • Get smart: Especially for businesses in highly-regulated industries, knowledge can be a powerful asset. You can grow your stature within the business by proving yourself an expert in topics that both affect the business, and your daily operations, such as how data and privacy regulations affect a cloud strategy in your industry. If you don’t have the answer, they will bank on someone else who does, such as legal, and you’ll be left out, once again, suggested an IEF leader.
  • Stay vigilant: After meeting over 350 IEF members, Softchoice’s facilitator pointed out that, with time, change can happen. “You can say something seven different ways, and the eighth time it just might work, right?” This reminds us of the need for IT leaders to continually push for their seat at the strategy table – eventually, that hard work will pay off.

Part 3. The need for transparent transformation

Keep your iPads away from one IEF CIO. She says they will just get in the way.

She is, after all, the CIO for one the most reputable fine-dining chains in North America and Europe. And there isn’t a chance she’ll be letting the wait staff at these establishments come to their table with anything but a crisp, heavy-paper menu.

That’s not to say her company is against all forms of technology. They are deeply active where it counts, investing heavily in analytics and business intelligence to customize their service, as well as creating innovative online reservation experiences. Just don’t let any of it ruin her customers’ in-person experience. “We pride ourselves on how we take care of our guests,” she said. “As such, we are very careful not to force any technology on them.”

This points to a crucial lesson all CIO’s need to take to heart. There is a time and place for all technology. The way you introduce it to your users and customers needs to make sense – otherwise it can do more damage than good.

In the example above, the technology intervention – e.g. introducing tablet-powered menus – would actually take away from the refined, fine-dining experience the customers had come to expect. Whereas, at a more fast food-style business, such as a McDonald’s, the customer would probably prefer speed over in-person experience. That is what they are paying for. (Which might explain McDonald’s impressive digital experience investments over the last few years, such as self-service kiosks.)

In general, the members at the Orlando IEF all agreed that technology needs to be frictionless, or transparent, if it is to be successful. They also shared a number of insights that can help any business when considering a new technology, whether it be for customers or internal users.

  • Align it to your brand: Restaurants don’t just sell food, they sell an experience. That’s why iPads don’t work for the high-end client above, but they do for fast food. When you are pursuing technology innovation, you need to treat it like an extension of your brand, because it is.
  • It must be useful: “Good technology addresses something, it solves a problem,” said one IEF member. He said the goal of all digital transformation is to improve some component of your business. There are frequent examples in the IEF of businesses investing in fancy frills and modern gizmos “just because.” This is toxic to your reputation and business.
  • Show them the value: One IEF member who previously worked in healthcare said he had a doctor proclaim he would quit if he was forced to work with electronic health records. But, after he was shown just how easy it made his job, and how valuable it was to his patients, he had a change of heart. “It opened his eyes, he became an advocate,” he said.

Final thoughts

One of the IEF members during the Orlando event said something that sounds alien in today’s modern world: “We just won’t go in the cloud. It will never happen.”

As the cloud becomes the most common symbol for a new, more agile, technology-driven business world, this statement couldn’t be more relevant to the bigger theme of IT’s struggles to adopt a new strategic leadership role.

The reason for his company’s hesitation is clear, and difficult to overcome. They are in a highly regulated industry with clients across the globe. Pursuing any kind of cloud initiative is simply an enormous, complex headache. As such, legal has nixed any chance of them going cloud, anytime soon.

But it doesn’t always have to be this way.

Members at the event shared strategies and ideas to overcome this obstacle. They also pointed to a near-future where providers like Microsoft Azure will have an infrastructure that will be able to simply, adequately handle even the most complex compliancy needs. “It’s coming. One day,” a member said.

We can all relate to the example above.

Intuitively, we know that we are living in a world where technological innovation is more important than ever, for every business. Those who do not embrace this truth will fall apart under ever increasingly tough, fast and efficient competition.

So how can you find your way to the strategy table, and ensure you deliver success?

As we saw in the stories above, you have lots of tactics at your disposal.

First, start to understand the causes of innovation. Is your business about to be disrupted, or do you simply need to fill the pipeline for an ageing workforce? Knowing why you are innovating will set the tone for everything you do.

Second, you’ve got to employ every tool in your arsenal to build credibility and trust as part of the business. We shared several approaches to make that happen, such as being likeable and finding outside validation.

Finally, the changes you do implement need to be done with grace. Technology needs to be “transparent.” After all, we aren’t changing the business because the tech is cool, or interesting, or fancy. We are doing it because it will make a real impact.

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