The Role of the CIO in Digital and Social Business Transformation
Research continues to show that one of the single most important activities that senior leaders can engage in — to drive real change and realize results with digital and social business — is to lead from the front. Of course, this shouldn’t come as a surprise to most business leaders. Yet we find it still needs to be emphasized, despite the growing shift away from hierarchies and towards communities to get work done in new and better ways. In fact, the value of executive leadership for digital/social has been confirmed again just recently by the Community Roundtable’s excellent 2014 report (slide 15).
However, the vital resource that also remains most scarce in the C-Suite is one that we’re all the most short of: time. The question then, is how can CIOs make the very most of their fundamentally limited leadership assets to drive broad technology transformation?
Most of us are now aware that organizations are facing one of the largest upheavals in business history, largely due to the transformational changes that high technology is having in virtually all aspects of our lives today. This has resulted in most business leaders being overwhelmed and unable to tackle the massive scale of the work at hand, despite an acute need to digitally transform existing and new products and services steadily over the next half decade to align with the market and stop falling further behind.
The theme we’re seeing in many businesses we work with is a focus on getting better organized — and maybe even catching up — in a year 2020 time frame or so. IT departments, HR teams, corporate strategists, and others are trying to assemble highly transformational roadmaps that will take the large organizations to a better place. Yet lack of leadership, low confidence in direction, and fear of failure is still holding too many companies back.
Despite this, it’s clear that an imperative to change is being widely felt in the corporate world. Many organizations are using whatever convenient temporal signpost they can muster to map out a plan for fundamental digital change in order to remain competitive, sustain the organization, modernize, and grow. The goal: Taking their legacy organizations and updating them right down to the core if necessary to revamp corporate structure and business processes and then remake them around a constellation of fast emerging technologies and new digital business models.
Doing so successfully, however, requires overcoming a number of very significant hurdles: Not invented here, the innovator’s dilemma, the challenge of changing a large organization rapidly without “blowing it up”, all while arranging a large-scale enterprise-wide switch in organizational competencies, and so on.
Part of the secret to successful digital transformation seems to be the emphasis and meaningful adoption of new organizational models. Whenever we look at companies that have been relatively successful in such transformations, they’ve built vibrant ecosystems around new network-centric models. As my friend and industry colleague Lee Bryant recently noted:
[We should start] with the realisation that hierarchy is just one of several dimensions of organisational design – others being communities, networks and small autonomous teams, for example – we can begin to see how some of the characteristics of new models such as Holacracy, Organising for Complexity, The Connected Company or Kotter’s Dual Organisation can be introduced without throwing away those aspects of the line organisation that are currently working well. The goal in doing this is to achieve the kind of Twenty-First Century company attributes that are necessary for real digital transformation to work.
So if we take these two issues as at or near the top of the list of what’s required to digitally transform: Leadership and new organizational models, what then does this mean for the putative top digital leader in most corporations today, the CIO? As I’ve observed before, there’s now a lot of internal jockeying for top-level technology leadership in the enterprise: The CFO wants to outsource to the cloud, the CMO wants to own market-facing engagement technology, and the new Chief Digital Officer is busy trying to take existing assets and build new digital businesses with P&L responsibility.
To further complicate matters, as technology adoption becomes more decentralized there are the heads of lines of business, many of which are attempting to control their own technology destiny locally, closer to where business actually gets done on the ground. This is a lot of competition. Yet the CIO remains better positioned than any single other entity in the organization: They have the largest budget, staff, and existing responsibility for digitally enabling the business.
The digital diaspora: A CIO/CDO challenge
So if the CIO previously had a mandate to digitize the old business, does the new CIO mandate mean that they should be the person most principally responsible to realize digital transformation? When I talk with top CIOs these days, there is a clear sense that IT is separating into two components: Infrastructure management and digital evolution. The former has always been the purview of the CIO, but the CDO is increasingly making a play for the latter.
What role then should CIO’s play in digital/social business transformation? Should CIOs step aside whenever it’s wise and there is a more motivated and skilled actor in the C-Suite? Or should CIOs take the leadership position in the transformation process? I explored this in detail recently in a keynote at CIO Perspectives in Virginia. While I think CIOs often have too much on their plate today, given their many responsibilities, this is the one area where they are 1) better positioned than anyone else in the organization and 2) afforded a once-in-a-career ownership opportunity to map out the very future and even enable the outright survival of the organization.
As we analyze companies making the transition, a few key behaviors come up again and again. These then seem to make the difference between organizations that can jump from the 20th century industrial model to a more pure-play digital model, at least in most industries:
- Open leadership, especially via role modeling. It is very difficult to get C-Suite leaders directly involved in digital/social efforts, but if it’s done, it can drive change faster and more effectively than just about any other method. Charlene Li’s work on open leadership is good material to apply here.
- Focus on culture shifting. The patterns of successful digital/social adoption are increasingly well-understood, but it helps to understand the current corporate culture, and then plan to change it in incremental steps. Successful efforts focus on adding the new organizational models into the business, and using their presence as an operational function to introduce and metabolize change at scale. These can be digital communities of practice or more traditional change initiatives using open leadership methods.
- Organizational redesign for digital/social. This includes both processes and structure within the organization, and is part of an overall model for systemic and sustainable, renewable technology change built inherently into the business and its connected ecosystems. The CIO has control over the IT aspects, while having to work through a CEO (or similarly empowered leader) to have a mandate to change the rest of the organization. This can be a tall order and is fraught with political and bureaucratic obstacles, but is essential for anything more than short-term success.
- Embracing and enabling change at the edge of the organization. And not constraining. IT can no longer be a constraining agent. Instead, the CIO must tap into the fuller resources in the entire organization to drive transformation. This means putting as many other parts of the organization in charge of local change, and is part of the fuller digital change toolkit to reach any kind of year 2020 roadmap.
Today’s CIO is living in an age of unprecedented change, but that also means there’s tremendous opportunity as well Unfortunately, IT leaders are sometimes unwilling to be as revolutionary as required by the times. Given the growing distance between where the technology world operates today and how legacy enterprises work, this is an increasingly untenable position. Fortunately, the solution seems to be spending precious time and resources in the activities most likely to create successful transition, namely the points given above.
Dion Hinchcliffe is a well-known business strategist, enterprise architect, book author, frequent keynote speaker, analyst, and transformation consultant. Dion works with the leadership teams of Fortune 500 and Global 2000 firms to drive successful change with new digital methods involving enterprise social media, digital business models, Internet ecosystems, workforce collaboration, and the future of work in general.All stories by: Dion Hinchcliffe