When it comes to setting business strategy, three out of four C-suite executives want their CIO to play an active advisory role. That’s just one of the key findings of a just-completed from Forbes Insights and Dell.
And in fact, companies with anything less than an engaged and strategy-focused CIO, maintains Steve Forbes, editor-in-chief at Forbes media, are not only likely to underperform but also risk everything from creeping to immediate business disruption. Technology today “is just shredding industries,” said Forbes during a December 11 panel at Dell World in Austin, Texas. Technology and in particular, the Web, he continues, “relentlessly commoditizes – and not just dollars to dimes but to pennies.”
What this points to for technology executives, says Dell Services chief innovation officer Jim Stikeleather, is the need to devote more focus on business strategy. Yes, CIOs still need to deliver 99.9% or better availability alongside total quality within their existing IT backbone. But going forward, the role demands a greater “focus on what creates value for customers.”
From planning to preparation
This is an even more outward orientation than most CIOs of today are familiar with. Traditionally, says Stikeleather, the goal has been “alignment” with the needs of business units. Today, says Stikeleather, CIOs should strive for “synthesis,” implying an even more proactive, strategic and value-conscious approach. Similarly, the CIO should be helping the company achieve greater agility. That, says Stikeleather, is a shift from relatively static “planning” to a more fluid and continuous state of “preparation.”
The precise role of the CIO will depend to some degree on the technology-driven pressures facing any given company. For some, incessant advances in technology are a blessing. Their companies or perhaps industries are embracing change and innovation and reaping the rewards. Here, the role of the CIO is to help stay at the forefront of technology or at the very least, not lose any ground to competitors.
For others, the cumulative impact of technology is thus far somewhat neutral, perhaps adding bytes to certain processes but relatively speaking, doing little to upset the competitive apple cart. Here, by becoming more involved in discussions of customers, markets and business strategy, a more active CIO can likely identify opportunities for disrupting an otherwise staid industry.
Exhibit A: Forbes Media
For still others, technology is the grim reaper of business lines and models. Ask Xerox about copying; ask Polaroid about photography. Or for that matter, Steve Forbes about print and how he and his technology team are addressing the profound changes in publishing.
“The word ‘print’ is now taboo,” says Forbes. Today, the correct term is “content experience”. “Whether we put content on paper versus a web page; whether we link to it on an app, the customer doesn’t care,” says Forbes. “For the customer, it’s an experience around content, however it’s delivered.”
Embracing technology, Forbes is implementing an online revenue generating content management system. Some 1200, fully-vetted contributors will be able to post their submissions to various content “channels” on Forbes.com. From there, a statistics engine will assess the material’s audience relevance and optimize its online rendering – such as its prominence in searches – “almost minute to minute,” says Forbes.
This is journalism driven by the needs and interests of consumers. “Data will tell us what is and is not working,” continues Forbes. As for the writers themselves, “they can see, instantly, how they’re performing and can even get paid right away, through PayPal, based on metrics such as the hits they generate.” This business model has been up and running for more than three years.
Overall, the Forbes example is less a case of a company facing extinction and much more an example of where technology is enabling if not forcing a return to fundamentals. “In the 1830’s, the journalists and editors knew their readers, and the relationship was very personal and interactive,” says Forbes. As the era of mass media emerged, journalism was in many ways allowed to become distant from its audience. Today, says Forbes, “we’re using technology to get back to the basics of our industry, enabling close interaction between the writers and the audience.”
Lessons on the role of the CIO – and CEO
Technology today – e-commerce, big data, mobility, cloud – is creating profound risks as well as opportunities says Stikeleather. Whether or not a company can survive the onslaught is dependent on its ability to identify and respond to the challenges. In some cases, change may be sudden and addressable. Technology may enable a new form of invasive competitor: such as an online retailer. In such cases, given time and focus, others in a given industry can often adapt, survive or even thrive – often out-disrupting (or acquiring) the disruptor.
For others, the change is more fundamental. As the buggy whip met the horseless carriage, as the wired telephone meet mobile, Hollywood’s monopoly on content is being usurped by Netflix, Showtime and YouTube. Meanwhile, the print magazine now competes with the laptop, tablet, e-reader and smartphone. Resistance in such cases is pointless, says Forbes, meaning the way forward is “to think more clearly about your fundamental business – what if you were starting from scratch today” and then “harness technology to create an enabling business model.”
What’s needed, says Steve O’Brien, Chairman and Chief Executive Officer for Reel FX, is a partnership between any company’s top technology executive, usually the CIO or CTO, and the rest of the management team including, if not especially, the CEO. An effective CIO must understand the whole business – and not just how it operates today, but much more importantly, the fundamental mission of the business. And by corollary, any CEO wanting to see their business continuing to prosper, will seek out a strong CIO to help guide the business toward a stronger embrace of technology.
Vacating the comfort zone
Of course, there are challenges. One of the greatest, says panelist Brian Adams, CIO at engineering-focused Worley Parsons, is shifting the IT mindset to a more strategic role. As Adams explains, it’s too easy to get caught up in the business of “service, storage and networks – that’s the job and that’s the comfort zone.”
Today, such a focus is unacceptable. As Reel explains, a good CIO focuses less on the details and more on the larger, strategic picture. This is “high level thinking; not just code.” In addition, says Reel, the CIO must have a personality that “fits in with the (senior management) team.”
Ultimately, any CIO that isn’t shifting to a more strategic outlook “is probably hurting the organization, either overlooking external risks or not capitalizing on opportunities” says Adams, when they should be looking “to use IT as a strategic differentiator.”
Underperformance relative to peers is one thing. But as Forbes warns, the real risks expand to include seeing competitive advantage partially or wholly supplanted by others’ skill with advancing technology. Collaboration between the CIO and the newsroom is helping Forbes Media transform its business model to improve the attractiveness and delivery of its content. The point is, says Forbes, “if you’re not willing to use technology to disrupt your business, someone else will do it for you.”
