Creating an organization that excels at digital

Several years ago, I got to hear my friend, Jeanne Ross, speak to an audience of enterprise architects about digital transformation. She said that what got her research started on digital disruption was the conversations that she was having with MIT-CISR organizations. Many were not sure whether they would successfully cross the “digital chasm.”

What’s required to create organizations that excel at digital? This is the question that I posed to CIOs in my weekly #CIOChat group. Hopefully, their insights help you think about how to drive your organization’s digital future.

What steps can CIOs take to enable IT organizations that excel at delivering digital?

CIOs suggest that it is important to build an IT organization that can enable better/faster digital. CIOs say part of doing this involves ensuring when their IT organization builds it, they (the greater business stakeholders) come. It is critical that IT organizations prepare the overall organization for change. A culture needs to be cultivated that embraces innovation, flexibility, and lower maintenance solutions.

It is important for CIOs to plug IT into the business at every level and ensure two-way visibility is created for what IT does. CIOs stress that there is one set of value chains. It is important for this reason that CIOs assist their CEOs in framing digital initiatives. CIOs suggest digital really should mean an organization is ‘customer driven’. This is clearly critical in both paths forward in digital transformation that Jeanne Ross has identified.   

In achieving digital transformation, CIOs suggest that IT leaders need to ensure that their board understands not only digital opportunities but also digital risks. With the board’s support, CIOs say IT leaders need to teach their teams how to think, act, and be business people. This includes speaking the language of business versus the language of technology.

The fact is that digital is about business not IT. CIOs claim that digital needs to mean whatever a company wants digital to mean. One CIO said here that it is important not to get hung up with the term digital. It is better to concentrate on transforming the business.

CIOs see the need for inventive architects

CIOs say that part of doing digital well involves hiring inventive architects to lay out the right foundation for digital. If you aren’t doing data hygiene today, you need to start now. Platform integration, intelligence, and learning models all require your data be ready to use. 

One CIO, at this point, said they have worked with business organizations in decidedly low-tech industries. Many of these company CEOs frame their initiatives without referencing digital. It’s up to the CIO to help shape thinking around “digitally augmented products.” Clearly, you should not assume that adding technology or tools will instantly make an organization “digital.” Excelling at digital means your organization must have a high-degree of dexterity and ability. This includes people and processes. CIOs need to build a team that ‘gets it’ – all of it, the why and the how. This, of course, starts with enterprise architecture.

Are there foundational IT projects that enable superior delivery of digital capabilities?

CIOs say it is important to start with a thorough maturity assessment. With this in hand, IT needs to clean out everything that can go away or be consolidated easily, while planning a roadmap of improvement on the key weaker areas and new ones that support the business goals. CIOs say housecleaning is often a logical first step.

CIOs suggest that beyond basic infrastructure, it is important to establish capabilities for a data lake, warehousing, and API development (including integration hubs). All the other things (data validation, workflow automation, and mobility) should be joint projects with business organizations.

Additionally, it is important to look at technical debt. In other words, what can be reduced or what can be removed. Look at your plumbing – do you have good integration capabilities? You are going to need them to be nimble. Anything an organization can do better with your data posture is foundational and a necessity. So is anything that improves data acquisition (getting it from the field), aggregation (storing/manipulating transactions), analytics (making decisions) and agility of IT and business. If access is even slightly impeded, assume digital fails. Also, integration is seen as essential to delivering a seamless branded experience. Digital, data and technology are equal underpinnings.

As we have said, to achieve digital means accelerating the relationship with the business lines.  Is IT perceived as an extension of the line of business? An impediment? An enabler? It matters. What’s the organization’s current culture? Is it open to continuous learning and for that matter change? It is essential that IT organization be improving its business and communication skills as well as technology skills. CIO and key architects need to become sound business understanding people first and technology second.

What steps can CIOs take with the business to enable them to see the opportunity from superior digital capabilities?

CIO need to think and present ideas from a business lens backed by customer needs and opportunities. They need to build strong relationships of trust and respect with the business leaders, so that people will listen and allow IT to influence them. CIOs clearly need to start by making sure the trains run on time and by emphasizing the importance of seeing IT work through the lens of the business

Part of this involves showing how they can use their human resources on hard problems and have better data to use in decision making. The hard part is having them understand this likely comes with process change and job responsibility shifts, which nobody likes.

IT leaders need to help their counterparts understand customer needs and the impact on the bottom line versus doing nothing and the competitors taking your customers. CIO should help their CEO and board explore reframing based on technology options they don’t know/understand. They need to put forth the why digital transformation (products/markets/culture/CX). These things clearly need to be CIO-led, but CEO-driven.

Accomplishing this allows IT to become a trusted partner with business leaders, the CEO and organizational influencers. One CIO said here, they have studied the impacts of not fully resourcing projects and slicing people’s time between projects. CIOs need to pay more attention to influencing the prioritization of their peer executives. The delay and waste from under-resourced projects and trying to do too many projects at once vs tough prioritization choices is significant. FMEA-type analysis illuminates this as a root cause of chaos, confusion and delay.

Do CIOs need a digital business strategist to relate the impact of digital strategies to business competitiveness?

I got differing answers to this question. Some CIOs said definitely no! Others said yes.  And others yet suggested this should be the job for another IT function.

CIOs in the yes camp said that this is the area where you need to get expertise on the bench to help guide discussion and strategy. They said being effective digital business benefits from an outside-in perspective. Transformation is seen by them as not just being about doing a better job of what an organization does today. A digital business strategy consultant even if it’s an outside consultant is seen by these CIOs as a good idea. They say there is value in getting innovative outside thinking. A pragmatic digital strategist can be a trusted advisor as to what IT capability, capacity, and characteristics gaps need to be addressed to improve realization of digital strategy and business competitiveness.

The third group of CIOs said that strategy and evangelism roles should be baked into the enterprise architecture function. These CIOs think the CIO, in conjunction, with at least one architect needs to be the digital strategist. CIOs, in this mode of operation, should paint the frame and key components while the architect paints the details. The CIO elements should be what business leader needs to know and care about. These CIOs suggest that some of this function might be handled by a BRM role. 

What measures best show the improvement provided by the delivery of digital capabilities?

CIOs say IT leaders need to use business metrics, not IT metrics. This includes things like Net Promoter Score, EPS, and Sales growth. What matters is where IT can have a significant influence on the top and bottom-lines. CIOs, for this reason, suggest having critical success factors (CSF) with the business that tie directly to strategic business goals.

With this said, CIOs say IT leadership should do an initial maturity assessment that measures IT against CSFs and other key areas. They suggest IT leaders define improvements, then measure again in 3/6/9/12 month increments. As part of this, CIOs say make sure you are improving your business and communication skills at the same time as technology skills. CIO and key architects need to become sound business people first and technology second.

Parting remarks

Creating organizations that excel at digital should be a shared objective for CIOs and CEOs. This clearly requires the right technical foundation. However, doing this right cannot be just about fixing things or turning systems on. It is about organizations that looks at transforming for more than digitizing existing business processes. Digital isn’t always easy but the organizations that succeed will survive the next wave of digital disruption. Those that don’t will have “Kodak Moment.”