CIOs long ago shed their perception as order-taking technologists to those with a seat at the executive table, a badge of honor that underscores their arrival as trusted business partners. But to retain this elevated status in an era when businesses are increasingly leaning into digital capabilities, today’s IT leaders must now co-create new products and services for customers.
That may sound daunting for CIOs, many of whom are modernizing IT systems and spearheading digital transformations. But consider that CIOs are best positioned among their C-suite peers to co-create with business partners. Design thinking, agile practices, an increasing emphasis on learning about customers’ needs — IT leaders are uniquely steeped in what drives business strategy.
While many consider this phenomenon IT-business alignment, co-evolution may be a better metaphor. Borrowed from biology, co-evolution encompasses organic synergies among IT and business, as well as with partners and the broader ecosystems at work in a sector, said Joe Peppard, principal research scientist of MIT’s Sloan Center for Information Systems Research, at the MIT Sloan CIO Symposium in Cambridge, Mass., in May.
“In the past, business defined how to solve a problem and looked to IT to solve it,” said Belkis Vasquez-McCall, a partner at McKinsey Digital, at the Symposium. “Now IT executives are co-defining the problem and leading the evolution around defining a solution. We have to come together to participate in the new economy.”
Co-evolution morphs into co-creation, cementing the role of IT leadership as critical, agreed CIOs participating in an array of strategy-oriented panels at the Symposium.
Reaching across the aisle
At Mercer, a Marsh & McLennan subsidiary that provides technology and advisory services for health, wealth and career professionals, IT staffers are empowered to take initiative. For instance, one tech lead alerted Chief Digital Officer Gail Evans to the fact that a certain data connector, properly applied, could save the company $800,000. Evans, who revamped Mercer’s operating model around open source technology, APIs and microservices, has appointed staffers to serve as business relationship managers (BREs) — liaisons between IT and the business.
Mercer, which conducts monthly portfolio reviews and pores over KPIs to refine strategy, also created a “digital playbook.” One fruit of its digital initiatives includes Warren, a virtual assistant that Mercer consultants can query for facts about their clients. Ultimately, Evans said that all of her work is geared toward serving clients, solving stakeholder problems, and driving revenue and profitability.
“We can’t do tech drive-bys,” said Evans, adding that 23,000 employees rely on leadership to grow the company. “We must be a bit ahead of our business partners. The worse place you can be is your business wants to go to digital and you are just starting.”
Evans emphasizes cultivating knowledge about the business objective and learning about client and customer needs from the outside in. While tech expertise is table stakes, co-creators must also be aware of what the competition is doing, quickly assess market opportunities and threats and figure out how to disrupt — or risk being disrupted. A good co-creator defines what it means to win while inspiring colleagues to get ready for change.
“Tech will change often and you have to keep your skill, but I am most proud about how colleagues have embraced changes, asked questions, and behaved differently,” Evans says.
Co-locating to co-create
Dick’s Sporting Goods CTO Paul Gaffney and his business peers co-create solutions that strengthen connections between the retail chain’s store associates and customers. To do this, Gaffney co-locates IT and business leaders for agile development and product management, leveraging design thinking to create services employees and customers will enjoy.
“When they’re all together in the same place, that yields the highest probability of the best results,” Gaffney said. For feedback, Dick’s also got store associates and customers in a room to test new solutions.
Sometimes creating those solutions invites tension between IT and the business, but resolving conflicts is essential for serving the customer. Moreover, “inflicting” poor solutions on associates impacts their ability to make the customer happy, Gaffney said at the MIT event.
“You can’t expect them to deliver happiness if we give them tools they hate,” Gaffney said. “If anything we do is not in service of front-line humans, it prevents us from being future-ready.”
For others embarking on a co-creation journey, Gaffney recommends checking your ego at the door.
“A leadership team is most effective when they are less concerned about being right,” Gaffney said. It’s also critical for IT leaders to be able to change the language they use depending on whom they are talking to. For example, a CIO or CTO might need to alter the way they explain “this is what it could be, or here are the mechanism to do this” depending on whether they are speaking to a CEO, CFO or COO.
And keep programming and learning. Every six months Gaffney devotes a few days to building new software. “If I don’t do it, I would lose touch with exponential change,” Gaffney says.
Co-creation with partner organizations
Co-creation with the business isn’t happening within bubble of an MIT conference. One high-profile co-creation example emerged out of Mastercard earlier this year, when the company partnered with Apple and Goldman Sachs on Apple Card, a digital credit card built into the Apple Wallet on the iPhone, Jorn Lambert, executive vice president of digital solutions, told CIO.com in a May interview. Consumers can register for Apple Card directly on the device without filling out paperwork.
To launch such a service, Mastercard relies on a device, an OS, an application, a browser and several other components whose core competency lies with Apple. Apple meanwhile doesn’t operate a global payments network at scale, which is Mastercard’s bailiwick.
Lambert says the effort, which includes critical API connections between the three partners’ platforms, reflects Mastercard’s willingness to partner with companies to create the best products.
“Co-creation with the right partners to set a new standard or benchmark is crucial,” Lambert says. “We need to make sure to recognize trends, lean into them and make the right choices.
Keeping ahead of the curve
Funneling data to a single source of truth, ostensibly to cultivate better business insights, is another common co-creation initiative.
At Pure Storage, CIO Cathy Southwick is working with her business constituents on a unified data platform. Pure business units historically operated their own IT services, racked up several data siloes in the process. Southwick, who had experiences streamlining processes in her more than 22 years in various IT leadership roles at AT&T, is securing commitments to generate a standard way of looking at data.
Southwick aims to “bring some of [operational] discipline,” which she says will help Pure Storage see what’s coming around the corner and predict business trends, as well as future opportunities for growth. “Co-creation is important,” Southwick says. “Until IT has that relationship with the business, the question of relevancy is always a factor.”
The bottom line
While IT leaders are pursuing initiatives with the best of intentions, they also recognize that bureaucracy has a habit of stifling progress.
Or as George Westerman, senior lecturer at the MIT Sloan School of Management, noted at the Symposium, “As fast as technology changes, IT organizations change much more slowly.”