by Eric Bloom

2 key drivers of IT digital transformation leadership

May 29, 2018
CIODigital TransformationIT Leadership

IT’s path to digital transformation (DX) leadership is driven by IT’s organizational clout and ability to innovate. Does your IT group meet the criteria?

leading digital transformation puppet
Credit: Thinkstock

IT’s role and/or participation in digital transformation (DX) is neither guaranteed nor cast in stone once initially defined. It can be dramatically enhanced or degraded based on changes in senior company leadership, newly popularized technologies, change in IT leadership, a disruptive innovation by a competitor and other related reasons. There are, however, two key factors that, in the long-term, will help determine IT’s role in DX. These key factors are IT’s organizational clout within the organization, and IT’s willingness and ability to innovate.

IT’s organizational clout

IT’s organizational clout refers to how IT is viewed within the organization regarding its competency, importance in driving profitability, the C-Suite’s philosophy of technology and other related factors. The more IT is respected and trusted by their business counterparts, the easier it will be for the CIO and his/her senior team to lead the organization’s DX endeavors. This clout comes from a combination of:

  • IT delivery excellence
  • CIO business savvy
  • CEO/C-Suite engagement

IT delivery excellence

IT delivery excellence is IT’s ability to support its business partners in four key ways.

  • Level 1 – utility provider: Internet access, email, online production systems, batch processing, etc.
  • Level 2 – on-demand servicing: Desktop support, call-in application support, etc.
  • Level 3 – general contractor: Projects of all types either specifically requested by IT’s business partners or driven by IT on its business partner’s behalf
  • Level 4 – thought leader: Providing technical and business insights and advice that go beyond the technology-only realm into business-oriented opportunities and consequences

Level 1 and level 2 are like table stakes in a poker game, if they can not be done correctly, the IT leader/CIO will most likely be replaced due to lack of confidence and the business operational need to have core systems up and running. An IT group in this condition has no organizational clout, business leaders look for cloud-only solutions, and if IT delivery is not improved, it will most likely be outsourced.

If Level 1 and 2 are properly executed, then IT’s business involvement can move to Level 3.  At this level, its partners will be comfortable working with IT on project-related initiatives that enhance internal productivity, expand revenue opportunities, increase client engagement and/or provide other business value. This is IT’s traditional business role, facilitating business achievement the objectives are defined, but not having a seat at the strategic thinking table.

Level 4, IT as a strategic partner, can only be reached if levels 1, 2 and 3 are properly executed in the eyes of its business partners. For example, if IT can’t properly deliver the implementation of a sales CRM system, then the CIO will not have the needed internal respect within the C-suite to have his/her opinion considered when discussing salesperson productivity.

Becoming a Level 4 CIO and IT organization is more than getting a seat at the strategic thinking table, it also requires a metamorphosis within the CIO and other IT leaders from being a “technical doer and implementer” to becoming a “business thinker who provides business value using technology.” This may be hard for some and obvious to others. The hard part for all is not attaining the needed business knowledge or thinking for strategically, it’s getting the CEO and other C-Suite members to believe that the CIO and IT as a whole are business people first and technologists second. This is the true case of where recognition created reality.

It’s only when the CIO and the IT organization as a whole have showed competency at all four levels and is seen as appreciated by its business partners that the CIO and IT in general will have the organizational clout to be a leader in the organization’s digital transformation activities.

CIO business savvy

CIO business savvy is the combination of business acumen, business knowledge, emotional intelligence, management and leadership ability, strategic thinking orientation and the personal interest in stepping beyond the technical realm into the business side of the house.  There are some CIOs who only want to stay in the technical space. That’s OK, there is no right or wrong, just what’s best for your career. That said, if you, as the CIO, don’t take a pro-active business-oriented stance, then the IT organization you lead, and those within it, will not be positioned to lead DX, only to support it or standby and watch it happen without you.

CEO/C-suite engagement

CEO and C-suite engagement is how all others in the C-Suite feel about:

  • The role IT should play in the organization
  • Digitally transforming they business areas on their own, without IT involvement
  • Technology as either a strategic tool/weapon or as a necessary evil to provide email support and process transactions
  • Being a leading or trailing in technology adoption

Even if IT does everything right in regarding the four levels/types of delivery excellence and the CIO business savvy, if CEO and other C-suite members don’t let IT in, the CIO will be like a salmon swimming upstream, DX leadership will not be impossible, it will just be enormously difficult and unlikely.

While organization clout it needed to be a DX leader, it’s not enough. The CIO and IT as a whole must have the ability to strategically innovate.

IT’s innovative nature

Innovation in IT is the successful creation, implementation, enhancement and/or improvement of a technical process, business process, software product, hardware product or cultural factor that reduces costs, enhances productivity, increases company competitiveness, or provides other business value. These types of IT innovation are driven by IT employee willingness and ability to innovate on behalf of the company, and within IT itself. 

Employee willingness to innovate is based a combination of:

  • IT’s internal culture, related to idea generation and support of experimentation
  • IT leadership’s focus in DX and continual product/process improvement
  • Individual creative nature and entrepreneurial spirit
  • Job engagement and interest in helping the company

Employee ability to innovate is based a combination of having:

  • Time to think and be creative
  • Business understanding of company goals and objectives
  • Knowledge of industry trends and the company’s competitive landscape
  • Knowledge of technology trends and innovation inside and outside their industry
  • Understanding of innovation processes, like design thinking

An organization’s innovative nature is driven by its internal culture. In the case of IT, its culture is primarily defined by the CIO and other senior IT executives but is also overshadowed by the CEO and C-suite’s thoughts on the importance and use of technology. Here, let’s concentrate on that part of IT culture controlled by the CIO and his/her team.

The creation on an innovative IT culture is composed of six primary ingredients:

  • Cultural awareness
  • Innovative mindset
  • Management focus
  • Employee communication
  • Self and organizational learning
  • Conflict avoidance and resolution

Cultural awareness

Cultural awareness is the ability to understand internal organization politics, idiosyncrasies, strengths, weaknesses and how to effectively “work the system” to get things done. This awareness must exist at all levels of IT management as well as among the IT technologists that design, build and maintain the company’s computing infrastructure. This awareness can be enhanced via the combination of:

  • Increased transparency between senior IT to those within the organization
  • Emotional intelligence and interpersonal communication training
  • Informal training, such as an “IT Lunch Time Speaker Series” with non-IT people talking about company business objectives and industry trends
  • Project retrospectives on what went well and could be improved in future projects
  • Strong manager/employee communication at all organizational levels

Innovative mindset

Opportunities to innovate comes in many forms. It could be successful creation, implementation, reuse and/or improvement of an existing business process. It could be sales technique, or a cultural factor that reduces costs, which enhances productivity, increases company competitiveness, or provides other business value.

Finding these innovative solutions requires a willingness to look at your existing processes with a critical eye, even if you, or your team, were the one who originally build them.

There are ten questions you can ask yourself that may help you drive innovation within your organization:

  1. How are other industries using technologies that our company currently owns?
  2. What technologies are my competitors using that are giving them an edge against our company?
  3. How can we combine two or more of the technologies our company already owns to solve business problems in creative ways?
  4. What open source software can be inexpensively and securely added to our list of tools that help drive internal innovation?
  5. If budget was not an issue, what could we do to improve/enhance my technical environment and reduce technical debt? How can I do it less expensively?
  6. Are there any business processes that could/should be done more efficiently? If so, how?
  7. What technologies are we currently using that should be phased out to make budget dollars available for new innovative initiatives?
  8. What can we do to help foster an innovative IT and company culture?
  9. What measurements can we use to quantify the return on investment of our innovative ideas?
  10. If I knew we would not fail, what innovation would we implement? Then, is there a way we can minimize the risk of failure on these projects?

Management focus

All organizational initiatives must have management support. If not, then they will either not get funded or will wither and die on the vine. If it’s an internal IT innovation and you are the project’s executive champion, then great.

If, however, a non-IT sponsor is required, then it would be worthwhile to ask yourself the following questions:

  1. If implemented, can this idea actually produce the productivity gains being proposed?
  2. Is the idea consistent with IT and the organization’s culture?
  3. Does the company have the financial resources to fund this type of innovation?
  4. Is the innovation consistent with the company’s future direction, goals and objectives?
  5. Was the idea presented in the best possible light?
  6. Is it an idea that could/should be proposed again at a later date when the company has more time, money and/or other resources to give it the priority it deserves?

Employee communication

Virtually all innovation and productivity enhancements create change that must be communicated to those affected by it. Keep in mind that you should:

  • Be consistent over time in your messaging
  • Be aware that varying audiences have different needs and worries
  • Explain rationale in a way that listeners can best relate to the issue
  • Persuade people using more if a human dimension than only statistical facts
  • Remember that your genuine passion and enthusiasm can activate similar feelings in your listeners

Self and organizational learning

Organizational learning is facilitated through a combination of formalized education and business experience, both of which are driven (or suppressed) by the organization’s culture.

Different employees need different types of training in order to grow. Technologists, it particular, generally need a combination of learning new technologies to stay marketable and non-technical skills, such as interpersonal communication, influence, negotiation, emotional intelligence and others to properly articulate their innovative ideas as well as advance their careers.

Also, professional curiosity in both individuals and the IT organization as a whole cause people to be both introspective and more aware of their external environment. Introspection causes people to ask the question: “How can I improve?” External awareness causes people to ask “What can I learn from my surroundings that can help us successfully move forward?” Both of these questions lead to innovative thought and drive creativity, innovation and enhanced productivity.

Conflict prevention and resolution

Innovation drives change and change drives conflict. The ability to minimize this conflict helps facilitate change, which in turn, drives productivity. Your personal and organizational ability to deal effectively with conflict can make or break your ability to enhance organizational creativity and innovation.

Certainly, conflict resolution could easily be a full topic on its own. I’ll simply say here that if you identify the reasons causing the conflict, then it will make it easier for you to solve and move your project forward. Also, a good thing to remember is if your initiative is being slowed or stopped by someone, remember that 99 percent of the time people are not against you, they are for themselves. If you can understand the reason behind their objections, you can often turn detractors into allies.