During a Walmart leadership meeting in 2017, CIO Clay Johnson witnessed a seminal moment in IT-business relations. When someone suggested making the technical terms of the retailer’s IT strategy more accessible for business line leaders, Walmart CEO Doug McMillon said something novel.
He said, “Business people need to start speaking the language of technology,” Johnson said recently on a panel at the 2018 Forbes CIO Summit. “Hearing that was a pleasant surprise.”
Most CIOs today would agree. For the past decade, CIO success has been defined by being able to “speak the language of the business,” as it has been incumbent on tech leaders to understand the corporate strategy and empower business leaders with the right technologies to execute on that strategy. CIOs have struggled to explain tech initiatives through the lens of business strategy, rather than discuss the technology itself, as CEOs thus far haven’t had to care nor know what, say, Hadoop is.
Times have changed, and forward-looking executives such as McMillon want their business leaders to understand concepts such as agile and DevOps, which are core to the IT strategy Johnson has facilitated since joining Walmart in 2017. The thinking is: The more fluent your company as a whole is with technology, the less likely it will be disrupted by it.
Digital drives business to learn tech
Flipping the script on the IT-business divide makes sense in this era of digital disruption. Industries have been repeatedly disrupted by Amazon.com, which has infiltrated several traditional retail industries, from clothing to groceries. Fellow digital platform companies such as Uber and Airbnb have shaken ground transportation and hospitality out of its digital doldrums. And while companies may not have impacted every sector, they’ve raised the bar on consumer expectations, thanks to same-day deliveries and self-service solutions via digital and mobile channels.
Airware CEO Yvonne Wassenaar, formerly CIO of New Relic, says that companies that adopt technology creatively are rising to the top. Conversely, leaders who fail to change how they run their businesses are setting themselves up for failure. CEOs must understand the importance of cybersecurity and how machine learning and artificial intelligence technologies can automate business processes, Wassenaar says, or they run the risk of being outflanked by nimble, tech-savvy rivals.
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“It may not feel like things are going to turn, but technology is fundamentally changing the economics and the engagement of how businesses function,” Wassenaar told CIO.com at the Forbes event. “As a business leader you have to be thinking about how to leverage technology to your advantage.”
Forrester Research analyst Ted Schadler is seeing signs everywhere that businesses understand that digital technology is critical for driving efficiencies and boosting customer engagement.
Schadler, who advises enterprises on digital transformation, said one old-line plumbing company recently ran a workshop with about 350 executives who brainstormed on how to use digital, mobile, AI and automation to build new products. Of the group, about three hailed from IT; the rest were sales execs. “I was a little blown away by that,” Schadler says. As it happened, the leaders were strategizing to prepare for an incoming, tech-oriented CEO whom they knew wanted to use tech to get closer to customers.
Sometimes the board dictates business strategy, as it did in the case for one major hotel chain, according to Schadler. Making rooms readily available for purchase online is critical in the digital era, but the chain had long resisted using APIs to sell rooms through an online travel agency. After the board pressed the CEO to make changes, the CEO “found religion” and replaced the CIO with a chief digital officer; the IT staff quickly embraced APIs.
The lesson the plumbing and hotel companies learned: “Technology is a business asset, a chess piece on the board, not a back-office function,” Schadler said. But recognizing when to embrace change is hard for CEOs working in industries that haven’t yet been directly disrupted by digital upstarts. Schadler advises companies to embrace technology mentors from sales or other organizations to teach CEOs and other business leaders “what is possible.”
Facilitating change: Easier said than done
Some enterprises are tapping emerging technologies, as well as agile and DevOps, to get products to market quickly and revise them iteratively and safely. These “connected enterprises” weave front-, middle- and back-office functions to better meet customer expectations, says Steve Bates, a principal in KPMG’s CIO advisory practice. Seventy-five percent of such companies report that the experience they provide customers exceeds expectations, according to KPMG data.
Yet many enterprises still struggle to build a connected enterprise at scale because changing corporate culture is difficult, Bates says. For example, companies may have pockets of their organizations, such as sales or HR, embracing agile, but scaling it across the enterprise is a tougher sell because it requires business leaders to embrace risks.
“Technology isn’t the biggest challenge,” Bates says. “The biggest problem going through digital transformation is that companies can’t shift the culture and drive the new values and principals throughout the enterprise.”
Bates says that culture change has to start from a board that has the courage to facilitate it, funneling on down through the CEO and other business tiers. “I don’t want to understate it: That is really challenging,” Bates says.
Such top-down change is happening at Walmart, where IT and the business are working closely on agile and product management models for IT, according to Johnson. It’s a breath of fresh air in an era when many CIOs have struggled to get broad business buy-in for collaborations.
“Now that it’s CEO-driven, it’s getting a ton of traction,” Johnson said. “But just as it took us time to learn the business, it’s going to take time for the business to learn the technology.”