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Welcome to 2015. Whether you know it or not, it’s the year for CIOs to be in the spotlight. Here’s why.
You just returned from your holiday break, during which you hopefully were able to recharge your batteries with some rest, read some good books and business journals, and spend time with family and friends. As the CIO for your company, you also probably spent some time thinking about what you should accomplish in the coming year. You are well aware of the changes in today’s global marketplace. You and your C-suite colleagues have likely read and listened to business experts espouse the need for companies to engage with customers in new and innovative ways. But what you know better than any of your colleagues is how to leverage information and technology to create new and enhanced customer value. You’ve probably even developed a list of questions that you want to discuss with the rest of the C suite. Those probably include some or all the following:
Do we really know who our customers are?
What are the points along the enterprise value chain where customer value is or could be created?
How will we engage customers in a digital dialogue to understand market trends?
Does the company understand the power of social media?
What is our mobile strategy to create new value for customers?
How can we integrate our strategic partners into our value chain to provide new services to our customers?
How can we improve our internal processes by leveraging technology?
If you are a strategic CIO, you probably have already engaged your colleagues in a dialogue to develop a corporate strategy to address these questions. The challenge of course is that, as a CIO, you are not a one-man band. You have an organization of IT personnel that needs to engage as part of business teams to co-develop solutions that achieve successful business outcomes. Ask yourself the following question: Do the people in my IT organization have the strategic business skills to collaborate effectively in business teams?
I’ve worked with and spoken to many CIOs who realize that their IT personnel need to develop business skills if they are to succeed as part of business teams. I’ve captured their insights in a Strategic IT Competency and Skills Framework that identifies the four strategic competencies and associated skills. Read on to find out what they are, the associated best practices, and a process to measure the maturity of your IT organization’s strategic competencies and skills.
Business Knowledge Competency
Your IT personnel must have a good working knowledge of the business. Harry Lukens, senior vice president and CIO of Lehigh Valley Health Network, runs an extensive business-orientation series of workshops for every IT employee to help them understand the business components of the Lehigh Valley Health Network. The underlying skills associated with the business knowledge competency are an understanding of the business environment, the opportunities to create customer value, and the business processes across the enterprise value chain.
Environmental Skills. Do your IT personnel know the company business strategy? Can they explain it? Do they understand how the IT strategy aligns to the company strategy? Understanding the business is a must if IT teams are to effectively collaborate in business teams and align IT services to the needs of the customer. (Best Practice: Understanding of and ability to articulate the enterprise business strategy, objectives, culture and internal environment.)
Opportunities Skills. Do your IT personnel understand the concept of customer value? Do they know the associated opportunities where customer value is created as part of the company products and services? Do they understand the challenges where opportunities could exist but the company has yet to develop the associated products and services? Understanding the associated opportunities where customer value is created is a must for every IT person who interacts with the business. (Best Practice: Understanding of the enterprise business opportunities that enhance customer value, revenue profitability, as well as the challenges that impact enterprise growth.)
Process-Centric Skills. Do your IT personnel understand the business processes that support the products and services created for customers? Do they understand the complexities associated with the company’s enterprise value chain? Do they realize that customers, distribution partners, suppliers and strategic alliance partners are part of a complex set of processes that support the enterprise value chain?
I’m sure your company business model is more complex today than it was five or 10 years ago. Your IT personnel need to understand the processes and underlying technologies that provide the business the foundation by which it provides products and services to its customers. (Best Practice: Understanding of how IT services and underlying technologies align and enable enterprise business processes that create and support customer value.)
Market Knowledge Competency
Your IT personnel need to have a keen understanding of the market and competitive environment in which your company operates so they can identify where customer value is created across the business value chain. Deborah Martucci, former CIO of Synopsys, a leader in electronic design automation, hired MBA students from Kellogg and Wharton to mentor her staff in understanding the Synopsys market environment. The underlying skills associated with this competency are product knowledge, industry insight and competitive landscape.
Product Knowledge Skills. As your IT personnel collaborate in business teams, they need to understand the customer value proposition for each of the company’s products and services. Do your IT personnel understand the concept of value points? Do they understand how value points represent opportunity areas for business and IT teams to work together and identify new opportunities to create and enhance new products and services? Product knowledge is an integral skill to actively develop as part of a business team identifying new opportunities to create customer value. (Best Practice: Knowledge of how customer value is derived from enterprise products and services.)
Industry Knowledge Skills. IT personnel need to understand the industry landscape and the associated industry trends. Do your IT personnel know the industry your company competes in? Do they understand the trends that could change the shape of the industry and create competitive advantage? Do they know how industry trends align to the products and services of your company? Having knowledge of industry trends and how they align or could influence your company’s products and services is a skill your IT organization needs to improve. (Best Practice: Understanding of the industry landscape, upcoming trends, and their alignment to enterprise products and services.)
Competitive Landscape Skills. Every business is looking for the next new product or service idea. Does your IT organization understand your company’s competitive environment? Do they know who your competitors are? Do they understand the strengths and weaknesses of each competitor relative to its products and services, as well as your company’s products and services? Knowledge of the competitors will enable IT personnel to better understand and evaluate how you can leverage IT to produce competitive advantage. (Best Practice: Insight into competitive environment and the associated customer value gaps and opportunities to create new or enhanced products and services.)
Technology Prowess Knowledge
Your IT personnel need to understand how you can use technology as a strategic enabler to create competitive advantage. IT skills are important and should not be overlooked as a necessary skill set. However, technology is only an enabler of business success if it provides value to the business. Ravi Naik, senior vice president and CIO at SanDisk, an industry leader in flash memory cards, partners with the product development group to use his IT organization as a test bed for new products and services. Doing so accomplishes two goals. The first is to test product ideas prior to release to customer beta sites. The second is to help his IT personnel understand the business value technology provides to its customers. The three underlying skills of this competency are technology strategy/adaptability, organization agility, and strategic project capability.
Technology Strategy and AdaptabilitySkills. Your IT personnel need to understand why an effective technology strategy enables the company to develop and enhance new products and services. Do your IT personnel understand the IT strategy? Do they know how it will enable new products and services for the company? Do they realize why technology needs to be adaptable to new and emerging technologies? If they don’t know the answers to these questions, your IT personnel will never be able to utilize their technology skills to develop new and enhanced products and services that will create competitive advantage for the company. (Best Practice: IT organization incorporates a technology strategy that integrates emerging and existing technologies into new or enhanced customer value and revenue streams.)
Organization Agility Skills. Your IT personnel need to respond rapidly to business needs. They can do so only if they can quickly form teams to partner with the business to respond to new business opportunities. Do your IT personnel understand that IT needs to rapidly respond to changing business conditions? Do they realize that they need to have a set of complementary business skills so they can be part of different IT teams supporting specific business needs? Do they realize that a complementary set of skills provides the IT organization added value in supporting business opportunities? In today’s competitive marketplace, speed is mandatory so the ability for IT to have personnel with multiple business technical skills is a must. (Best Practice: Combined IT and business teams rapidly respond to changing business needs utilizing enabling technologies to develop and enhance customer products and services, as well as supporting business processes.)
Strategic Project Capability Skills. Business units are increasing the number of project requests dramatically as C-suite executives embark on a customer-centric digital strategy. Do your IT personnel understand the dynamics of the marketplace and the factors that are driving the increase in project requests to the IT organization? Do they have the skills to manage multiple projects? Do they have the project governance skills to reduce project risk? Can your IT organization improve throughput and optimize project costs? Improving project throughput enables the IT organization to improve its response times to rising business demand of IT services. (Best Practice: Improve project governance processes and project management skills to increase project throughput of IT projects.)
An important component of strategic IT competencies and skills is the ability for you, the CIO, to develop an IT strategic vision, provide the leadership to harness the energies of your IT personnel, and effectively communicate the business and IT strategies to your organization.
Steve O’Connor is vice president and CIO at CSAA, an insurer that provides automobile, homeowners and other personal lines of insurance to AAA members through partnerships with AAA clubs. O’Connor developed an IT strategy that aligns to the corporate strategy and clearly provides the vision, leadership and communication to the business and IT personnel.Do your IT personnel understand how the IT strategy aligns to the corporate business strategy? Do they view you as a leader that helps guide them to success? Are you providing the necessary communications to your IT personnel so they feel informed and valued? A great leader possesses the necessary cross-dimensional skills that enable IT organizations to achieve dramatic results that create measurable business value. (Best Practice: Create an IT vision or strategy that aligns with corporate strategy and business objectives. Provide the leadership necessary to harness the energies of IT personnel to focus to create business value. Effectively communicate with IT personnel so they are informed and feel part of a successful organization.)
How to Measure Maturity of Your IT Organization’s Strategic Skills
The maturity of your IT organization’s strategic skills is dependent on two variables. The first is skill knowledge, and the second is how effectively you apply this knowledge to create business value. A good analogy is a doctor who just graduated from medical school. He or she is probably very book smart but not necessarily street smart. What I mean by this is that medical school graduates have very high scores on knowledge but have not yet gained the experience where they consistently apply their skills to create successful medical outcomes for patients. You can assess the maturity of your IT organization’s strategic skills using the following two-dimensional matrix.
1) For each of the competency skills identified above compare your organization’s skill knowledge on a scale of one to five, with five representing the best practice. Do the same comparison but measure your organization’s maturity against applying skills for business outcomes using the same one-to-five scoring technique.
2) Plot the results on the two-dimensional grid to see which strategic competency skills need improvement in skill knowledge or applying skills for business outcomes.
3) Have business unit managers who interact with IT on a regular basis perform the same assessment for your IT organization.
4) There are other variations to this process. Individual business units can perform the assessment of your IT organization. Individual IT departments can assess themselves. Regardless of the process you use, the objective is to identify the knowledge gaps, as well as the gaps in applying the knowledge for each of the strategic competency skills.
5) Analyze the results and develop an improvement plan to close the gaps in skill knowledge and applying skill knowledge to achieve successful business outcomes.
As a CIO, you need to be proactive and improve the strategic maturity of your IT organization’s competency skills. Doing so will not only help elevate your stature as a strategic executive, but also help your company rise to the challenges of the digital revolution that is upon us. If you do so, you’ll have a great 2015.