6 signs your business might still be in the dark ages

...and how you can help them emerge.

4 enterprise castle moat
Neil (Creative Commons BY or BY-SA)

The fact that I have to write this blog at all is quite surprising but yes, it is in fact necessary. There are still some companies (and industries) stuck in the dark ages.  But, unlike 100 years ago, or even earlier in this decade when Kodak and Blockbuster were struggling (without success) to survive, there are clear warning signs to watch for ... look for them and escape before you have an extinct company on your CV.

1. Your IT department is viewed as a necessary evil

It’s extraordinary, isn’t it, that in this tech-saturated world that there are still companies out there where the IT department is about as popular as chopped liver. These companies and their employees see IT as that necessary evil they contact when a PC breaks down, password is lost, or to solve some another niggling problem.

In an era where technology has transformed the way we work, shop and live -- and techies are now C-suite regulars and modern-day heroes – the few straggler companies that still don’t get it may want to step into the 21st century and make a few important adjustments.

2. Tech is listed as a corporate function

Is technology listed on corporate presentations as a function along with finance and legal?

With respect to my friends in finance and legal functions whose work is essential to the success of any company, there’s a problem with technology being seen as a function. The reality is that the line between technology and business is blurring rapidly, and, as I have said many times, the term “digital business” is almost redundant. True forward-thinking companies have long ago elevated IT to the same level as strategy or product development – an integrated element of their business model.

3. Tech is NOT included in earnings reports

Imagine if Netflix, Google, or Facebook had an analyst day without mentioning technology. Ok, that may seem farfetched as these companies are fundamentally technology based. But, to my point that all businesses are becoming digital, it’s almost astonishing when IT initiatives, which are all about the quality of future operations and competitiveness, are absent in CEO calls.

Talking too much about technology when you have never mentioned it will of course lead to skepticism, but technology should clearly be a part of your strategy and story.

4. Executives do not have tech objectives

“You manage what you measure” is a common catchphrase. Therefore, company leadership that sees the irrefutable and powerful value of technology will ensure tech goals become annual performance measures for their executives. You could see this as being similar to how adding diversity to annual performance goals has helped some companies change the tide in this area.

One global leader I know has only two unique objectives above and beyond the normal financial and operational measures. Both of them are about enhancing client experience through technology and analytics. They came directly from the CEO. That’s how change starts.

5. Same tactics continue to be used

The definition of insanity is doing the same thing over and over, and expecting different results. Yet, some companies still manage and think about problems today the same way they thought about them a decade ago.

I’m not just talking about moving from waterfall to agile, though techies love to talk about that transition. I’m talking about literally thinking about problems differently. Technology doesn’t simply enable businesses to be more efficient, it has the power and potential to create entirely new business lines. It can disrupt the current model and displace competitors. The problem is that many companies are still looking for ways that technology can enhance an existing model. That’s old thinking!

You can’t continue to do what you’ve always done to stay ahead and be successful,” is how Paul Chapman, CIO of Box, put it in a recent interview with Apptio in their Emerge ezine.

Watch out for people who stick to the narrow word “enablement” when referring to technology. Let's talk about new revenue models and EBITDA enhancement instead.

6. Your CIO is NOT on the senior management team

Many studies have discussed the reporting structure of company CIOs. In the United States, a Deloitte study found, 50% of CIOs report to the CEO while globally this figure is 46%. But there are many companies where the CIO reports to the CFO, COO or and they thrive.

Reporting structure does matter but I would argue that structure alone does not determine whether your business will emerge from the dark ages. A CEO that does not understand or appreciate technology, or one that is too stretched to give it focus, could possible make things worse for a CIO trying to drive digital strategy. A tech savvy and engaged CFO might therefore be a much better reporting structure.

What’s most important is that the CIO is seen as a strategic part of the management team. The CIO can report up to the CFO, COO, or CEO -- studies have shown that it really doesn’t matter. However, regardless of structure, the CIO leader must be in “the room where it happens” or your business will ultimately falter in our digital age, which continues to transform almost everything with mind-blowing speed.

If your technology leader is relegated to the next level and not a part of critical meetings where business strategy, M&A, and revenue growth are discussed, he or she will be trapped in an enabler role. And your business will struggle to keep up.

Is this comprehensive list? Probably not. Are there some successful companies out there that do not adhere to the above guidance? Yep. 

Be well. Lead on.

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