Machiavelli meets Alien - Digital role part of CIO 2.0

Fellow CIO blogger Ian Cox wrote a very revealing piece about the CIO-CMO relationship. For me the critical take-away was that the IT function needs to respond to the needs of the marketing function or stand by and watch a third party fulfil that role.

In fact having third parties involved benefits everyone if the CIO can reinvent the IT function to provide value, as Ian states in respect of advisory, brokerage and integration services.

Ian pointed out that most CMOs do not have their eyes on an IT power grab. However I believe that this outcome may not be one that is decided by the CMO. So CIOs should brace themselves for this possible future.

There are two underlying currents for my prediction. Both of which are largely misunderstood. The first is the emerging theme of CX (Customer Experience). We are entering a phase now whereby many organisations realise that they cannot ride out the recession (read ‘new normal’) by cost-cutting alone. Thus they have turned their attention to top line growth.

This plays neatly into the SMAC (social, mobile, analytics and cloud) themes. A single view of the customer and their likely behaviour delivered via multiple touch points makes a lot of sense. The problem is that many business leaders who today still operate an industrial business model perceive this as a functionally isolated issue for the sales and marketing function; one requiring support from the IT function.  In their minds this is simply a CRM overhaul with some extra functionality.

But CX is not just skin deep. The experience of course extends to back office functions such as accounts but it also extends all the way back to the quarry, field or wherever else represents the source of your supply chain. Combine increased customer fickleness with the ‘Internet of Things’ and all of a sudden your supply chain becomes a demand chain. So this exercise moves from cosmetic to neurosurgery.

And not just down the supply/demand chain. If organisations are to take CX seriously then the business model itself needs restructuring. The old product/service lines of business will need to be uprooted and replaced with customer ‘care about’ lines of business. If we think of traditional musical chairs as a one-dimension game. The associated disruption will not be dissimilar to playing in 3D. This is a somewhat different disruption to the kind promoted by modern day strategists.

The traditional departmental model will similarly be dismantled. Everyone from HR through to procurement will be reassigned to a role that uses their industrial era skills but in a ‘customer condition improving’ manner.

In this new order, it is likely that marketing - in whatever form it takes - will take the lead in this change. It is likely that the sales function will be totally dismantled because it is based on the notion of approach, pitch and sell; whereas in the post industrial world success is achieved by reputation, relationship and fulfilment.

So the CIO’s hopes of being the organisational digital lynchpin may well materialise (if CIOs upskill accordingly) but will still be subservient to the demands of marketing.

So marketing will have greatness thrust upon it and at best the CIO will find a strategically important subservient role in delighting customers.

The other current to examine is that of digital transformation. There is some confusion as to whether the emphasis here is simply to shift the marketing budget away from traditional towards social media or whether something deeper is intended.

Because there is a strong information/analytics element to this new model it is felt by the boardroom that a new senior post is required. Not only is it unclear what this new post will cover, it is unclear on the title – Chief Digital Officer or Chief Data Officer. What boardrooms are generally confident about, rightly or wrongly, is that these are not roles the CIO need apply for.

Admittedly the Chief Data Officer may be more focused on governance than the customer, but there will be a strong emphasis on the market. The CMO is a strong candidate for these new roles so again may again find themselves looking down on the CIO.

I am not going to propose that CIOs dust down their copies of Machiavelli’s The Prince. I have something less political in mind. In my view any organisation that has invested heavily in the inward-looking industrial model and its associated processes and IT systems is beyond repair. No quarterly-focused leader is going to trigger the internal upheaval needed to transform the organisation for long term survival. At best they will implement superficial changes unlikely to upset the status quo. The model will implode as the internal status quo drifts away from that of the market.

I believe most CEOs will act as I have suggested. However smart CIOs will also act as I have suggested and they will create a 2.0 version of their organisation that is built on a core of digital and the customer. This embryo may well grow inside the organisation. At some point baby will eat mummy (Think Alien and Sigourney Weaver).

Thus smart CIOs will align themselves to the 2.0 version of the organisation. And if that isn’t forthcoming, suggest it. And if your suggestion is rebuffed find a start-up that gets this from day one. Smart CMOs will realise this too. So perhaps you can explore these options as a joint exercise promoting yourselves and key members of your respective functions as the digital dream team.

The next step is easy - check your CMO’s calendar for available lunch slots.

Copyright © 2013 IDG Communications, Inc.

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