Executive Exchange: HBR research – Business transformation and the CIO role

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How do some “accelerated” IT departments succeed and others simply survive? Our Red Hat Summit Executive Exchange attendees know. Abbie Lundberg, president, Lundberg Media and former CIO magazine editor in chief, revised the latest Harvard Business Review Analytic Services survey of 400 business leaders with Executive Exchange attendees.

The study identified three different types of businesses and their posture toward innovation:

  1. Innovation accelerators – Innovation is in company DNA and consciously pursued strategy throughout organization
  2. Ad hoc innovators – Pockets of ad hoc innovation but not pervasive or replicated across whole company
  3. Innovation not a priority – Innovation not a top priority; focus elsewhere

So what do these “accelerators” do to get to better ideas, faster? Lundberg shared a few questions from the survey. But the most telling answer came from this question: Does your IT org have the correct talent? 62% innovation accelerators say yes. 53% of companies that say innovation is a “low priority” say no. Embracing innovation is something business leaders clearly look for in their IT staff.

Question 1:  What areas of your business will be most affected by IT-enabled innovation over the next 3 years?

  • Customer engagement and insights
  • Business models products
  • Services (includes agile development, being iterative, improving time to market)

Accelerator companies know how to commercialize IT

Lundberg says they use IT to make products and services smarter and sell the information around them, much like smart vehicles provide information about our surroundings. These accelerated IT departments offer internally developed capabilities as cloud based service, make analytics capability available for a fee, redefined product value chain as service to others.

Question 2:  What mechanism does your company employ to stay on top of new IT developments? (TIP: Accelerators create emerging tech groups, tech labs, futurist groups)

  • Industry conferences and events
  • Super users in the business bring in new ideas to IT
  • Emerging technology group that is part of IT (Accelerators do this the most — 63%)

Question 3:  What’s the approach you take to IT-enabled business innovations?

Accelerators take a collaborative approach (48%) rather than stealth IT, IT led, or business led. “It’s out of necessity that people are coming together. The only way we’ll compete is if we come together to solve problems,” Lundberg said.

Customers expect IT and marketing to work together

Increasingly, customers expect their experiences with businesses to be high quality (Lundberg calls it the “iPad effect”). And the link between IT and marketing creates these kinds of experiences. IT departments are beginning to understand the value of storytelling, such as video storytelling. Marketing and IT together understand the value of building technology into that video so that someone can interact with it. Lundberg also suggested improving the customer experience by having end-users work with IT interact to create insights.

Back to the survey questions.

Question 4:  Which of the following approaches does your company empty for IT driven business innovation?

  • Cross-functional innovation board – People who are running marketing, IT, and operations.
  • We don’t have 2 years to fix this. Our competitors are Walmart and Amazon – using a social tool so cashiers know more about customers.
  • Bringing down walls and getting everyone working together

Question 5:  How would you characterize your company’s current IT organization?

  • 53% of companies that don’t see IT as an innovator view theirs as a “cost center”
Question 6:  What qualities do accelerators rate highest on a list of attributes:
  • 59% say access to the right technology
  • 52% say knowledge of the business
  • 52% technical skills and expertise

One of the Executive Exchange attendees said he thinks the “dumbing down of IT” has been a large problem over the last several years. Upscaling IT is paramount, he added, and said we need people significantly skilled in deployment and management. It’s increasingly important to have business managers understand IT. Lundberg suggested creating training for IT to hone their skills without requiring them become a manager.

Lundberg asked attendees to write down 1 word that describes the role of IT. Hers was “catalyst.” She said, “It’s not easy to do. Keep it up. Accelerate it if you can. Bring your teams along with you. IT has to be happening beyond your department, across the organization.”

 

Event: Red Hat Executive Exchange
Date: Tue, April 15, 2014