7 Things for CIOs in the Digital Economy (Part 1) | Straighttalk

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We convened a “virtual focus group” of IT leaders to find out what kind of moves CIOs are making – what steps CIOs should be taking – in order to succeed in today’s brave new digital world. Here are two of the group's list of seven must-do's for their CIO peers.

By Straight Talk Editors

What’s a CIO to do?

A growing chorus is telling IT leaders that they are on the verge of extinction. They stand in the way of progress, fail to understand the needs of the business, and fall hopelessly behind in meeting the challenges of new and exciting digital business opportunities.

To prevent their role from becoming irrelevant and the IT function from disappearing, CIOs are told they should “seize the initiative” and “change the conversation”; they are admonished to “collaborate” and “stay relevant.” Mostly, they are urged to “innovate” and keep the IT infrastructure humming — to lead and be creative while at the same time managing cost efficiently and controlling unobtrusively the information technology framework that supports the ever-changing needs of the enterprise.

All good suggestions. And certainly all senior executives should have mastered multitasking by now. Here, however, we would like to offer some more down-to- earth advice, the first draft of a must-do list for CIOs in the global digital economy, drawn from steps IT executives are taking today to upgrade their roles and transform the IT function into one that has a direct and profitable impact on the business.

To begin compiling our list, we assembled a virtual focus group of seasoned IT executives, all of them members of  the  CIO  Straight  Talk  Interactive  group  on LinkedIn. We talked to Ann Alrich, former CIO of Asia- Pacific  and  various  business  units  at  DuPont;  Scott Blanchette, Senior Vice President and CIO at Vanguard Health Systems; Ed Jurica, former Senior Vice President and CIO at the fashion clothing company Fossil; Alexandre Kozlov, CIO of the Extruded Products Division at Norsk Hydro, an aluminum  and  renewable  energy company; Isaac Sacolick, CIO at McGraw Hill Construction, the  McGraw  Hill  Financial  company  that  helps connect  people, projects, and products across the construction  industry;  and  Stephen Thurlbeck,  Vice President of R&D at Complete Innovations, a leading global provider of technology solutions for mobile workforce management.

The picture that emerged from our talks with these leaders is of an IT function that is both stable and innovative, fault tolerant and fast learning, reliable and experimental. It is an environment characterized by paradox: safe is risky, stable is dangerous. Conversely, constant change ensures resilience, experimentation safeguards continuity. These IT leaders work to seamlessly integrate IT with the business and find ways to innovate while “keeping the lights on.”

The conversations also revealed that the IT function is looking more and more like a web-native company such as Google or Amazon — call it the Google-ization of IT. Organizations that want to take advantage of the opportunities presented by the digitization of everything increasingly infuse information technology into everything they do — their operations, their products and services, the way they go to market, their interactions with customers and prospects. IT no longer drives the business. IT is the business.

IT is also innovative. Contrary to the widespread belief only ten years ago that IT’s innovative days were over, new ways to practice enterprise IT and new tools and technologies emerge all the time. The greatest and most radical changes over the past decade happened in web-native companies, where the complete fusion of IT and the business has driven IT innovation on an unprecedented scale.

The CIOs we talked to highlighted specific actions they have taken to bring some of the characteristics of web-native companies to their organizations — in some cases with a twist or two of their own.

The list we present here is tentative and probably incomplete. We invite you to refine and expand it by   joining the conversation on the CIO Straight Talk Interactive group on LinkedIn.

1. Never “work with the business”

Web-native companies have built their businesses on IT innovation. Engineers and product managers in these companies are technologists, many of whom are involved in developing and maintaining a vast IT infrastructure.

Outside of the websphere, leading companies are moving toward a seamless integration, even a fusion, of business and IT. “The paradigm of there being a business and there being an IT department trying to drive an alignment is antiquated,” says Scott Blanchette.  “You’ve got to do more than just ‘work with the business’ — really, I’m offended by that term, because we’re as much the business as anything else around here.”

Ed Jurica found a creative way to drive home that point, one that his team members recalled years later. He told them, “When you find yourself saying ‘the business,’ hold your tongue with your fingers and say ‘IT is the business.’ It drives home the point that we are as important as the business and completely integrated with it.”

At Vanguard Health Systems, Blanchette took the idea to its practical conclusion, embedding IT in the business units.  “IT is no different than the finance function  or  the  service delivery function or the clinical function,” he notes. “I come from Northern California, and that is just the way companies in Silicon Valley are run.”

True to his roots, Blanchette believes IT should allow for “some level of chaos” but also provide mechanisms for supervising it. It’s a cross-enterprise role that has multiple dimensions, but its essence is the technology expertise and experience that resides in IT and is embodied by the CIO. These are skills and know-how that are more important than ever to the management of any enterprise.

Being part of the business means taking initiative. And if IT is seamlessly integrated with the business, there is no reason why a CIO should not help lead enterprise-wide change, transformation, and business innovation, just like other senior executives. As Alexandre Kozlov argues, “CIOs shouldn’t wait to be invited to the table; they should make themselves relevant to the business and contribute to generating revenues.” Ann Alrich agrees: “It’s absolutely imperative that the CIO is a member of the senior business team so he or she is involved in developing the future plans and the strategy for the business.”

Stephen Thurlbeck has done just that at Complete Innovations. “Oddly enough from someone focused on technology, I’m pushing the balanced scorecard approach throughout the business,” he says. “This is a big change: I’m pushing from within IT, but ultimately it’s going to benefit the entire company.”

2. Learn fast, but contain failure

In a 1982 paper, the late computer scientist Jim Gray wrote about “fail-fast” in the context of applying hardware fault-tolerant principles to software engineering — each hardware or software module “either does the right thing or stops.” By insulating each software module from the others, Gray and other experts in fault-tolerant systems achieved what they called “fault containment,” ensuring a quick detection of errors without impacting the entire system.

Since then, the Agile Software Development movement adopted and promoted the concept, which is probably how the fail-fast idea permeated the culture of Silicon Valley and became a business philosophy. Now it’s one that IT organizations are using to become an indispensable part of their companies’ product development efforts.

Many IT teams today are using Agile practices, including constructing experiments to see whether something fails or succeeds. Isaac Sacolick points out that his team has been doing that through “spikes,” projects of short duration used to research a concept or create a simple prototype. “If I have to integrate with a new API and we are not sure how complex it is, we are going to try to experiment with that,” he says. And if the experiment is a failure? That’s OK.

Speed, the “fast” element of “fail fast,” also offers crucial benefits. As Stephen Thurlbeck points out, “Everybody is on the same page at the same time. We are making changes when we can and as we should, rather than going into the development black box for months and months and coming out with something that either didn’t have the right specs or was not produced correctly.”

Scott Blanchette cautions that fail-fast is fine as long as it doesn’t become “fail fast and often.” Sometimes the approach can “morph into a justification for not doing sufficient due diligence or sufficient planning,” he notes. The key to fast learning is failure containment. If you design your experiments carefully,  you  ensure  that innovative ideas get a well-defined test and do not affect ongoing work, and that lessons are analyzed quickly to identify the next step.

[Read Part 2 and Part 3]

Originally published in CIO Straight Talk, No. 4 (December 2013)