CIOs driving digital transformation are operating from a different playbook than in the past, including more focus on customers, business strategy, and oversight of new revenue and functional areas.
By Beth Stackpole
In the lead up to Synchrony Financial being spun out from parent company GE and launching an initial public offering (IPO), Carol Juel was front and center explaining the newly independent company’s business strategy and innovation plans. Juel was even known to cart giant poster boards from meeting-to-meeting to help customers, partners, and internal employees fully grasp the new firm’s digital mission.
Juel isn’t Synchrony Financial’s CEO, COO, or even its CFO, but she was the right messenger at the time because as CIO, Juel was a key driver of digital transformation. “The role of the CIO is now about driving relationships across the management team, ensuring that the company and board of directors understand the role of technology and what the potential is,” explains Juel, who is also a Synchrony executive vice president. “I see my job as helping to connect the dots and figure out a way to communicate where we need to go in a way that people will understand.”
Of all the leadership roles, the CIO is evolving the fastest with the most change and opportunity. Today’s CIOs are expected to meet with and educate customers and partners so they understand new technology-driven business initiatives. They are taking management responsibility for additional functional areas and new revenue streams, and they are serving as business strategists. The 2019 State of the CIO survey, which surveyed 683 IT leaders, confirmed CIOs are operating from a different playbook than in the past: Sixty-seven percent of respondents said they are spending more time on business strategist functions to help drive innovation and nurture go-to-market plans and 81 percent acknowledged an expanding role with greater responsibilities.
Oversight of data analytics efforts is by far the most high-profile new addition to CIOs’ ever-expanding plate, cited by 64 percent of respondents to the 2019 State of the CIO survey. CIOs are also taking ownership of projects and work products in areas such as operations (43%), business development (38%), customer service (32%), and product development (29%). Beyond new management responsibilities, more than half of survey respondents (62%) confirmed they were tasked with new revenue-generating responsibilities, including oversight of new products and services, as part of their evolving job descriptions.
It’s a tall order, and to rise to the challenges of a digitally-charged future, CIOs are embracing new rules of engagement. Many are striking partnerships with leaders in other functional areas while developing command of the overall business and core objectives that goes far beyond understanding how to transform business processes. Like Synchrony’s Juel, CIOs are also polishing up their communications and presentation skills as there’s a growing requirement to be comfortable embedding with external customers as well as addressing the board of directors to effectively navigate these new directions.
Given that the CIO spot affords a bird’s eye view of the entire organization, technology leaders are a natural choice for leading digital transformation and showcasing how changes will impact the various functional areas of the business. The 2019 State of the CIO confirms the shift is real: The majority of respondents (88%) said they were taking a more active role leading digital transformation efforts compared to their business counterparts.
“What’s missing in a lot of organizations around digital strategy is a cross-functional roadmap—you might have one for customer experience in sales or marketing, for example, but not one that runs across multiple areas,” explains Meredith Whalen, chief research officer for IDC. “The leadership opportunity for CIOs is to pull functional leaders together to help them develop a customer experience roadmap that would identify all the use cases that would transform CX across all functional areas.”
Partner with the business
Nurturing partnerships with other functional leaders is at the top of the list of new rules of engagement. While CIOs have long recognized the need to align with their business counterparts, Whalen says many of those early digital partnerships have primarily been with the marketing organization. It’s now necessary for CIOs to branch out to other areas of the business, including service, sales, and analytics functions, she says. To foster those relationships, CIOs need to move beyond a focus on business process improvement to a deeper understanding of the functional areas as well as overall enterprise business goals, Whalen says.
“You need to understand the business stuff to be able to proactively identify emerging technologies and make recommendations about how they will transform the business,” she explains.
Loosen the reins on data
For Cynthia Stoddard, senior vice president and CIO at Adobe, cultivating partnerships and collaborating with different business stakeholders is now an essential part of her role, especially as the company doubles down on data-driven analytics as part of its emphasis around customer experience. Historically, Stoddard says data has been held hostage in huge transactional databases with CIOs dictating the terms of access through enterprise governance rules.
Today, with data-driven analytics powering all aspects of the customer journey, Stoddard says CIOs need to change the way they view data and that requires cultivating a deeper partnership with business partners who are now the overlords of critical data. In the traditional paradigm, data was treated as a shared resource centrally managed by IT.
“The old way of dealing with data is putting walls around it and IT dictating the standards for how it is used,” Stoddard explains. “The new way is through collaboration with the business to come up with a common set of metrics and definitions across the customer journey.” IT’s role, she says, is to facilitate and bring groups together through the governance process. “It’s about building strong relationships and getting a deeper level of engagement that probably wasn’t there before.”
Get close to your customers
Nurturing strong relationships with external customers also needs to part of the engagement mix. Like Synchrony’s Juel, Justin Formella, chief strategy officer at MBX Systems, now spends a good chunk of his time on the road hosting regular conversations with external customers of the manufacturer’s custom hardware solutions. The requirement is part of the CIOs’ shift away from a traditional operations focus to getting closer to customers and understanding where there are gaps. “We’ve moved away from just focusing on engineering to focusing on marketing and sales and getting out on the road in front of customers,” he explains.
In fact, the emphasis on sales and marketing has changed Formella’s role in other, more significant ways. He recently took over responsibility for the marketing function in addition to leading the company’s technology and digital transformation efforts. The result is the ability to speak to new customers and prospects with a cohesive message that’s in sync with what’s actually in the product development pipeline, Formella says.
“What it allows me to do is make sure we are ahead of positioning the things that are rolling out and to plan our pipeline based on customer feedback,” he explains, adding that historically, those have been disparate processes that left the door open for product miscues.
Sharpen new skill sets — and help foster talent
To take ownership of new functional areas or to communicate effectively with customers, CIOs need to nurture an entirely different skill set.
Communications, business strategy, and the ability to cultivate consensus across different constituencies are among the top emerging skills CIOs need today to be effective transformational leaders. At the same time, CIOs must sharpen their skills in other areas, including talent development and the need to work closely with human resources to stay on top of the growing skills shortage.
Synchrony’s Juel is spending a lot of time in this area, whether that involves working with HR on more effective recruitment practices or helping to define critical skills in areas such as agile practices and cloud development. Juel is now heavily involved with creating training programs to help shore up existing talent and to nurture up-and-coming IT leaders.
“You have to be very open and aware of the talent you have and the talent you need to drive whatever change you are trying to achieve,” she explains. “I’ve had a lot of proud-mama moments helping to build very senior technical leaders and exporting them to other parts of the company to help build our culture and create new DNA for the company.”
Get connected — and focus on culture
Adobe’s Stoddard is evolving her role by sitting on a greater number of advisory boards and fostering relationships with the venture capital community. For her, it’s about being a lifelong learner and creating the connections that will allow her to enable the business. For example, through relationships with VC companies, Stoddard is able to identify the emerging technologies and startup companies that will be instrumental in helping Adobe advance its digital roadmap.
Stoddard is also focusing on making the changes, both technology-related and organizational, that will imbue cloud characteristics in Adobe’s IT culture so the mission is all about enabling the business. “We want IT to be invisible and easy to work with,” she explains. “Whether it’s creating self-service capabilities, opening up APIs, putting governance structures in place, creating workflow engines with robotic process automation (RPA), or self-service into our data warehouse — it’s really about opening up IT in a secure way so people can act on their own to enable their own business processes.”
The new rules of engagement also mean CIOs can’t be afraid of change — whether that means experimenting with new technologies or putting a stop to legacy solutions or business processes that while still working, don’t do much to advance the mission or necessarily add value.
MBX System’s Formella is taking that advice to heart. While it breaks with traditional organizational structure for a CIO to take ownership of a separate functional area such as marketing, Formella says his biggest regret that the company didn’t embrace such outside-of-the-box thinking earlier.
“We’re seeing such a great response to focusing on technology as our differentiator to offer a better experience and understand our customers’ business problem priorities,” he says. “It’s helped us win business we never did before — the fact that we weren’t doing it five years ago is a shame.”
For all the new rules of engagement, perhaps it’s the people-skills side of the equation where most CIOs will find themselves struggling.
“For real transformation in the workplace, it’s really about the people,” notes IDC’s Whalen. “CIOs need to be able to motivate the hearts and minds of those ready to transform and figure out what to do with those who aren’t willing.”