The consequences of inaction are growing. In Beyond Digital, Paul Leinwand and Mahadeva Matt Mani write: “The future belongs to companies willing to let go of past belief systems and define new, bolder value propositions.”
Organizations can no longer survive by simply trying to swim against the waves of change. As the basis of competitive advantage is increasingly found in things other than physical products, the cost of doing nothing becomes too great. Today, companies with a “right to win” attitude are focused on accelerating change rather than trying to block it. This includes creating new business models and differentiating what they do and how they operate. As CIOs find themselves in the midst of this change, what are they thinking? How do they assess the state of their companies today?
Is leadership still resisting the tides of change?
How do people justify inaction? Sometimes it is a job retention strategy, other times changing the status quo is seen as too risky. Other times inaction is the result of an inability to agree on a way forward. And since culture eats strategy like breakfast, culture can be the source of an immune system against change. In this case, culture acts to prevent changes in strategy that would negatively impact current successful operations. This was clearly the case with Kodak, where the company did not capitalize on the trend in digital photography despite inventing it.
Inaction means decision. In this case, leaders knowingly or unwittingly choose to do nothing. This sends the message that maintaining the status quo is a decision. In such organizations, leaders may try to wait for change.
But doing nothing comes with increased risk. In some cases, doing nothing can lead to the demise of an organization as people know it, in the form of bankruptcy, liquidation, or acquisition. This happened with one of my former employers, Adaptec, which went from a $2 billion company to being sold for just $35 million in revenue. One of my professors in graduate school used to say that one of the reasons businesses fail is because of their previous success. Think Polaroid, BlackBerry, Blockbuster. Geoffrey Moore, in Zone to Win, provides an even more exhaustive list of companies that were blinded by their own success:
On the other hand, a “wait and see” strategy often leads to missed opportunities to act when the organization has ample resources and capacity to do so. Fortunately, most leaders recognize the risks. Today's CIOs say business leaders understand that driving consistent change is more urgent than ever.
One reason is the realization that resisting change doesn't really work. Clearly, we need leadership that can see the opportunity at hand and be proactive about change. We need leaders who recognize that faster change than ever before is the norm. Education CIO David Seidl said, “I'm fortunate to work for a change agent who was hired just like that. Higher education is an industry with a lot of inertia to overcome. I look around at my peers and I see people who are working on change, especially the most significant changes around DEI and positive social change, and I see people who understand that it's a process.”
Related Article: Technology leaders lead innovation by being proactive
Ensure fact-gathering doesn't become a never-ending process
CIOs are very familiar with analysis paralysis. They suggest that leaders understand the fact that there is no such thing as a perfect analysis. Everyone involved in the planning process needs to be comfortable with the quality of the analysis that is possible. They also need to understand that fact gathering is a continuous process, and that a running plan will need to be adjusted as new facts come to light.
Today's action-oriented CIOs support the need for speed in business. Therefore, the corporate culture must recognize the need for speed and reward successful transformation. It's important to ensure that rational decisions made when limited data is available aren't penalized. Part of this requires all parties to agree on deadlines. This includes setting time limits to ensure analysis is completed. Therefore, leaders must decide up front how much time they will spend on fact gathering and stick to the timeline.
The timeline for when decisions will be made must also be set in advance. To do this, organizations must assign target timelines and prioritize the information and analysis required. But CIOs also recognize the need for an agile approach before making decisions. The lesson of agile is that analysis paralysis is best addressed by rapid iteration. As analyst Dion Hinchcliffe puts it, “There is a tension between the current business operators who are invested in continuity and consistency, and the innovators who can see the future and want to create it. This clash is significant and can ultimately stifle change.” Derek Abell was clearly right when he argued that leaders need to manage two strategies: the present and the future.
Related article: Don't wait for the innovation lottery: A deliberate approach to idea generation
When should the CIO get involved in the planning?
I asked CIOs when they typically get involved in planning: To formulate the disruption (a system of threats and opportunities)? To plan the objectives to be pursued? To plan the means to achieve the objectives? Or to implement the change design? The answers varied. Many CIOs said that sometimes they get involved from the beginning, and sometimes they only get involved when someone wants to connect something or something doesn't work.
Ideally, CIO involvement should start early. In fact, the earlier the better. One solution is to make the CIO a formal member of the executive leadership team. The best results are achieved through partnership and inclusion. Additionally, CIOs play a key role in establishing a culture of innovation.
“CIOs need to be involved in strategic planning from the beginning, or at least be in the conversation early from a strategic perspective. Once the strategy is in place, the IT organization can act as a good problem solver and work through the innovation sequence,” says Deb Gildersleeve. CIO David Seidl adds, “In the best case, we're involved at the ideation stage or as soon as someone says, 'I want to do something.' Obviously, this varies by organization, by leader, by relationship. I think early involvement is a good benchmark for a CIO to be successful.”
Related article: How CIOs and CHROs can work together to reimagine the employee experience
Current state of the corporate planning process
Historically, planning has been driven by the CEO, and that should continue to be the case as long as the CEO oversees the execution of the strategy on behalf of the board. But we believe CIOs need to recognize that many people, regardless of title, can help effect change: other C-Suite members, business units, and influencers. CIO Cathleen Curley says, “It's important for the CEO to be a big sponsor, providing vision and support for the outcome of an active, participatory planning process. The rest of the C-Suite needs to step up and lead the effort in this way.”
At the same time, CIOs point out that if the process isn't proactive and participatory, it's a business and culture problem. To have an effective planning process, the CIO needs to have a strategic seat at the planning table — not necessarily in charge of the corporate strategy, but having a say in what happens.
CIOs emphasize that corporate strategy should increasingly be a cross-functional process, and as part of that, they need to recognize that their organizations face an environment of rapid change, so planning must involve the entire leadership team.
Today's CIOs have a unique opportunity to work more closely with CEOs and act as change agents to drive a more proactive and participatory approach to planning. CTO Stephen diFilipo suggested, “We need a term or phrase that's similar to planning but takes into account the requirements of acceleration and agile. Planning requires time to be considered.” Clearly, organizations need to move to a proactive and participatory approach to planning that is less top-down. Analyst Jack Gold said, “Enterprise strategy in the digital age requires a matrix organization with many contributors. No part of the organization can do everything alone, or do it right. Who ultimately reports to whom the plan is is less important, as long as they are visionary.”
There's no time to stand still
Organizations today cannot stand still, even if they could. They need CEO and CIO leadership. In fact, CEOs and CIOs need to be business partners on digital strategy. To close with a quote from Gold: “How can a company move forward with its plans for the future if it doesn't know what technology will be available to support them? CIOs and IT are essential parts of any organization's planning and execution game plan and need to be involved from the get-go.”
Learn how to join our community of contributors.
