Industries around the world are facing disruptive digital transformations. Emerging technologies are demanding new ways of operating as well as delivering unique, sustainable value.
In several cases, the winners and losers already are becoming evident. One such case is the global fast food giant McDonald’s, which, in 2017, implemented new technology for ordering and delivery, including a mobile order-and-pay-ahead app, in-store digital ordering kiosks and a delivery partnership with UberEats. These innovations, augmented by other digital strategic initiatives, have further cemented the fast-food titan’s market position through increased customer traffic and better earnings.
On the other hand, several once-dominant enterprises that failed to positively embrace disruptive trends – such as BlackBerry, Kodak and Myspace – have either lost a significant proportion of their market share or have been completely swept out of the way by nimbler and more agile newcomers.
The stakes of digital transformation are high. The difference between success and failure, however, often comes down to governance. Using frameworks and improvement models such as COBIT and CMMI can ensure IT investments support business objectives. Successful innovation governance requires understanding and buy-in from both the board and the C-suite. But, these business leaders cannot do it alone.
Here are 5 recommendations to help your board and C-suite improve technology governance and adapt to disruptive change:
- Speak the language of business. While many companies are working hard to recruit leadership with tech expertise, boards and C-suites may not have the depth of knowledge to oversee critical technology-driven initiatives or fully assess digital opportunities and threats. Leaders also may be prone to inertia. They may not see a compelling need to change traditional ways of running the business, especially when these methods have worked well in the past. But IT leaders can influence the board and business executives by talking the language of the board and C-suite – especially addressing specific business metrics: revenues, profits or cost efficiencies.
- Improve your business acumen. Be a business leader, not just a technology leader. To achieve this, you need to ask some important questions: Who are your organization’s key stakeholders? What do they want? What drives business results? What is the business strategy and how does it inform near- and long-term objectives? A CIO with this level of understanding is more likely to influence the enterprise’s strategic decisions as part of the executive team.
- Know how technology will create unique, sustainable value. If you want board and C-suite support, and enough technology innovation budget, it is important that you clearly explain how a given technology will deliver unique, sustainable value to your organization. The most common goals of innovation are to modernize core functions (including elimination of redundancies), improve efficiencies or innovate products and services – but do not neglect opportunities to create a new business model through disruptive technology. For example, DHL and other companies are testing drones for delivery of medication or blood samples for lab tests in remote and hard-to-reach locations.
- Help the board and C-suite assess risk. Business leaders may freeze in the face of disruptive technology. They may convince themselves that it’s too early to invest, or the technology costs too much, or the risk of failure is too high. The choices, however, are binary: Innovate or become obsolete. It is therefore important for the CIO to help the board and C-suite understand that failing to invest in digital technologies may open the door to competitors or have other adverse effects. When companies like BlackBerry and Kodak did not drive technology innovation at the highest levels, it cost them their industry leadership.
- Build an Innovation Culture. Driving digital transformation is hard without a Digital Culture. While a number of boards are starting to direct business strategies fronted by digital technologies, most boards do not only lack digital understanding, but shy away from the digital transformation agenda. Creating a culture of innovation requires executives and boards that are digitally savvy. CIOs need to assist the board and executive teams to upskill their digital skills by assessing current digital fitness to design nimble digital learning plans and by creating collaborative engagement models, such as innovation labs, alternative workspaces or sandboxes. This will ensure that the board is not only steering the main crew in the desired digital direction but will enable everyone within the organization to contribute to the digital journey.
As a business leader in technology, a CIO plays an important role in fostering innovation governance that helps enterprises thrive amid today’s fast pace of change. CIOs who are unable to drive their boards and executives on the innovation bandwagon are being naturally phased out. Being an innovative organization is not about chasing the latest technology fad; it’s about accelerating specific enterprise customer and employee experiences and creating core business value using transformative technologies such as artificial intelligence, IoT, connected clouds, machine learning, virtual reality and robotics to shift business performance and customer experiences. This requires technology leaders to bring their boards on board with innovation governance.