Saying you do not need a CIO because everyone uses technology is like saying you do not need a CFO because everyone has a bank account.
The Strategic Brief:
The digitally savvy company will adopt competencies from ‘born-digital’ successes like Amazon; ‘disruptive’ successes like Apple and ‘cross-over’ successes like GE. It will challenge prior investment strategies and be ready to shutdown traditional business streams in order to create new digital products and business models. Becoming digitally savvy requires a pilot. Even with a company of millennial digitally-aware staff, technology needs an advocate. The challenge is not normally the new hires, but making the C-suite and executive teams digitally aware. A company needs someone who has the executive profile to take the company from current state to digitally savvy state. The CIO can and should be the catalyst that increases the rate of travel towards the digital savvy destination.
The Digital Generation
The ‘senior’ generation in 2016 grew up in a world where technologist was a specialist role. I repeatedly learn this while volunteering in one-on-one teaching of computer skills to the elderly at NYC’s public libraries. “I was a nurse or builder, and I did not need to learn Excel. That was IT’s job.” is often heard. These senior students are often starting from “what is a browser?” and “how do I use a mouse?”. During their successful careers, they did not have to learn how to use technology. Technology was someone else’s job.
The generation reaching executive management today used technology since childhood. Technology is self-serve. This generation googles for answers to issues before they contact technical support, and prefer to bring their own devices to the workplace. If technology is self-serve and everywhere, then why does the IT department still exist? Saying you do not need a team focused on technology because the whole world uses technology is like saying you do not need a CFO because everyone has a bank account. In any digital organization, you still need someone focused on technology. Yes, their role needs to be very different. The role of the IT department is no longer just supporting technology or computerizing processes, it is now about weaving digital savvy into the products and services you deliver.
savvy |ˈsavē| – shrewdness and practical knowledge; the ability to make good judgments.
The ‘digitally savvy’ company is aware of the disruptive nature of the digital age. Digital commerce and digital marketing significantly changed the way you sell, but did not necessarily change your company and offerings. Digital savvy is the next stage, requiring leaders to target digital products and promote digital-aware business model changes. The journey begins with assessing ‘born-digital’ companies (google, facebook, amazon) and deciding which competencies you must adopt from them. This should reach through to internal investment strategies and embracing approaches exploited by start-up companies and VC investors. Alongside is the continuous monitoring of changing materials and technology. Can miniaturized sensors enable deeper data analysis for your customers like it did for Babolat? Like Babolat, the digitally savvy company creates a program of work for how digital changes their products and services. Simply defining a goal of ‘we want to be digital’ is not enough. The end point is that you change what you make and sell, as well as how you sell it. For most companies, you may require board-member education sessions, supporting c-suite education, and then down several management levels. Digital savvy requires the ability to move your culture forward at the pace at which the market is moving.
Signs of the Wrong Road
Do the changes feel incremental? Polishing or incrementally extending todays model is a warning flag you are not approaching digital savvy correctly. Consider a magazine deciding to go digital. One approach would be creating a PDF version of their paper magazine and offer that to readers. This is a ‘polish’ to existing product, but is not changing their business model of price per issue. The other direction would be to use their product as content for a website. Build themselves an interactive community and changing to a click-based advertising business model providing a more dynamic reader experience by updating stories immediately before publication, and a better customer experience by providing data back to advertisers.
Are you over-reliant on past experience? Humans rely on pattern recognition. Pattern recognition can be a strength when reading this sentence. In reading, you are matching the letters to mental templates of the alphabet. In leadership, pattern recognition can be powerful in assessing risk based on prior experience – e.g. “we need data backups in case of a failure of our cloud provider”. But it quickly becomes a weakness when experienced managers are over reliant on past behaviors – e.g. “there is no point trying to hit quota in the first quarter as we always miss”. Acceptance of the current state as normal can be an impediment to success and even lead your company to irrelevance.
Is digital part of your strategic plan? Note, I am not asking if digital is part of your IT plan, but part of the overall company strategy. This should extend all the way to your internal investment portfolio. Traditionally, the internal portfolio for a company invests in new products once a proven business case is put together. Quick evaluation of potential is followed by detailed examination of the market and finally the potential product/service qualifies as an item on the strategic portfolio. Success is assumed due to the research performed before investment. That traditional investment portfolio with product traditional results. To match the disruption coming from start-up competitors, a large company needs to adopt the competencies of VC and Angel investors. The disruptive internal portfolio has up to a dozen projects receiving investment, with an expectation that only about three of them will deliver breakthrough successes. Higher risk, for higher gain. To gain the shrewdness of ‘digital savvy’, the digital must be part of company strategy, plans, and policy.
Are you ready to shutdown or curtail some traditional portions of your business? There is enormous gravity to existing business models, pricing and distribution methods. They are familiar and comfortable to you as well as your customers. Yet if you consider the successfully transformative digital companies you will notice they transform the business model as well as product and service delivery. Expect to make wholesale changes. Expect it to be painful. Make sure you plan to alleviate that pain as much as possible for staff and for customers. Your customers want you to succeed. They want to have a great experience. They will help you through the change, if you make it possible for them to do so.