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Next-Generation CIOs: Effective Leadership For Digital Transformation

March 7, 2016 by Carsten Linz 124

Next-generation CIOs have the chance to pave new ways for doing business due to the expansion of new technologies.

Cloud computing, hyperconnectivity, in-memory computing, and smart sensors are all examples of how data is becoming the golden asset for companies. CIOs need to proactively shape their firms’ technology roadmaps and deliver measured improvements in customer value.

What are the skills and competencies a CIO needs to succeed with digital transformation?

When IT becomes an integral part of the company’s value creation process – e.g., Netflix IT is running the largest Internet television network – many CIOs are under pressure because they often lack the competences and experience in the new leadership domains. On the upside, with the right leadership skills, this provides an opportunity for CIOs to elevate their game and make IT departments a strategic driver for their company’s business success.

Skills and Competences that Thrive in the Digital World

What are the skills and competencies a CIO needs in order to succeed with digital transformation? At our CIO Center for Digital Leadership, we have strategic discussions with CIOs and digital leaders on a weekly basis. These discussions often bring together the CEO, chairman, and CFO of various companies. With these discussions in mind, we recently took some time and formulated the following skill patterns seen in successful CIOs.

It should be stated that we do not agree with the mainstream logic that digital will completely change the CIO profile. In contrast, we firmly believe that the following traditional CIO role requirements remain relevant.

  • Technology advisor: There is a need to enable the executive board based on real-time insight and digital capabilities so that the company can make strategic decisions to drive business.
  • IT Service provider: Accountability for guaranteeing highly reliable IT services (SLAs) – e.g., to the lines of business and every employee – remains with the CIO.
  • Business partner: An IT organization that does not drive business value will disappear. Design thinking and agile approaches make it natural to work hand-in-hand with the lines of business to achieve shared business goals.
  • Security chief: Being the security chief remains key and cannot be delegated. Additionally, providing trust and stewardship regarding data usage to customers, partners, and employees remains vital.

In addition to these traditional CIO roles, new leadership requirements are emerging. When taking the lead, the CIO has a unique opportunity to turn IT into a strategic part of the company’s value creation process. The CIO also competes with other stakeholders in the c-suite, namely the chief digital officer (CDO), which is still fuzzy, and the well-established chief marketing officer (CMO). But from our perspective, the business leads will arise as top dog in driving digital initiatives. Hours are ticking; the question is: Who will be in charge?

The following roles are being distributed in every company:

  • Visionary: Day-to-day business demands often make it challenging to stay focused on shaping the future and delivering an ambitious but motivating target picture. Technology must play a leading role now more than ever.
  • Data alchemist: Sure, the alchemists tried unsuccessfully to convert base metals into gold, but they also laid the foundation for modern chemistry. Today we need leaders who build organizational capabilities in order to transform data within knowledge and formulate recommendations for their business.
  • Entrepreneur: CIOs need to drive open, platform-based, agile innovation for future bets. Startups innovate on top of platforms and elastic cloud infrastructures. The CIO owns the same tools and needs to provide a scalable foundation so innovators can drive new use cases and new business models.
  • Digital transformer: Everyone talks about digital transformation, but few know how to lead the change. A tailored digital transformation framework is required to systematically drive the deltas between the status quo and the desired digital end state. The CIO must construct a specific company framework and take sufficient time to align with c-level colleagues.

These are not the typical skills someone would have read in a CIO’s job description a few years ago. But the game is changing and requires accommodations.

A CIO has the unique opportunity to turn IT into a strategic part of a company’s value creation process.

Systematically Building Future Digital Capabilities While Delivering Results Today

If CIOs want to lead and change, they must manage the digital transformation. The CIO must have a sound strategy to cater the required leadership skills with regard to the business development plan, and certainly for the leadership team. Digital requires managing multiple modes. CIOs must start today in order to develop the competencies needed to orchestrate and balance multiple modes for value creation and their spillovers.

It is the CIO’s responsibility to drive platform innovation and renovate the core to future-proof your IT. The establishment of an agile and open culture, with concepts like design thinking, lean startup, crowd-sourcing of external ideas, and innovators are ways to instill the value of transformation. Recognition of “operational heroes,” or  those who secure rock-solid operations and have an SLA laser-focus, goes a long way, colleagues. (However, avoid using the words entrepreneurship and innovation in every case.)

Digital transformation requires leading from the top, and it affects the entire enterprise, not just IT. An entrepreneurial CIO can take the lead and be the chief innovator. I agree with Neelie Kroes, the EU commissioner for digital agenda, when she wrote, “There is no room for complacency in the fast-moving digital world.” But I would also remind you of Steve Jobs, who proclaimed, “Apple is leading the digital music revolution, but at its core, it’s all about the music.”

Digital transformation is foremost a business and leadership challenge. CIOs, utilizing their data platforms, have a unique opportunity to become their company’s visionary by instilling an entrepreneurial spirit and leading digital transformation.

Want more insight on digital transformation? See Going Beyond The Digital Veneer.

This story originally appeared on Digitalist magazine.

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