Should CIOs Still Care About Business Strategy?
In which Jill considers pitchers, catchers, and where the ball is going.
“Although executives insist that strategic planning is still a key tool in their management toolboxes, many strategies never see the light of day. Business managers often cite a lack of strategic transparency as one of the reasons for their slipshod planning processes or failure to execute. It’s no surprise then that when it comes to what IT leaders obsess about, corporate strategy isn’t on the list of what keeps them up at night. In fact, many CIOs can’t even articulate where their companies are headed, let alone describe key business objectives. It’s not their fault.”
— The New IT: How Technology Leaders Are Enabling Business Strategy in the Digital Age (McGraw-Hill, 2015), page 64.
The age-old practice of executive teams convening at off-site retreats for “strategic planning” hasn’t changed much in the last three decades. Amid rounds of golf and scotch tastings, they re-hash revenues, reevaluate business partnerships, marginalize upstart competitors and brainstorm new ideas. Budget conversations are inevitable, as are discussions of innovation and becoming more “data-driven.” On the last evening, the CEO delivers a rousing motivational missive intended to inspire his executive team to reduce costs, increase profitability, innovate like crazy and have a banner year.
A week later someone’s assistant transcribes the proceedings and distributes the document to a newly-sober executive team charged with transforming their bloviated musings into an actual plans. If they’re lucky these plans include budgets, headcount projections and execution tactics.
Fast forward three months and someone notices that the new customer retention/supply chain optimization/talent acquisition strategy requires automation. The CIO is invited to a meeting, sparking more brainstorming. Costs are debated (again), vendors compared, and managers advocate for or against the cloud. The entire process takes months, or longer. It’s the opposite of agile.
Strategic planning is changing. Disruptive competitors and lean startups have forced executives to reconsider how they arrive at corporate objectives. Protracted strategy documents have ceded to so-called “strategy on a page.” Individual business units take the reins earlier, engaging IT early and procuring technology quickly.
Given these delivery-focused, grassroots efforts, what should IT’s role be in strategy creation? Do CIOs bother to align their own plans and budgets to corporate goals? Or should they buckle down and focus on shoring up the company’s technology infrastructure, providing software and platforms to enable broad platform, application and data capabilities?
Successful IT leaders can shape-shift along with evolving strategic efforts by assuming one of two roles:
1. Catcher. In the catcher role, the CIO allows line of business managers to define their individual strategies, prioritizing projects based on a range of metrics, including projected costs, return on investment, and breadth of value. The likelihood of successful technology delivery is often higher here, as the business is responsible for communicating how it will execute its slice of the strategic vision, and where technology will be needed. Under pressure for (and increasingly compensated on) fast delivery, business unit executives see to it that projects are delivered in bite-sized chunks.
2. Pitcher. As a pitcher, the CIO has a seat at the table during strategy creation and prioritization. She can thus ensure that technology is embedded earlier into each strategy discussion. (“If we want to increase customer win-back, we’ll need to deliver ‘Next Best Offer’ analytics and implement event stream processing.”) She can also circumscribe delivery iterations and prioritize work efforts based on the scope of the project portfolio.
What do these two approaches have in common? Increasingly IT projects are being treated like business endeavors, not technical ones. They are framed as the automation of business processes that support strategy. When they are successful they are incremental, and the technology is used as foundational, paving the way for other strategic projects.
Of course whether you’re a pitcher or a catcher depends on your company’s culture. (The oft-quoted Peter Drucker aphorism, “Culture eats strategy for breakfast” is evergreen.) Understand how your company’s strategic planning process is changing, know your role in defining and supporting new objectives, and make that change easier for everyone.
Which, single-malt sipping aside, is the true hallmark of an effective leader.