How Transformational CIOs Drive Digital Innovation
You might have thrived in your role two or five years ago. But today, success requires a new approach to IT strategy. Are you the kind of CIO who can drive digital innovation in the age of technology?
Winning in the digital age demands enterprise-wide evolution. This is a high-stakes endeavor, and you’re the one accountable for it.
It’s up to CIOs to ensure the organization keeps pace with change. You need to build transformative digital strategies. You must shepherd the business through the next phase of digital transformation.
But this is difficult terrain to navigate.
A culture that embraces innovation and experimentation is essential for achieving digital adoption, and ultimately propelling the business ahead of the competition. At the same time, you must yield to stakeholder demands for stability and data security.
As a CIO in the digital age, your challenge is to figure out how to boost digital innovation while minimizing risk.
Digital leaders are laser-focused on 3 priorities
Previously, your role likely focused on incremental improvements to the IT infrastructure. Today, as digital becomes embedded in all aspects of work, CIOs must play a more proactive role in the overall business strategy.
65% of technology leaders say the role of CIO and IT director are becoming more strategic, according to the 2018 Harvey Nash/KPMG CIO Survey.
Strategic IT leaders are narrowing in on three priorities, according to the survey.
- Developing innovative new products
- Delivering consistent and stable IT performance for the core business
- Enhancing the customer experience
At the same time, you must balance these goals with requests from key stakeholders. Boards are asking CIOs to improve business processes, increase operational efficiencies, save costs, and improve cybersecurity, the survey found.
3 factors are challenging digital innovation
Identifying your goals is only the first step to achieving digital innovation. You must also anticipate and plan how to overcome likely obstacles.
Most companies experience the following three challenges to some degree.
1. Skills shortage
Sixty-five percent of tech leaders said a lack of talent is preventing their organization from innovating, according to the survey.
A talent deficiency is a major obstacle, mainly because it stems from several challenging factors.
One is that there are not enough people with the right experience and knowledge to meet current needs. The other is an inability to instill the necessary skills through adequate employee training.
2. Ineffective digital strategy
Although most leaders recognize the need to zero in on a digital strategy, just 32% of organizations have an enterprise-wide plan in place, the survey found.
Worse yet, 78% of CIOs believe their digital strategy is only moderately effective or ineffective.
3. Lack framework for designing and executing innovation projects
Speeding up effective project delivery is key to innovation. But just 52% of survey respondents said they have successfully scaled agile methodologies across the organization.
Without a framework for planning and carrying out innovation initiatives, each experiment will face a number of design, bureaucratic, and logistical challenges. Effectively scaling agile methods means there is a set of processes in place that drive projects from conception to completion in the most efficient way.
6 ways to promote enterprise-wide innovation
The challenges above are tricky because they have many contributing factors and can be hard to pinpoint. But you can prevent them from damaging your innovation efforts by making a few important changes.
This is how transformational CEOs embed digital innovation into their organizations.
1. They have a compelling vision for boosting digital capabilities
Strategic CIOs create a vision for how the business can unleash new digital capabilities. They articulate how digital will benefit the core business line, operations, and talent in terms of revenue and efficiencies. They collaborate with the rest of the executive team to guide the organization toward digital adoption.
2. They have a chief digital officer
Businesses that have someone dedicated to driving the digital agenda will automatically have a leg up.
Those with an acting CDO are more than two times more likely to have a clear enterprise-wide strategy already in place, according to the survey.
Since it is a relatively new position, you can make the CDO role laser focused on your key priorities. Of course, the CDO should be involved in initiatives to innovate your products and improve operational efficiency. The less obvious value of the role is in talent development.
For example, you can overcome the talent shortage obstacle by taking a more effective approach to training. With innovative digital learning tools, you can empower your staff to adopt new technology and improve proficiency faster and with higher retention rates.
3. They embed values of innovation and experimentation into the culture
Fifty-nine percent of digital leaders and 49% of customer-centric leaders believe their digital strategy would fail without an innovative and experimental culture to back it up, according to the survey.
Achieving your digital vision requires more than just having the right technology and strategy.
It’s equally important to have the right people and culture. Agility, experimentation, and comfort with uncertainty are integral characteristics of an innovative culture.
4. They are fanatical about delivering value to customers
Traditionally, CIOs didn’t play a big role in crafting the customer experience. Now, it’s a must. Digitally savvy companies use technology to boost the customer experience.
Customer-centric organizations also earn higher revenue and profits. According to the report, 57% of organizations that create engaging customer experiences reported higher revenue growth than the competitors. Fifty-two percent of customer-centric organizations reported higher profitability.
5. They invest in emerging technologies
Effective IT leaders drive digital innovation in their companies by investing in high-value tech. For instance, digital leaders are six times more likely to be investing in virtual reality than their peers. They invest in blockchain five times more, and robotic process automation 2.5 times more.
Artificial intelligence is of great interest to transformational CIOs — 70% said it’s part of their investment plans, according to the survey.
AI has high potential value for a broad range of functions, both internally and customer facing. For example, companies that implement RPA can dramatically raise operational efficiency and employee satisfaction by assuming many high-volume, mundane tasks.
6. They fail fast
Digital leaders integrate processes that promote a “test and learn” mentality. They use evidence-based decision making to maintain a culture that is receptive to change and always strives for growth.
They encourage experimentation, scale up successful projects, and don’t dwell on failures.