This week’s Searchlight — live from the Fusion 2014 CEO-CIO Symposium in Madison, Wis. — asks the question: How can you expect to move your company forward when your methods are stuck in the days of the Industrial Revolution? Businesses follow strategies for decades upon decades because they work; they’re proven. There’s nothing wrong with that. But it’s important to know when tried and true turns to all through. Such is the case when it comes to what former analyst/current consultant Mark McDonald refers to as the second digital decade.
Speaking at the symposium, McDonald noted what’s missing from the old business model is a recognition of diversity and the needs of the customer. Digital is all about the consumer and enabling the consumer to create an experience of their choosing. Or at least it should be. Too many business are still treating the people who pay their bills like “walking wallets or meat puppets.” This Searchlight points out what companies are doing wrong when it comes to digital strategy — but stay tuned to SearchCIO.com for a tip on how set things right.
Also this week: Apple calls shotgun, Target CIO’s misfortune could help her peers, Facebook + Drones = Huh?, and more!
Two words: Business partner. That was a major theme running through the Fusion 2014 CEO-CIO Symposium this week in Madison, Wis. CIOs, you’ve heard this before and you’ve even discussed how partnering with the chief marketing officer or the chief financial officer makes good business sense. But if all that talk has yet to translate into action — better start moving.
A relatable example of this comes courtesy of your Software as a Service providers — both large and small. Pitching their products to the lines of business is now a tried-and-true strategy. Who needs CIO approval? These products are so easy to implement and use, IT need never be involved!
Rick Davidson, a longtime CIO and the CEO and president of consulting and support services provider Cimphoni, Is no stranger to the tactic. SaaS vendors pitched their products against IT while he, the CIO, was in the room. “Frankly, I think they’re doing IT a disservice,” he said.
Evidence suggests they are. One Fusion audience member recounted how his HR department decided to bring in Workday, which provides on-demand HR and finance software. The HR department boasted it could do so without IT’s involvement. But once deployed, HR began backing off that statement, asking IT to help here and there.
“Now it’s come full circle,” this audience member said. HR came to him a little more than a week ago asking if IT could take over supporting Workday. “They didn’t realize what it meant to support the full functionality of SaaS,” he said.
The good news? It seems many CIOs are starting to roll with the punches — and avoiding black eyes. They’re living examples of statistics from the likes of Framingham, Mass.-based market research company IDC, which predicted that for the next four years, “IT spending by groups outside of IT departments will grow more than 6% per year.”
And they’re helping to transform what would traditionally be considered shadow IT into what one Fusion audience member called “distributed IT.” The professional advisory services firm Ernst & Young (EY) recently commissioned a survey of Fortune 1000 CIOs to learn about the challenges they face today. One interesting data point? Among the respondents, 62% indicated shadow IT services are either not very problematic or not at all problematic. “I was surprised to learn shadow IT was not a problem,” said analyst at EY Advisory Services Jeffrey Krause during his session at Fusion. “I was shocked.”
But Fusion attendees weren’t quite as surprised by the findings. “We made it a non-issue at our firm,” one audience member said. “We’re 65 people in IT and 800 people in the business. We’re outnumbered. It’s just simple math.”
The service-based economy doesn’t signal the death of the IT; instead, as the shadow IT-embracing audience member revealed, CIOs are figuring out ways to adapt to today’s service-based economy and become partners who support the business. “What we wanted to do was to help embrace what they’re doing and provide the guidance, particularly on security,” he said.
As Jonathan Martin, senior vice president of marketing for EMC Corp., put it, “I don’t want to just be a customer; I want a business partner. I have one of those for finance to keep me out of trouble and help me navigate tricky finances at EMC. … I need same thing in IT. I don’t want a specialist; I want someone who specializes in the technology I care about.”
Another week, another disturbing government data surveillance initiative revealed. This time: The Brit’s GCHQ peeping Yahoo web cam chats. The mission was to collect and store facial images — indiscriminately — to be used later when looking for bad guys. Sometimes they got faces, sometimes they got an eyeful they didn’t bargain for. (Indeed, disturbing on a new and different level.) Yahoo is “furious,” and one can easily imagine their web cam users are well beyond such relatively quaint expressions of emotion.
As it happens, this week also saw some high profile bids to respond to data privacy concerns in the form of new smartphones: Black and Blackphone. The former is aimed at business users, the latter at the average consumer (who happens to care a lot about privacy). Blackphone’s big privacy selling point is that communications are automatically encrypted. Black, produced by Boeing, well, essentially if someone messes with it, it self destructs. Not a massive, market flooding of products, sure, but I get the feeling it’s a harbinger of things to come.
So CIOs should take note, as much as the average Joe doesn’t seem to mind giving away his personal info, he expects you to protect it. For those IT leaders who haven’t already — and the trend is picking up — it’s time to think about taking responsibility for data protection to a hands-on level.
Also in Searchlight this week: What it doesn’t take to work at Google, a scary new virus (oh great!), and more!
If possible, we’re both over thinking and under thinking this whole wearable technology thing. Especially when it comes to the role CIOs are playing, and will play, in the trend. We’re over thinking, it seems, the troubles these devices will bring upon IT organizations in the form of another BYOD invasion. No one is suggesting that security vis-a-vis wearables isn’t important — it surely is — but the hand wringing is leaving less time to think about all the good wearable technology can do for a company. And it’s not just in the form of (yawn) more data collection.
As illustrated in this week’s lead Searchlight item (and really, there was definitely more than one of its kind to choose from), wearable technology offers tremendous opportunity to enhance the work being done inside your company. It’s definitely worth thinking about — and acting on.
Also this week: Facebook buys some new friends with $19 billion WhatsApp purchase, Google launches yet another mapping initiative, and more.
Finding the right talent can be a challenge. Another? How to keep good talent once you’ve got it. For Jim Noga and Partners HealthCare, a healthy turnover rate hovers at around 10% to 12%. “If you start to get up to 15% to 20%, you probably have a problem you need to deal with,” said Noga, vice president and CIO of the Boston-based nonprofit. Noga is trying to “aggressively manage” that statistic. How? One way is by revamping the performance appraisal process and incorporating company values such as collaboration into the evaluation process.
Take a closer look at what Noga said about talent and this performance appraisal revamp when he spoke at the Society for Information Management’s annual gathering a few months back:
We’re really driving values this year. And, something nonprofits don’t typically do, we’re starting to drive talent and performance management — understanding that if you don’t deal with the problem people in your organization, eventually it really erodes the morale of the team. I’m a big believer if you have a high-performing team, you attract high-performing people. So it’s important to have a highly-talented organization.
We’ve revamped our performance appraisal system, not that performance appraisal is the be-all and end-all. But, besides the technical skills, a good component of what people are now evaluated on are things like team building or respect for each other. We have about eight core values the manager is expected to score people on.
We’ve also gone to a different scoring system. For those of you who’ve dealt with numeric scoring systems [0 to 5, for example], it seems like half the discussion [boils down to whether] an employee was a 4 or a 4.5 and the back and forth debates were over these decimal points. So we now have three categories: We have exceptional, successful and inconsistent. We tell people successful is a really good place to be. Even if you’re successful, you may be exceptional at times, but we’re really reserving the exceptional category [for the cream of the crop] and looking at ways to reward those [employees]. Probably 10% to 15% of your talent is in that exceptional category. The majority is in the successful category.
We call the last category inconsistent. Our executive vice president, he was at one of my IS [information systems] departmental meetings, and we were explaining this. He’s pretty transparent, and I didn’t expect him to say this, but he said, “And if you fall into the inconsistent category [this year], and next year you’re in the inconsistent category, we’re going to ask you to leave.”
So it was a seismic shift, at least for Partners, in terms of talent and performance management. And it’s not meant to be punitive. It really is to seek out the good talent and reward the good talent and that’s important from a retention perspective.
As Satya Nadella settles in at the helm of Microsoft, all eyes are on the “new” guy (as new as a 22-year veteran employee can be). And rightly so. It’s a pivotal time for the company that seems to be lagging behind in today’s all-important areas of personal devices and mobility. But as Microsoft moves into this new era, CIOs would do well to keep an eye on Nadella’s right-hand man.
After six years away from Redmond pursuing philanthropic endeavors, Bill Gates will once again be ensconced in the company’s day-to-day activities as a special adviser to the CEO. Some say more than half a decade apart from technology puts Gates too far out of the loop to bring any sort of needed vision back to the business. But, as this week’s lead Searchlight item details, wherever Gates roamed, he still had one foot in Microsoft. In an industry where nothing is so highly prized as innovation, is it too far fetched to think his time away will perhaps inspire some truly outside-the-box thinking? Keep watching.
Also in this week’s Searchlight: at 10, Facebook is already an old fuddy-duddy (but that might be a good thing); Watson wants to focus on your feelings; Apply and Google join forces for an epic battle; and more.
Last week, MIT alum Andrew “Drew” Houston, CEO and co-founder of Dropbox Inc., returned to his alma mater to talk about “The War for Talent” in a fireside chat with Jason Pontin, editor-in-chief of MIT Technology Review. There, Houston touched on how, as the organization has grown over the years, the company culture has had to grow right along with it.
“The culture of a startup starts as bizarre average of the founders’ personalities,” Houston said. And it evolves from there. Because many of the initial Dropbox team members came from the Cambridge, Mass.-based campus, including Houston’s co-founder and CTO Arash Ferdowsi, “a lot of the Dropbox culture descended from the MIT culture,” Houston said.
As Houston and Ferdowsi brought in new hires with different backgrounds, maintaining an MIT feel became harder, Houston said. “So you have this drift, and you wake up and say, ‘Now we have to really be clear and set down what this culture thing actually is,'” he said.
They approached it as an exercise, trying to figure out, for example, ways to verbalize the characteristics they look for in new hires. “We took it from this implicit thing based on feel and actually wrote it down,” he said.
“What are the written, expressed values?” Pontin asked.
Houston ticked them off one by one:
- Have the drive to “do important things.”
- Have an obsession for achieving a high quality standard on everything — from hiring to customer service to product design.
- Break new ground; be inventive. “We want to do things better than any company ever before,” Houston said.
- Push the limits (or don’t give into complacency). “No matter how hard we’ve done something, you want to do it better,” he said.
- We, not I. “We take greater pains than most companies to ensure everyone all over the company is working really well together, including the business side of the house with the engineers and product development folks,” he said. “We overinvest in food and the office space to force people to have more serendipitous interactions. … We frown on any activity where people take credit for something. We only want you to be successful as an individual because the company is successful.”
Those are the five major values; other less-major values include having fun, taking care of users, taking care of the team and building trust. Of course, those values could be altered, stretched or added to at any time. “It will be a living document,” Houston said, adding that Dropbox is in the process of revising this list even now.
When Foursquare partnered with GrubHub-Seamless this week, it was more than just a boon for lazy burrito lovers. It provided a useful illustration of what omnichannel is intended to be today, and it’s part of the lead story in this week’s Searchlight.
Back in the day (a few years ago), if you were alone in a strange city and wanted to know where people in your social network got good grub, Foursquare could help point you in the right direction. But with its new partnership, the customer experience is taking on a new dimension. You can reach your end goal — eating a burrito — without ever “leaving” your smartphone; when you find what you want based on others’ recommendations and your own location, you can have that burrito delivered straight to your door (that’s where GrubHub-Seamless comes in). It’s social, information rich, integrated and delivers (near) instant consumer gratification.
It fits in well with the “expanded” definition of omnichannel, which calls for satisfying all customers these days — not just the customers of a particular brand or restaurant. Seamlessly skip over to SearchCIO to get the full story as well as news of Google’s big AI acquisition, why the NSA loves Angry Birds and more.
Digitization makes information so easy to access and disseminate that it comes in waves and piles up like mountains — and the volume can make a day spent in proximity to a computing device, in other words just about every day, seem like a month’s worth of experience. It’s still January but already those 2014 resolutions seem so last year. That’s how fast time moves. I blame this digitalized time warp on you, CIOs. At least, you’d better be to blame, according to the latest CIO research advice.
“Digital disruption is about to tear down and rebuild every industry. The competitive context for corporate leadership teams has shifted,” writes Forrester Research analyst Nigel Fenwick in this month’s SearchCIO tip.
A former CIO at Reebok UK (in his tender 20’s), Fenwick specializes in the impact of technology on business. The old rules of corporate competition — the bigger and more optimized, the more likely to win — have given way, Fenwick writes. Gone, poof! The race now favors the lean and adaptable. And the winners will be those organizations propelled by “innovators who are disrupting every industry by delivering value-added services to digitally-savvy consumers.”
Fenwick believes this is a pivotal time for CIOs, presenting you the opportunity to take the limelight or be left in the shadows. He offers advice (partnering with the CMO is critical) and leadership examples from the likes of Delta Air Lines, Nissan Motor Co. and Nestle.
It’s not just Forrester sending out an SOS to CIOs. Consultancy Gartner Inc. casts digitization in an equally portentous light. In a new report, “Taming the Digital Dragon: The 2014 CIO Agenda,” the consultancy hails digitization as the “third era of enterprise IT.” It’s a dangerous era indeed, in which the very capabilities you acquired to thrive in the second era of IT (marked by back office efficiency) actually undermine your chances to prevail right now. If you’re like the 2,339 CIOs responding to Gartner’s annual CIO survey, this new “digital paradigm” for enterprise IT makes you anxious: over half (51%) are “concerned that the digital torrent is coming faster than they can cope.”
One of the reasons for this anxiety, Gartner believes, is that corporations “have a vacuum in digital leadership.” Yes, companies are hiring chief digital officers left and right, but therein is the problem. One person cannot be held responsible for digital business. The resources required to succeed in the digital era include all business leaders — the digital savviness of the CEO is apparently “one of the best indicators” of success, according to Gartner. And on the IT side it requires a “post-modern-ERP” mindset, leveraged by public and private clouds, and carried out by people who are good at digital design, data science, startup skills and agile development.
Of course, consultancies like Gartner and Forrester make their money by proclaiming vacuums and offering to fill them. But I’m ready to give them this: many companies do not have the organizational or IT structures in place yet to exploit this era of digital business. And CIOs do seem to be at a crossroads, poised to design and implement the systems for this era or be left behind. The good news is that the choice between the limelight and lights out appears to be up to you. Fill the vacuum!
In case anyone wasn’t aware by now, private and public entities are collecting our data. This tidbit of not-quite-news was included in President Obama’s address last week on NSA surveillance reform. If upon hearing this, you thought to yourself “Aaaand …?” it’s pretty likely you’re not alone. Well, this week brought an answer to that sarcastic question; it’s the subject of this week’s lead Searchlight item.
On Thursday, the White House announced the launch of a working group tasked with looking into potential privacy issues related to data collection by public and private entities. A shall we say, “interesting” proposition considering the source — not to mention an enormous undertaking. As the White House well knows, it’s called “big” data for a reason. It’s easy (and entirely understandable) to look at this proposition with a very cynical eye — but worth looking at nonetheless.
Also in Searchlight this week: Netflix talks tough about net neutrality, HP and BlackBerry have a lousy week, and more.