Are You as a CxO The Real Culprit?

Digital Impacts on Business

In a recent article in the Sloan Management Review, it was mentioned that 87% of executives think that Digital will affect their market place. Yet out of the 75% who thought that their enterprises are adequately prepared, only around 10% saw it as a potential threat to their business.

This is only one symptom of the many aspects of CxO behaviour which are affecting the success of organisations which want to adopt a digital business model. Overall, there is often a lack of realisation that the CxOs themselves are inadvertently sabotaging their organisations' efforts.

Executive Behaviour Can be a Problem

In many cases, in the same manner that many executives don't understand what it means to be a project sponsor, CxOs have failed to actually engage with the issue. They don't seem to think that they should spend the time to get involved in deep market analysis and identify real game changing opportunities. They just want to automate yesterday with some sexier technology.

Additionally, they don't get the need for acting as a joined up team or building a positive culture which supports experimentation and innovation. In fact, many executive teams don't seem to understand that innovation means doing something that no one else has done before, so there are bound to be a few issues along the way as a product team discovers what works and what does not.

David Snowdon provided a great framework with the Cynefin model to explain what is involved with emerging practice and chaotic conditions.

This is why the DAF (Digital Adoption Framework) places significant emphasis on cultural change as promoted in The Way of DAU. Culture is a known inhibitor to strategy implementation, as witnessed by the well known quote that Culture Eats Strategy for Breakfast. Culture change starts with the C-Suite and ripples down. So any CxO looking for digital success, should be asking whether he or she needs to reach out work with C-suite peers to build a better team. Otherwise, failure beckons.

Executives Need To Learn How to Promote Innovation

On another tack however, a research based article on innovation and executive behaviour published in the Harvard Business Review, outlines some personal behaviour characteristics of entrepreneurial CEOs and other top executives: 

• associating, 
• questioning, 
• observing, 
• experimenting, 
• networking.

Their observation was that CEOs in successfully innovative companies take more ownership of innovation, look outwards and provide leadership to the innovation process and get personally involved.

Should The CFO report to The CIO?

Is it Time that the CFO Reported to the CIO?

Attending an industry event the other week, I was struck by the comment that "CIOs were moving out from under the shadow of the CFO". The event was presenting the results of a recent global CIO opinion survey conducted by Harvey Nash and KPMG. Other questions had focused on who is responsible for Digital Strategy and it appears that Marketing is now giving this role up and starting to hand it back to the CIO.

Any reader who has worked in the finance industry will have long ago understood that "Money is Information", reversing the old adage that information is money. Basically, since almost all currencies moved off the gold standard, money has become nothing more than a promise or just life's brownie points. Its value only exists, because we chose to assign it value as it has no intrinsic value of its own. These days it consists of little more than data stored on some medium or being transmitted from point-to-point in transactions.

If this were the only issue then the CIO's claim might be considered a little tentative. However, in the modern digital economy, many industry pundits are quoting the statistic that "80% of an enterprise's value lies within its IPR". This IPR normally being stored and managed in the form of information (or sometimes knowledge embedded within IT systems and IT enabled processes). Given that digital businesses now appear to be outstripping traditional models in terms of growth, profitability and survival, it is a good time to review the relationship in many enterprises between CIOs and CFOs, and many are beginning to question it.

Personally, I am not sure that either should report to the other. CIOs should be there to help grow and sustain enterprise value. CFOs have traditionally been there to husband and protect money, ensuring sensible separation of duties. My experience has been that CFOs tend to come in 2 types: those who control (and tend not to be that imaginative about how to grow a business) and those who are entrepreneurial (and tend to be a bit too lax about controlling money). The former type is a bad fit for IT, the latter may be a good fit for IT, but can be bad for the overall financial health of the business. 

I do think however, that there are things that CIOs can learn from CFOs, in terms of the way in which budgetary control is shared within a business, but with the CFO providing the governance framework and control. CIOs should be doing something similar with information governance, so that information quality is managed appropriately.
CIOs can give back too. Increasingly CFOs are expected to provide Management Information services based on management accounting and BI. there's a lot which CIOs can advise on there with respect to techniques for fast delivery and ensuring that information integrity is maintained.
Its time for genuine partnership to help grow the business.