Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn‘t matter whether you are a lion or a gazelle — when the sun comes up, you‘d better be running.
Many CIOs and their organizations, lacking not only the harsh tooth-and-claw reality of nature but also a real IT strategy, never really wake up. Sixty-one percent of the IT organizations in the Global 2000 are sleepwalking their way to middle-of-the-pack/it’s-good-enough performance levels. This shocking data point (which first surfaced during research I conducted for the U.S. Navy and was validated by work done in support of my book The New Know) leads me to conclude that many CIOs need a “strategy for strategy.” They need to think hard about how they determine what IT should do next.
The ‘days of average’ are over
I recently polled over 200 CIOs at mid-market enterprises asking them to describe their organization’s IT strategy. Their self-assessments broke down like this:
- Brilliant strategy, successful execution 9.4%
- Great strategy, average execution 26.4%
- Average `strategy, excellent execution 33.4%
- Average strategy, average execution 16.4%
- What strategy? 14.4%
I asked this same group, “How would your board of directors rate your IT shop?” Their responses:
- Better than the best (anywhere) 1%
- Better than the best (In our industry) 36%
- Pretty good 49%
- A bit behind 10%
- A source of competitive disadvantage 4%
I recently spoke to Gary Beach about the state of IT strategy making. Beach, the author of The U.S. Technology Skills Gap: What Every Technology Executive Must Know to Save America’s Future, the publisher emeritus for CIO magazine and a tribal elder of the IDG brain trust, reminded me that for 15 years IDG has conducted the State of the CIO Survey. For the last five years, researchers have asked CIOs this question: “How are you perceived by the C-suite in your company?” CIOs are given five answers to choose from: cost center, service provider, trusted partner, collaborator and business game changer. 2014 is the first year that business game changer broke into double digits, at 10%.
If most C-level colleagues don’t see IT as a business game changer, it could be because most CIOs see IT strategic planning as a matter of translating what the business decides about where it’s going. They wait to be told what the business plans to do next year and then figure out what that means in the way of new applications, support costs, manpower and projects. I know of a CIO at a major financial institution who once told his direct reports, “If the business wanted that, I am sure they would have asked for it.” But CIOs who see IT as a game changer think that a strategy devised by IT can actually create new endpoints.
Gartner fellow Bruce Rogow’s observations indicate that, in many organizations, IT strategic planning has been downsized — not just in time and resources invested but also in the nature of the questions it seeks to ask and answer. Every year, Rogow undertakes what he calls the Odyssey, visiting some 120 CIOs. The data he has collected during the Odyssey indicates that, in the past two years, less than 10% of the IT executives interviewed have really thought about what IT needs to do next. Those few have actually commissioned a real, new IT strategy, gone off site with their people, and then taken six months to work both top-down and bottom-up. The rest, Rogow says, are doing Whack-a-Mole. Though nearly all modern enterprises are well managed, a sadly large proportion lack a real IT strategy. That equates to going nowhere with great efficiency.
But what constitutes a real IT strategy? Roger Martin, author (with A.G. Lafley at P&G) of Playing to Win: How Strategy Really Works, thinks of strategy as the intersection of two critical dimensions: where you will play, and how you will win there. Strategy above all is about choosing to do some things and not others.
Regrettably, far too few IT organizations that think of strategy at all are pondering Strategy, with a big “S.” Big “S” Strategy asks questions like “What do we want to be?” and “How do we create competitive advantage?” Most IT strategy now focuses on little “S” questions such as “How do we do what we are currently doing cheaper, better, faster?”
This strikes me as remarkable. For years, IT has been deeply involved in the evolution of analytics, business intelligence and big data, and at this point just about every executive working in a modern, complex and global enterprise knows that there is value in information. IT are better positioned than most to see this and should recognize that their organizations can make invaluable strategic contributions.
In subsequent posts I will share insights from enterprises whose IT strategy delivers real value.
Futurist Thornton A. May is a speaker, educator and adviser and the author of The New Know: Innovation Powered by Analytics. Visit his website at thorntonamay.com, and contact him at firstname.lastname@example.org.