Business leaders call on CIOs to drive digital education
In today’s hyper-connected, IT-enabled economy, strong digital leadership has a direct impact on profit margins and revenue growth. But most companies lack the knowledge and skills needed to bring success to the digital areas of their business, according to a new survey of 436 business leaders by Harvard Business Review Analytic Services. This gap in digital acumen must be countered by a wave of digital education that reaches right across the business, say the authors — and CIOs are best-placed to drive higher levels of digital understanding.
The report, Driving Digital Transformation: New Skills for Leaders; New Role for the CIO, explores whether business leaders have the expertise to transform their organizations for today’s digital economy, and reveals a worrying gap in the knowledge required to drive digital transformation. Indeed, less than half of the business executives surveyed felt they personally possessed the technology know-how to succeed. And among CEOs, while most were found to understand the opportunities and threats posed in an age of digital business, many said they have yet to translate this into a vision for the company, let alone a strategy to execute that vision.
CIOs as digital mentors
According to the report, commissioned by open source software provider Red Hat, companies that excel in digital leadership are significantly more likely to have experienced revenue growth of 10% or more over the past two years. While these businesses are not uniform in terms of size or budget, the good news for IT leaders is that they tend to share another characteristic: a CIO in a highly strategic, visible and collaborative position within the company.
The report recognizes in particular a group of business-minded CIOs it labels ‘Enterprisers’ – IT leaders who work at digitally savvy companies and who are most likely to mentor their fellow business leaders on digital knowledge. These CIOs see the digital education of their C-suite peers and the wider business as an intrinsic part of their role to lead innovation. That points to a fundamental change in IT’s mission: only 21% of respondents see IT’s most valuable input as leading and implementing technology projects; 48% believe its most important contribution for the next three years should be driving business innovation through IT.
The findings do not suggest all business leaders need to become IT experts, but that they should understand the opportunities fast-evolving digital technologies offer and know how they might be applied. As one CIO from a large media company told the Harvard Business Review research team: “My business partners need to be great consumers of technology — curious, aware, engaged and willing to experiment in their own lives so they come armed with great ideas.”
Companies with a business model grounded in digital naturally tend to see a greater blending of roles among the leadership team, with digital skills more evenly distributed and not contained within an IT silo. In the case of an online financial services company, says its CTO, “it’s hard to look at our teams and know where IT ends and marketing begins; the CTO and CMO [roles] bleed into each other.” But again, this doesn’t mean the CMO is doing the CTO’s job. Rather, the CMO fully understands the value of data and the opportunities offered by analytics, and can apply the tools provided by the CTO, observe the authors. This reinforces enablement as a key facet of the IT team’s role, and as more digitally savvy employees graduate to leadership roles in the coming years, the relationship between IT and the other business leaders will continue to evolve in line with the technologies they respectively supply and apply.
Chief education officer
The Red Hat report also indicates that business leaders want their CIOs to go beyond digital enablement to active education. While IT training and development might have traditionally been the remit of HR or a dedicated team, the business-changing nature of digital makes that different. And there’s an expectation that CIOs should take the initiative – 46% of the survey’s respondents said they would like to learn more about digital trends directly from their CIO. However, close to two-fifths said that, currently, their CIO doesn’t seek to educate and empower other business leaders with digital knowledge.
Almost half of those surveyed agreed that the biggest barrier here is the lack of an appropriate forum in which this can take place, while more than a third said their IT leaders are simply too busy to be available to pass on this knowledge. The CIO’s role in digital leadership must therefore include the creation of opportunities for knowledge sharing throughout the business, the report’s authors conclude.
Insights from the report will support CIOs who are seeking to make a business case for increased digital learning throughout the organization, and offers the following advice:
• Analytics is a great place to start your digital education efforts. 73% of respondents rated analytics as extremely important to their area of the business, but only a fifth rated their own knowledge and skills in this area highly.
• Either infuse digital into existing leadership committees or create a dedicated digital advisory board made up of both internal and external experts to guide the company’s digital vision.
• Embed IT staff in the lines of business so that digital learning happens on the job, not just in dedicated meetings or training sessions.
• As with all IT/business engagement, establish a common lexicon to increase understanding and communicate in language that speaks in business activities and outcomes, not to IT projects.
• Partner closely with key business leaders to identify which digital knowledge and skills need to reside in the lines of business and which should remain in IT.
• Work with the training and development organization to establish both formal and informal learning forums, including bringing in external experts.
As the report concludes: “Understanding new technology capabilities is no longer the exclusive purview of the IT organization. Leaders across the business must learn about and stay abreast of digital trends, the implications of those trends for their business, and how to leverage the new technologies. CIOs have a central role to play here — and business leaders want their help to better understand digital trends. This starts with being the voice of digital innovation — evangelizing what’s possible and what business leaders' peers in other organizations are doing. The bottom line: CIOs should lead.”
• Download the full report from HBR