When is that digital transformation finally going to happen?


source Flickr via Eksley

In a post last week, I stated what I consider to be one of the undeniable facts about business today, that high performance now is based on modern work technologies:

Stowe Boyd, Startups know what giants don’t: work tech is core to high performance, now
Work in the highest performing companies, and by the highest performers in other companies, increasingly has web- and mobile-centric work tech at its core. High performance today is predicated on working socially in fluid, nimble, and self-organized networks, and these are sparked and sustained by social tools that allow high degrees of cooperation between highly autonomous individuals connected through software-enabled work graphs.
This stands in distinction to the immediate past, and the techniques used in less productive companies or less productive individuals in high performing companies. These individuals and organizations think of work tech as an adjunct to work, a nice-to-have but ultimately non-essential apparatus than only — at the best — speeds up other approaches to communication, coordination, and cooperation. They operate as if email and phones are really all that’s needed, and the rest is — at best — frosting on the cake.

The mismatch between this appreciation of the central role of digital technologies in the realization of today’s corporate imperatives is the key reason for the growing rift in the corporation between IT management and the CEO. As Laura Stuart relates in her fourth quarter Buyer’s Lens analysis and outlook, companies are striving to move ahead with new technologies — like the transition to cloud-based work technologies — and are held back by poor IT management:

  • For many companies, technology and technology management are the constraining factors in their corporations’ response to change and growth. As a result, other departments from marketing, HR, and finance to lines of business are getting more directly involved in technology acquisition and management, forming what has become known as shadow IT organizations. This dynamic itself is further advancing the move to the Software-as-a-Service (SaaS) delivery that makes such direct involvement feasible.
  • Organizations need more CEO, board-level, and line-of-business engagement to grasp technology-driven market change and set resultant corporate and technology strategies. A proliferation of titles and new formal roles are effectively creating a shadow CIO function to guide technology strategy at the same time that CIOs need to effectively become shadow chairmen, providing direction on technology’s impact on board-level issues.
  • Standards are still forming around integrated online and in-store marketing and services. With technology driving everything from high-visibility credit card and other customer privacy breaches to the constraint on an organization’s ability to respond to market changes, issues of both technology opportunity and risk must percolate to the board level. The inadequacy of formal board structures to address technology risk reflects how few organizations have come to terms with the new environment.

As Laura and other GigaOM analysts have pointed out, these issues — added to the fundamental disconnect that I mentioned at the outset, that high performance requires the adoption of advanced work tech — set the stage for what is likely to be a dizzying rethinking of IT management in 2014.
And the most obvious response is a refactoring of the role of IT in the business by rebooting the idea of the CIO. In the early 1900s, when electricity was a brand new technology, companies had VPs of Electricity. Just so, when computers and networks became available, companies went outside and hired a geek with an appropriate degree and a pocket protector, and made him (or her) CIO. Those days are past. We no longer see any VP of Electricity, and in a world where ‘computication’ is the bloodstream and nervous system of the business the premise of an IT department makes no sense. It’s like having a department of human language, or rational thought. These can’t be sequestered to a group a wizards in the basement, and neither can IT.
So, we are seeing the continued rise of the Chief Digital Officer (CDO), as I wrote about last year (see Leading digital (and social) change in the business). The stark truth is that CIOs have the wrong mindset to transform businesses to meet the challenges of today’s world, and it may be a mistake to imagine that they should. But is is clear that making the transition to a new way of operations is critical.
As I said in Overview of my Social Now talk: The Future Of Work In A Social World,

The arrival of social tools is one part of a larger, swirling mess of large-scale change smashing into our lives like a tornado, and tearing the roof off the world of business. The elements of that mess all influence each other — tech factors like digital, mobile, and the cloud, societal shifts like urbanization, new media, and the always-on lifestyle, and correspondingly massive stressors like climate change, globalism, the shifting social contract, and the boom/bust cycle of the world economy — these seem to be the new normal in the 21st century. The new normal is that there is no normal anymore. Welcome to the Postnormal.

And we need a CDO-style figure in most businesses — if not the CEO — to make that transition to a postnormal footing, where work technology is at the core of what everyone does, not an afterthought or add-on. The inability of traditional IT to deliver on the promise of today’s technology is the universal business facepalm of our day.