Author: Bill Weeks, SVP and CIO at SquareTwo Financial
Part 2 of Bill’s series on Digital Transformation for Businesses. You can see Part 1 here.
In my last post, I spoke about how companies need to transform their businesses from analog to digital, or be left in the dust. Leadership teams, especially CIOs, will need to evolve to ensure they keep up. CIOs must take the lead in helping their business peers understand how to capitalize on what value their business really provides by leveraging technology strategy to engage their customer base with new digital products and process.
As a CTO or CIO, your job is not just to deliver IT services, but also to deliver ideas, education and leadership. You must constantly ask yourself and your coworkers, “How do we do this better in today’s connected world?” Senior IT leaders in general need to understand that part of the job now is to be a digital innovator and quasi-futurist. By that, I mean you need to set aside some time to think about how the world around us is changing as a result of business and technology innovation, and how ultimately that change will affect you, your customers and your business.
I am a long standing member of the CIO executive council, and one of the ways I have learned to broaden my executive view is by getting together with my peers and talking about where our profession is headed, especially in the next 10-15 years, and what we can do to prepare.
The reality is, probably 60-70% of the IT leadership community doesn’t understand what the future holds for its profession. This is a problem because all companies are going to have to become technology savvy companies or fall behind. CEOs and executive teams who can’t rely on their technology leaders to work across the company and help envision – and ultimately deliver – continuous innovation will be forced to replace those leaders or seek advice from outside parties.
The CIO executive council breaks CIOs into three categories:
1. Functional CIO – Very focused on tech and traditional IT services. The business side tells them what the business needs and the functional CIO delivers. This traditional mindset is IT, not business focused.
2. Transformational CIO – IT is more integrated and engaged. This CIO is on the offense anticipating needs and helping business leaders understand where they need to go. They are aligning IT projects with business needs and transforming business process. However, the actual business direction and much of the technology investment is still driven primarily by the business executive(s).3. Business Strategist/Game-changer CIO – Focused on how to keep the business running today and make it better for the future. This CIO is monitoring and knowledgeable about not just their own industry but other industries as well. The CIO has a grasp of how the company stacks up against the competition and has a plan to leapfrog them. This CIO understands where the business needs to go, knowing that there might be some technology involved to get there, but thinks more about the opportunities for business growth and customer needs as a whole.
3. Business Strategist/Game-changer CIO – Focused on how to keep the business running today and make it better for the future. This CIO is monitoring and knowledgeable about not just their own industry but other industries as well. The CIO has a grasp of how the company stacks up against the competition and has the plan to leapfrog them. This CIO understands where the business needs to go, knowing that there might be some technology involved to get there, but thinks more about the opportunities for business growth and customer needs as a whole.
Just like all business executives, IT leaders have to earn their seat at the table and prove their value. Here are three ways to begin the digital transformation to become more of a strategist and less of a functional CIO.
IT leaders need to understand what the company does, who the company serves, and what their customer wants. Taking that a step further, you should be thinking about how you can create a better experience for that customer, and generate revenue while doing it.
Here is an example – my company SquareTwo Financial has made major transformations in the past few years due to changing financial regulations. Federal regulators increased the requirements for our bank partners, specifically requiring a higher level of rigor in their management of third party relationships, including companies to which they sell debt portfolios, like SquareTwo Financial. In essence, this made these financial institutions responsible for the quality of customer care throughout an account’s entire lifecycle, even if that account had been sold to someone else. This is like saying car dealers own the relationship for a car from the time they sell it to the time the car goes to the wrecking machine, regardless of who owns the actual vehicle, for how long or if any maintenance has been done. It’s tough, but this new regulation is in place to protect the consumer from bad actors in the industry. In order to meet these new regulatory changes, we had to completely transform how we service those portfolios and create new business processes and systems to enable the change, making it easier for our clients to meet their new requirements. As our model changed, our tech offerings had to change, too.
I recently spoke to a friend who just got off a cruise, and we discussed how the customer experience on her cruise could have been improved. Even though the cruise line is focused on the cruising industry, the company’s IT leadership should be taking a cross-industry view to improving its customer experience. Some examples we discussed: While on a cruise, I should be able to make reservations in a restaurant on the ship by taking out my iPhone and clicking on a time like I can with Open Table. She had to pick up the phone, dial the restaurant and wait five minutes for someone to answer. If I want room service, I should also be able to do it with my mobile device. If I want to go out and get a lounge chair and get some sun, I should be able to use an app that shows me where the empty lounge chairs are on the ship so I don’t have to spend an hour looking for one. Taking that idea further, if I want a drink, I should be able to use my phone to send my drink order and get it delivered to whatever chair I am in and charge it to my room. But here is the hard part: that cruise ship has to support two models – one for people who aren’t comfortable with technology and one for those whose first instinct is to utilize their device to find information. The best part is that by implementing these technologies they would benefit all passengers. Shorter lines for those who prefer to call the dining service and easier ordering for those who want to use their mobile devices.
CIOs and CTOs need to ask themselves, “How do I apply other industries’ models to mine?” You have to look outside your business and understand the world of technology. It’s ok to look at someone else’s IT and say, “That is cool and it’s going to make my business money,” and then go and apply it.
So you have a bunch of good ideas, now you have to come back inside the organization and work with others. You have to learn how to sell your ideas to the organization so they understand the potential improvements to the bottom line. You have to learn how to present your idea and ask for help to integrate that idea into the business, or allow others to veto or take a different view of the idea entirely. You are going to have a lot of great ideas that don’t pan out. Don’t give up! Find trusted partners in your business that can help you separate the good ideas from the great ideas. If I come up with a new way of doing something and present it to my team, there may be someone who thinks it won’t resonate with our customer, for example. I have to learn how to either table the idea or creatively bring the leadership team around to my way of thinking. Often, the team will help me mold the idea to better fit our business. There are two critical components here, trust and honesty. You have to trust your peers, and everybody has to be honest or candid about what they think about the ideas you are discussing. This doesn’t mean you will always agree, but you will be able to have a meaningful discussion. This is all learning to collaborate and get buy-in. Also, realize that the organization doesn’t have resources to act on all great ideas at once. Some technologies also need time to mature. You may have to put some of your ideas in a parking lot until the time is right and you have the ability to act.
There are certainly more steps than just these three to become the game-changing CIO. But any leader who takes these steps is going to be that much closer to earning his or her seat at the table, and really providing value to the company.