Ahead of her book launch, ‘Duty of Care: An Executive Guide for Corporate Boards in the Digital Era’, certified corporate director Alizabeth Calder is publishing a five-part blog series on IT World Canada examining 10 trends that will be shaping discussions in corporate boardrooms in 2020. Today is Part 1 of 5.
A trend is a movement; a shift in thinking or direction; a change in perspective. Blockchain is not a trend. AI is not a trend. Robotics is not a trend. When we talk about specific technology solutions as a trend, we enable the smooth-talking advisors who foster a “gotta’ get us some of that” mentality. We talk about trends so we can stay ahead, and take advantage of the shifts.
For example, the robotics conversation is shifting from replacing real employment to optimizing our human capital at scale. Process integration will deliver measured and managed best-practice operations, instead of just tactical outsourcing for the sake of cost reduction. Blockchain will move from being a proxy for cryptocurrency to being recognized as an enabler of privacy through true data ownership. The trend in cyber security is a shift toward strong accountability models, with risk decisions actually being made by those with the oversight obligation to stakeholders. Data security will continue to be center-stage, but boards and CEOs will no longer be able to rely on a “trusting the security people to get it right” defense.
The key trends that will be impactful going into the next decade are not about technology – they are about what will be different for business.
Strategy – the move to outcome-driven
An important digital strategy trend is the move from looking for ‘transformation’ to thinking about outcomes. The challenge will be to innovate with purpose.
According to Forrester, 60 per cent of executives think they are behind on the innovation curve. Research with CIOs suggests that transformation is now part of the core systems program, and CIOs are directly leading the transformation work, so we need to lead in an outcome-based model.
Other interesting trends, according to Deloitte, include:
- More business leaders are taking IT roles – 21.8 per cent of CIOs are not from a tech background, up from nine per cent in 2013
- More IT leaders are moving into business roles – 84 per cent of top performing companies have their CIO responsible for more than just traditional IT, with roles going from controlling cost and engineering processes to driving revenue and exploiting data
- There is better alignment between CIOs and the business – CIO tenure is on the rise – 2018 is 6.67 years; 2014 was 5.44; in the late ’90s, it was under two years
The same research also suggests that about half of CIOs now report to the CEO. There is no longer an intermediary to translate. To be understood, CIOs need to use the terms of the business and even the most technology-oriented transformations need to be presented in the business narrative.
That doesn’t mean we have moved past the dilemma of the CEO being distracted by some new technology – don’t confuse being trendy with an industry trend. With so many trendy options, the CIO’s job is to ensure that their executives don’t get inappropriately sold on something because lack context. We need to be proactive in identifying what is important. The trend toward “outcomes” will help ensure that your business doesn’t get caught up just because something is trendy.
Growth – Recognizing and leveraging the new adjacency opportunity
According to Gartner, 26 per cent of CIOs cite growth as their top priority. Some IT leaders express concern that they can not directly influence growth, so having growth targets will diffuse the focus for the team. Where the trend is toward making growth a multiplier, rather than a distraction, the strategic opportunity is to focus on adjacencies.
Consider recent examples:
- Agriculture companies offering insurance
- France’s LaPoste delivering elder care – visits while on routes; product delivery
- CVS / Aetna – pharma & insurance, linked to in-store clinics
- A healthcare provider developing a device that talks to the car – the car can take over in the event of a health-related problem
- Medical diagnostic clinics with scale and automation moving into hospitals to replace high fixed costs with a utility-based model
To get ahead of this important trend, find the leverage in adjacent opportunities enabled by cloud, outsourcing and supply chain partnerships:
- Use a cloud service provider or supply chain partner to deliver AI and automation that might otherwise be outside your reach
- Use a cloud service provider, outsourcer or supply chain partner to raise the bar your oversight and governance
- Look for strategic speed to market, to enable data mobility and extend your business reach
The diagram below demonstrates an adjacency-based model based on a book called Profit from the Core by Chris Zook. By looking at adjacencies, technology leaders can push the organizational thinking to find new opportunities for growth.
An adjacency based model
Embrace the growth mandate as a trend that will improve your profile and deliver significant opportunities to be seen as a leader in the business.