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New technologies continue to vex top management, according to a new study from the CIO Executive Council. The study, “The Future-State C-Suite: A Leadership Framework for Business Transformation in the Digital Environment,” finds that traditional siloed management structures impede business’s ability to get things done in the digital era. Only 14% of respondents in a mix of CIOs and other C-level executives said that they were highly satisfied with the performance of what the CIO Executive Council calls the C-Suite for shaping digital strategy and making digital decisions. Almost half [45%] said they were somewhat or highly dissatisfied.
The CIO Forum identifies the main issue as one of governance: it found that “nearly as many C-level officers make their digital decisions in silos as make them collaboratively.” That leads to a situation where digital decision making “lacks clarity” and vision.
To overcome this, the Council has put forth the idea of a Future-State C-Suite — a management framework that demands all members of the C-Suite have some ownership over digital strategy and collaborate on implementing it.
The framework matters because of the pace of technological change, says Mitch Golub, CEO of Cars.com and a participant in the study. Golub said that even as an established digital company, Cars.com is finding that both its business and technology models are “not fully developed.”
“As a business, we are having so many first-time challenges and new business initiatives thrown at us on a regular basis,” he said. “There’s not a lot of places to turn to in the market for expertise, not a lot of models where you can say ‘oh, they’re doing this.’”
Golub said Cars.com replaced five senior executives in the past two years, because they were not able or willing to keep pace with business needs brought about by technological change.
The CIO Council recommended in its report that companies establish a “digital pathfinder” role, setting up an executive, most likely the CIO or CTO, as the person who helps guide the company’s executives as new technologies come into play.
Golub said Cars.com has instituted such a program, where its CIO and CTO worked to help executives in other functions understand trends in technology and how to adapt them to their parts of the business. It was also investing in training for top executives, as well as sending them to conferences “to bring them into the 21st century,” he said.
His CIO and senior vice president of product is William Swislow, who noted that the company discussed naming a Chief Digital Officer and has so far decided against it. In part, it fears that naming a CDO would mean the rest of the executive team doesn’t stay fully engaged with technology, he said.
Another participant in the study was Ron Guerrier, the CIO at Toyota Financial Services in Torrance, California. The C-Suite framework helps, he said, because it improves communications. “It allows me to have a conversation with my business peers that is… not me, the propeller-head, talking about the database stack, [but instead] talking about the business value of digital.”
He also described how the framework helped create ways for Toyota Financial to think about what it could learn from companies like Zappos, which on their surface look far removed from Toyota’s operations. That’s given him room to spark conversations about things like how to use social media tools and in what contexts, he said, reflecting a more collaborative environment.
The principles behind the framework should improve communications, said another study participant, Timothy C. McCabe, senior vice president and CIO at Delphi Automotive PLC. Though based in Gillingham, UK, Delphi has 126 operations in 32 countries. To help bridge those operations, McCabe pointed out that Delphi had independently been moving towards something like the C-Suite Framework. The company is using tools like Yammer and Microsoft’s Lync video conferencing software to improve collaboration for its corporate leadership.
“You can deploy the technology, but you won’t get the value out of it if you’re not getting the business outcome. For that, you have to have a group of leaders that act as a team,” McCabe argued.
The study was based on a survey conducted in January and February of 2014. It had 409 respondents, with 59% being members of the C-suite and the rest senior managers who reported into C-level titles. The executives came from a range of companies, but 42% were from companies with more than $1 billion in annual revenues.