March of this year saw the quiet 25th anniversary of an important event.
In March 1989 Tim Berners-Lee, inventor of the web (the system that enables computers to create, publish, and display content on the internet), submitted his first proposal for one of the 20th century’s most far-reaching innovations. His boss replied, “vague but exciting.”
It’s remarkable how quickly these developments have taken root. What was an arcane research project in the early 1990s is now used by nearly half the world’s population.
The internet and the digital technology it enables have spawned many opportunities for businesses to create competitive advantage. The rapid rise in the importance of both to the world’s companies has seen the growth of the corporate IT function and the role of the CIO, as companies suddenly needed more experts who could help their employees get the most from digital technology.
The Changing Role of the CIO
Digitization still presents huge opportunities for businesses to create and market new products (and enhance existing ones), increase their employees’ productivity, and make their “value chains” more efficient, but the role of the CIO and his or her team in helping with that is changing dramatically.
In the past, business leaders needed a lot of help and encouragement to exploit technology. Now, business leaders’ level of comfort with technology and the extent to which it has suffused every part of day-to-day business life means they are better placed than IT professionals to determine how technology should be used to achieve the company’s objectives. Another consequence is that the IT function does not have the scale or scope to be involved in all technology decisions without becoming a bottleneck (this recent post covers the trend in more depth).
This doesn’t mean that IT’s fundamental role has changed: it was, and will continue to be, to help the enterprise get as much value as possible from technology. But it does mean that it is now an essential leadership competency for all managers to be able to get the most from the technology and information at their disposal, and has changed how IT interacts with the rest of the company.
Adaptive IT and Four Principles
To be successful in an environment where business leaders have a greater role in technology decision making, IT teams must be able to rapidly reallocate resources as new opportunities emerge, switch between a range of models for developing and acquiring technology, and become more flexible in how they engage with other stakeholders. CEB CIO has coined this response “Adaptive IT.”
Adaptive IT organizations will continuously change and so thrive in any work environment, not just those for which they were designed. Instead of relying on dedicated teams, structures, or processes to address specific situations, Adaptive IT organizations make all resources (e.g., people, money, technology) and processes as interchangeable as possible.
Four principles distinguish adaptive IT teams from the rest.
Apply a disproportionate focus: They disproportionately focus their efforts in areas where they provide a distinctive advantage and dare to be only adequate elsewhere.
Maximizing this intentional imbalance requires knowing your sources of comparative advantage and ruthlessly investing in them, while making the tough trade-off decisions to defund other opportunities.
Vary the role they play: Adaptive IT teams organize their responsibilities based on where ideas and money come from (and on other contextual factors).
Corporate IT will neither source nor fund all ideas, so IT will need to adapt its role in digitization initiatives to the context of the opportunity.
Use more judgment and less process: Adaptive IT organizations recognize that process discipline must serve business outcomes, and they use judgment to determine the appropriate level of rigor.
IT leaders don’t aspire to be the “process police” but the rest of the organization sometimes views them that way. “More judgment and less process” should be Adaptive IT’s watch-words.
Make principled trade-offs: Adaptive IT organizations continue to drive efficiency while making principled trade-offs for the sake of speed.
Given the test-and-learn nature of digitization, speed is a priority. You cannot, and should not, abandon efficiency, but IT leaders must favor speed, looking to break the compromise between cost and speed wherever and whenever possible.
Read more about CEB CIO’s work on Adaptive IT to understand how leading teams reallocate resources in response to rapidly changing business needs.