The following is a guest article Joshua Swartz, a New York-based principal in the Digital Transformation practice at global management consulting firm A.T. Kearney.
The battleground for acquiring and retaining technology leadership talent has become fiercer in recent years. All companies are becoming technology companies, and technology is a core competency for industry leaders.
Companies must compete for talent with high-tech giants like Google and Amazon, as well as a growing number of dynamic startup companies.
Tenure in technology leadership positions tends to be about four years on average, substantially lower than other executives in non-technical roles. Further, the cost of technology leadership talent acquisition is approximately $400,000 to $750,000, 15% higher than it was 10 years ago.
With steep (and rising) acquisition costs and a short tenure, companies must create an environment which allows technology leaders to hit the ground running, grow and thrive, and provides the freedom to do what they do best:
Partner with business leaders to shape corporate strategy and direction-setting
Strengthen collaboration and partnership with business stakeholders
Create new and innovative capabilities and ways of working
Reduce IT complexity and technology debt
Mistakes to avoid
Here are four frequent and recurring challenges that many new technology leaders face, which companies must address before introducing a new technology leader to the business.
1. Forcing technology leaders to 'stay in their technology lane'
Too many companies plan their strategy without the input and guidance of technology leaders.
Worse, business leaders often make technology decisions without any input or guidance from technology leaders.
Often, a sales leader will determine that the company needs a new CRM system — and name the preferred vendor without considering other solutions or implications to the technology landscape.
Technology is rapidly evolving, resulting in a ramp-up of market activities (e.g., new start-up entrants, M&A, divestitures) and ever-growing customer expectations (e.g., everyone expects an "Amazon-like" customer experience or a "Tesla-like" product experience).
Sustaining competitive advantage requires an obsessive focus on innovation, and companies are pedaling faster just to keep pace.
These are business challenges, not technology challenges. Technology leaders must be given a seat at the executive table and be part of strategic business planning and solution design.
Technology leaders can catalyze innovation and help business teams work faster, smarter and more collaboratively, leveraging digital tools and skills.
2. Taking on too much
Strong technology leaders are passionate about innovation and know how to strike a balance between investing in new capabilities and ensuring a company's basic technology-related functions.
However, if they are asked to do too much (too many projects, too many initiatives, etc.) they are put into a no-win position of either asking for budget increases or under-delivering (delayed product releases, poor quality delivery, over-budget, etc.).
This happens far too often where technology leaders are given objectives to launch new products (e.g., mobile or eCommerce tools) while at the same time managing the large portfolio of in-flight IT cost reduction projects.
To meet obligations, work must be prioritized and rationalized through a combination of reducing the portfolio of projects and increasing investment in technology resources. Technology leaders (and all leaders, for that matter) must be given the liberty to raise concerns and dissenting opinions without fear of negative consequence.
3. Ambiguous and unreasonable expectations
Employees generally respond to incentives, such as a sales leader who receives bonuses when sales exceed targets. With technology, objective-driven incentives typically are flawed in three ways:
Vaguely written with no measurable outcome (e.g., "improve product x")
Non-strategic and focused on activities rather than outcomes (e.g., "reduce application count")
Conflicting (e.g., two opposing targets: "reduce technology spend" and "increase technology R&D investment")
In addition, targets are reset too often, making it difficult or impossible for technology leaders to deliver against their objectives.
Objectives and key results, key performance indicators, and management by objectives are often used, but they must be designed to tie to measurable business outcomes (not activities).
Technology objectives should be tied to business outcomes and foster partnership and collaboration through joint accountability among several leaders and teams (e.g., technology and marketing are jointly accountable for reaching customer retention targets).
4. Politics and blame
A healthy amount of friction and debate, to push thinking and challenge each other to do better is normal for any management team. But if this activity devolves into silos, turf wars, and unproductive politics — it will undermine the team's work
When performance lags and executives lack root-cause understanding, the finger-pointing ensues. For example, marketing might blame customer service (operations) for high customer attrition, when in fact the attrition was due to above-market prices or poor product quality.
Further, technology is an area which is often thankless when it works well (no one sends a thank-you email to the CIO when systems are working fine), but is quickly and publicly blamed when outages or security breaches occur.
This is not an ideal environment in which to introduce a new technology leader. A better path forward is a shift in mindset and culture to embrace change, jointly own technology as a business priority, and respond as a united team.
The CIO should report directly to the CEO (instead of reporting to the CFO or COO), to ensure the right support, structure, and commitment across the executive team.
Getting it right
To avoid these pitfalls, companies must ensure that technology leaders are given the right support structure, freedom to challenge conventional thinking, and shared accountability with other leaders, with measurable outcomes.
Highly successful technology leaders are given regular access to senior executives, the CEO, or even select board members to test thinking, review progress and share concerns.
Technology leaders should be viewed as leaders with technology expertise and given a seat at executive discussions about strategy, transformation, finance and other topics that may not on the surface appear to be technology topics, but depend on technology for success.
They should be invited to help inform business decisions and steer the company in a manner that appropriately leverages technology to gain competitive advantage.