VUCA is an acronym – first used in 1987, drawing on the leadership theories of Warren Bennis and Burt Nanus – to describe the volatility, uncertainty, complexity and ambiguity of conditions and situations. COVID-19 has abruptly brought new light to that famed acronym. For IT leaders, the crisis has demonstrated the importance of digital readiness and business agility. Building the necessary infrastructure to support customer expectations in a digitized world, stay current in the latest technology, and react to change at unprecedented speed will be essential for any business to remain competitive in a post-COVID-19 world.
With the path to agility often running directly through IT, the CIO stands front and center in an organization’s transition to enterprise-wide agility.
Digital transformation can help carve the path to agility in two important ways. First, it can create greater unity between IT and business units — as well as between the CIO and executives who lead these departments. By partnering with other executives to successfully achieve alignment, IT can more directly deliver results to business goals and objectives. As a result, this helps the company gain critical market advantages and exponentially grows the value of the CIO in the process.
Second, helping the enterprise effectively navigate in today’s VUCA conditions contributes dividends to the broader organizational value chain. Digital transformation can help the CIO create business results like reduced project risk and costs, increased software quality and predictability, and, ultimately, faster delivery of products and services to market.
Elements For Success
An agile organization requires both an agile culture and agile technology automation that supports business goals, striking a balance between stability and flexibility. CIOs may operate in a market where they have fallen behind, or they may simply seek to navigate changes happening today. In either case, they need a platform that can quickly adapt to future market forces.
Let’s examine these two elements and how CIOs can embrace them, leading by example:
Agile culture: McKinsey found in a recent survey that, “The greatest enablers of — or barriers to — a successful agile transformation are leadership and culture.” Seventy-six percent of executives McKinsey surveyed found that transforming the culture was their No. 1 challenge during an agile transformation.
CIOs play an incredibly important leadership role here, setting the right tone from the start. And culture change is becoming an even more important requirement to achieve digital transformation. Gartner predicts that by 2021, CIOs will be as responsible for culture change as chief HR officers.
Building agile teams is a building block. CIOs should look to create a cross-departmental team with individuals who exhibit traits like cooperation, humility, openness and self-motivation. The team should be empowered to create value for customers (both internal and external) in tight alignment with the business goals. The team should hold frequent reviews with emphasis given to measurable outputs that illustrate business (vs. technical) value.
Agile IT Platform: As noted earlier, the path to greater agility often begins with digitization projects. A technology platform to support these efforts, and that can expand to address still ambiguous future needs, can be a critical tool for helping IT engage with and improve the business. (It’s worth noting here that a lack of such a platform can hinder business agility, cause shadow IT and undermine an agile culture, which can prevent a company from becoming an agile enterprise.)
The CIO must be holistically engaged when it comes to building an Agile IT Platform due to the strategic importance of IT automation in supporting the agile enterprise. For it is through automation that the team will replace the significant overhead caused by manual jobs with time to spend on strategic, business-impacting work. While automation can be applied in many different forms, CIOs should ultimately look to build an agile IT platform that delivers business values such as bringing products to market faster; growing governance, security and compliance; powering better customer experiences and making it simpler to explore greenfield opportunities.
For example, I recently spoke with a CIO at a large insurance company. While consumers and shareholders alike view it as an industry leader, the CIO readily sees that it needs to make a digital transition, given forces in the market. The company’s business model makes heavy use of insurance agents to quote and sell coverage. In this model, it takes about a week to sign a new contract. Yet consumers are increasingly moving online to get insurance quotes and even to sign up for coverage — all without the help of a single agent. The CIO knows he needs to digitize and adapt to changing customer behavior, as well as competitors who are digitizing their efforts. The CIO’s leadership in driving digital transformation, and an evolution toward an agile enterprise, is giving the business an avenue to recover lost ground and expand their future competitiveness.
Agile change most often starts with digital transformation, which directly implicates the CIO in a company’s successful transition to an agile enterprise. This hyper-critical role in ensuring agile success may be the biggest career opportunity many CIOs have seen. By aligning IT agility with business goals, leading by example, and setting the right technical stage, CIOs can help their companies effectively navigate the pace of market change, driving unparalleled responsiveness through an agile IT culture and flexible IT platform.