IOs, more than at any time in the past, are facing a series of enduring trends which require them to expand their traditional competencies. Technology is the main catalyst for business disruption.
Globalization is Integral to Almost Every Business
The need and opportunity for seamless global processes and technologies has never been greater as companies navigate new markets, cultures, products, laws, and regulations. IT must balance the need for efficient standardization with an ability to be nimble and meet local market needs.
• Volatility within most industries has become a constant. Market volatility and regulatory uncertainty persist, and competition, from large global companies to small nimble startups is fierce. It is vital that technology teams deliver continuously, enable an entrepreneurial spirit, and create a platform for fast failure.
• Technology continues to change and innovate at a staggering pace, providing opportunities for progressive companies to adopt new solutions that enable better client experiences, greater productivity, and stronger decision-making at significantly lower costs. Creatively adopting innovations has become a core competency for companies to win in this competitive, evolving world.
• Cyber threats have evolved from historically unorganized, simplistic, and highly manageable attacks to well-organized, sophisticated, and persistent threats. As the world continues to become more interconnected, it is imperative that we deliver secure technology at startup speed. It’s an “AND”, not an “OR” when it comes to fast and safe.
• The war for technical talent continues to rage. Becoming a “Best place to work” for top technical global talent is paramount to an IT organization’s success.
These forces are leading to an entirely new relationship between IT and business. Companies are thinking differently about the role of technology in delivering business value, and consequently CIOs are embarking on journeys to deliver that business value continuously. This journey requires much technical change-the implementation of Dev/Ops and technologies like cloud to speed and automate deployment, big data to improve decision-making. But that tends to be the easy stuff. In order to truly deliver business value at startup speed, we need to "fuse" together empowered teams from traditionally siloed organizations and focus them on solving problems and deliver business outcomes. Teams where disciplines disappear and full-stack teams emerge. Technology and process change is easy; cultural change is hard but necessary in order for organizations to adapt to a changing world.
The game is changing for IT leaders, but they can be successful by adopting a few new rules of engagement.
Champion Technology Acumen in the Business and Business Acumen in IT
Every executive needs to understand technology and its potential for their business, in addition to having the associated leadership skills. CIOs have a responsibility to help develop technology acumen in their business, and there are times when IT has to take the lead in adoption of technology to help the business envision the possibilities. It goes without saying that technology professionals must have solid technical skills and understanding, but IT also has to be passionate about the business and industry we are in, because when you combine those two competencies, you get fertile ground for innovation. Finally, adding in the right leadership competencies enables business and IT leaders to turn those innovative ideas into real value; in addition to influence, relationship management, collaboration, and communication, technology leaders must be able to foster an entrepreneurial spirit in our organizations.
Some strategies that have worked at Vanguard–rotating new technology hires through various areas to build their technical expertise and collaboration skills, sending high-potential technology leaders to work in business units or corporate strategy, and assistance with pursuing higher education. Some technology professionals at Vanguard even pursue CFA certifications to deepen their understanding of the business they work with. For those whose career path takes them up the management chain, understanding the business through various rotations or assignments builds knowledge and credibility. Ultimately, it makes them better technology leaders, since they have built a more holistic view of the world.
Learn from Startups
There are many lessons and concepts that we can take from startups and apply in large companies. It is about using continuous delivery to embrace the concepts of flexibility, “testing and learning”, and “failing fast and cheap”, and the accompanying technologies that enable that approach–cloud, modular applications, and scalable services. Build connections with the startup community, and study how the venture world makes its bets.
CIOs can develop a more entrepreneurial culture by letting employees take risks without fear of failing. It’s not about preventing failure, but understanding how to learn from failure. Find ways to let teams do more and experiment more. Set up sandbox environments where they can play with new tools. Developers are creative by nature but engineers by discipline; they will find ways to automate and streamline processes and develop tools to enhance productivity. Signal that you understand the value of their ideas. As an example, at Vanguard we sponsor a yearly IT “ideation” challenge in which employees pitch their ideas first to peers, then to the IT senior team. The winning ideas are sponsored and supported. Creative options like this help to encourage innovation and engage employees.
Stay Focused on the End Client
IT organizations often treat the business counterparts as their primary client. When developing solutions, we have to remember our primary clients are really our external clients (in Vanguard’s case, our investors). Adopting Agile and Lean principles and co-locating our business and technology teams has helped bridge the gaps that can exist between business and IT. It’s also important to bring client feedback directly into the software development life cycle. Once a feature is built, leverage data and analytics to validate the feature has achieved the intended outcome, or is making directional progress, and incorporate those learnings into the next features that we build. The implication for IT is that instead of losing visibility into software after it’s delivered to production, these teams continue to have insight into the production results and can take direct action on client input.
Don’t let legacy Slow you Down
Speed and agility have to coexist and thrive along with IT risk management and controls, instead of being treated as mutually exclusive. The regulatory environment for the financial industry is complex, often slowing adoption of new technologies. IT organizations feel burdened by legacy systems and governance processes not conducive to cloud or continuous delivery. Those problems can and should be overcome; automation of testing and controls not only adds speed but reduces the risk of manual errors. We have had success at chipping capabilities off of our monolithic applications to slowly reduce dependencies on legacy systems; refactoring certain pages into standalone web applications that use lightweight, client-side frameworks and reusable mid-tier services. These smaller applications allow our business to quickly iterate through new designs and experiments, and as they realize the value of this approach, they have responded with a push to invest into modernization efforts.
In a world where technology has become synonymous with strategy, and the time between idea and mass disruption is shorter than ever, the importance of technology organizations has never been greater. Along with that importance, comes accountability for IT to understand our business, learn from the innovative examples that surround us, and find ways to become nimble. This will enable our business to capture the most value from technology.