How IT leaders can drive digital innovation

1. Understand business requirements.

As CEOs increasingly rely on technology to develop new products and services and stay ahead of the competition, IT and business alignment has never been more important.

“There has been a recognition across all companies and almost all industries that technology is a powertrain,” said James McGlennon, CIO of Liberty Mutual Insurance Group, a global insurer headquartered in Boston. “[But] You have to focus on the business process.”

Companies’ reliance on technology has pushed many IT leaders out of the back office and into the spotlight.

Marina Bellini

The number of items on a CEO’s agenda that come directly from the CIO or CDO has increased dramatically, said Marina Bellini, former chief information and digital officer at British American Tobacco, a multinational tobacco and nicotine company headquartered in London.

While conversations between the CEO and senior IT leadership used to focus on cost savings, today IT leaders are driving conversations about innovation, revenue growth and new business models, Bellini said.

Today’s IT leaders must be able to identify business problems and understand how to solve them, and they must understand how to communicate in a language that business teams can understand.

“This close relationship between the CEO and the CIO, CDO, CIDO, or whatever the role is called in that particular organization requires IT leaders to communicate in new ways – especially in ways that can be translated to external stakeholders said Bellini.

2. View IT’s digital leadership role holistically.

Today, IT leaders are likely to perform multiple roles—and they need to be able to perform them simultaneously.

George Corbin

“The biggest change is this [the IT digital leader] is now the company’s top transformer,” said George Corbin, executive director of Edgewell Personal Care and COO of Onriva, an AI-powered travel marketplace. “You have to be the helmsman of the ship and at the same time the ship’s engineer.”

According to Corbin, CIOs and CDOs need to change three architectures to drive digital transformation and innovation:

• Technology and data architecturewhich includes the areas traditionally associated with IT, such as: B. Infrastructure and data;
• Business model architecture, such as product, sales and go-to-market strategy; And
• human architectureB. the culture of a company and the way people are organized.

“Ultimately it is [CIO and CDO] “Job is a transformational job, but the problem is that 70% of transformations fail,” Corbin said. “And that failure is usually not due to technology.”

Other factors – particularly human ones – influence the success of the technology.

3. Make change management your superpower.

The success of any technology project depends on people, with all their messy emotions, resistance and self-interest. The human side of the equation is even more important in digital transformations and innovations. That’s why it must be on the priority list for IT leaders to improve their own soft skills, lead with empathy and awaken people’s interests in new ways of working.

A common cause of IT project failure is a lack of approval, said Bellini. Getting people to invest emotionally – and recognizing that this requires a time investment – ​​can help avoid technology project failure and the blame that comes with it when people feel like change is being forced on them.

“You need [steer] the emotions to the right side,” said Bellini.

People have different views on what an “improvement” is.

“Even if it’s the biggest project … you have to take a step back and look at who’s going to lose something,” George said. “This is the soft side of the equation that is important to address because it can undermine even the most brilliant technology initiatives.”

4. Create a culture of agility.

Innovation does not happen in a vacuum. Leaders must create a culture that supports and encourages them. This can mean radically changing the status quo and leading teams differently.

Traditionally, organizational leaders outside of IT have understood that not every initiative will be a success — for example, not every new product will meet minimum requirements, Bellini said. For IT to deliver innovation, the organization must provide the same understanding to the technology group. In turn, digital leaders must advance this mindset.

“We need to be much more experimental than traditional IT organizations,” Marina said.

In this new era, where CEOs are asking CIOs and CDOs to develop new products, innovate operating models and provide digital leadership, IT leaders must embrace a culture that views failure as a necessary byproduct of agility.

“Fear kills innovation,” Corbin said.

Replacing fear with fearlessness means changing the culture, he said. Supporting innovation requires rethinking everything from the company’s reward system to the people it recruits and retains, and that can require some difficult decisions.

To advance digital leadership, risks must be viewed as part of innovation.

Liberty Mutual focuses on how it can empower its employees to take risks, including ensuring that leaders Don’t penalize employees if these risks don’t produce results. McGlennon said.

To create a culture that rewards experimentation and accepts the risks involved, leaders must set values ​​and then get out of the way, he said.

Done is better than perfect. Perfect never starts.

Focusing on failing quickly can help with this learning process.

At Onriva, the culture emphasizes an understanding of each individual’s role in a project, such as a RACI matrix, laser focus on goals and getting answers quickly during two-week sprints, Corbin said. This is in stark contrast to traditional organizations that get stuck in processes and point to the idea of ​​“perfect.”

“Done is better than perfect,” he said. “Perfect never starts.”

5. Focus on scalability and repeatability.

A key way for IT leaders to drive digital innovation is to ask themselves which technology initiatives can drive core business growth.

Liberty Mutual operates in multiple markets, in different countries and through different channels, but one goal that unifies those efforts is a focus on repeatability, McGlennon said.

“We [focus on] “Figuring out how to optimize, build something once and ideally use it everywhere,” McGlennon said. “This is becoming more important than ever… [and] takes you directly to things like API enablement and makes it easy to plug into other ecosystems and get people to plug into your ecosystem.”

For example, the company offers insurance to gig workerswhich uses many of the same processes and technologies that it has already developed.

“CIOs need to focus on what operating model you have, what partners you want to engage with, how they are trying to engage with you, and then make sure you reuse as much as possible.” [to create an] evergreen business,” McGlennon said.

6. Understand the technical requirements and business use cases of data

Data is critical to the success of digital cultures, and mastering the technical and business aspects of data is no easy task. At this point, the company should establish a specific role for data responsibility or Hire a Chief Data Officer.

Many companies have data sets that go back many years, and preparing that data is not an easy task, McGlennon said.

“We spend as much or more time preparing data for use in things like data science and machine learning models than we do on the actual modeling work itself,” McGlennon said. “That’s why it’s really important to have someone focused on the entire data value chain.”

Data can help open up new business areas, so a comprehensive view of the entire data value chain is crucial. But creating a data-driven culture across the company is also important.

The most pressing data problem is how to quickly build information as a company. For example, marketing teams should look for critical points where the company is losing customers, Corbin said. People should look at these friction points and address them, otherwise the company risks being disrupted by a competitor who finds a way to address the problems.

This point underscores why IT leaders need to focus on how to drive digital innovation and explore new opportunities, from AI to metaverse initiatives. If they don’t focus on finding new ways to delight customers, someone else will.