CIOs in the Innovation Age – Reinvent Yourselves or Fail
CIOs today face a daunting challenge. The vast majority of them are failing to be leaders in technological innovation within their companies. For years, analysts have warned of the CIO’s coming demise.
Gartner claims that within five years marketing departments will outspend technology departments on information technology. According to a 2012 survey of technology leaders in nearly 500 corporations, 79% of technology spending was made outside of the IT organization in 2012, up from 69% in 2006 and just 34% in 2000. Forrester’s research is littered with warnings urging CIOs to reinvent themselves.
Simultaneously, the amount of information available for consumption and analysis is exploding. An incredible 90% of the data in the world has been generated in the last two years.
Cloud computing and big data technologies help manage and make sense of this data, but many IT organizations are already tapped out. They spend their days frantically working to catch up in the areas of enterprise mobility and social media.
The need for strong information technology leadership has never been more acute. So where is all of this talk about the demise of the CIO coming from? They are Chief Information Officers, aren’t they? Yes, but the Information Age as we knew it is over.
During the Information Age, CIOs scrambled to manage and make sense of information. Information was used to make informed decisions, optimize costs, and automate processes. It was largely a back office asset, it never touched the customer. IT in this sense has been commoditized - it is no longer a differentiator.
The new Innovation Age is all about creating and monetizing information. Sensors that continuously collect real-time information are embedded in countless new devices. Insights and information are being delivered to the palm of the consumer’s hand. Information is being used to improve our daily lives and to develop brand-new business models that deliver the information people want, when they want it.
Just think about some of the most innovative products on the market today.
Automatic has developed a small device, called Link, which collects real-time information from your automobile. Through the analysis of this data, Automatic is able to help you save on fuel costs, predict maintenance issues before they occur and alert others when you are in an accident. Automatic knows more about your car than your mechanic does.
Nike, named Fast Company’s most innovative company for 2013, is no longer just an apparel manufacturer. They are in the information services business. The Nike+ Fuelband collects physiological information and provides insights into your health and well-being. Your Fuelband device knows more about your health than your doctor does.
In the Innovation Age, your software is your brand. Information is deployed through software products, and in most cases this software interacts far more frequently with your customers than any other aspect of your organization.
The Innovation Age requires a different mindset. The IT mindset has been replaced with a product mindset. The product mindset prioritizes marketshare, user adoption, and revenue generation over project budgets, timelines, and scope. The product mindset embraces the reality that innovation is never “done” – it’s continuous.
The CIO of the future builds a sustainable innovation engine that produces breakthrough ideas, disciplined innovation and rapid iteration. That’s what it takes to be a Chief Innovation Officer.
Next week I’ll be giving a presentation at the Midmarket CIO Forum in Tucson, Arizona. If you’re attending, I hope we meet there.