This week we hosted our latest CIO Insight Call, around the concept of “getting to nimble.” In 1955, the average time a company would remain on the S&P 500 was 61 years. Fast forward to today, and the average is closer to 15. In the last 15 years, 52% of S&P 500 companies have fallen off the index. This is remarkable – and highlights how now more than ever it’s crucial to up-level people, processes, technologies, ecosystems, and strategy – as part of a mature company’s efforts to tackle the digital age. We were joined by Metis Strategy Founder, President, and Best-Selling Author, Peter High, alongside Shamim Mohammad, CITO at CarMax and Melanie Kalmar, CIO at Dow for a lively discussion around how even companies that are “digital immigrants” can begin to tackle this crucial transition.
We’ve known Peter for many years now, and now that he’s published his third and latest book: “Getting to Nimble: How to Transform Your Company into a Digital Leader,” we thought it would be an excellent time to cover how more established companies are handling these changes going into 2022. Please see below for the recording as well as some key takeaways both from our speakers and other CIO participants on the call.
What is a digital immigrant organization? And what are their unique challenges?
This refers to companies born before the digital age, who often end up facing unique challenges that more modern organizations do not. In this scenario, it’s critical for leadership to foster a culture of being “nimble” – it’s important that the org is versed in seizing opportunities as they come, and being willing to enact (potentially even uncomfortable) change.
This is typically a slow process whereby the company gradually begins to take on the characteristics of today’s digital native companies. This could mean introducing cross-functional teams, innovation initiatives, or a product orientation, to name a few obvious examples. This won’t happen overnight, it could be a five year plus process, but it’s better to be late than never get there. One of Google’s ex-CIOs put a huge emphasis on ensuring that teams are comfortable with change. They developed bureaucracy buster days where they’d poll the org on where the bureaucracy is and figure out what needs to be retired. Technology and processes ultimately have a lifecycle and you have to limit that debt – and that can even include cultural, or even people, attributes.
Additionally, this process should be at least somewhat organized. You have to have a strategy in the digital age, because what you’ll find is that there are so many things you could do, that what you should do is lost in the noise. Tech for tech’s sake is not going to get you where you need to go. Questions that should be considered immediately, especially given the changing ways we’ve been working are:
How can you change and improve the way people do their work each day by leveraging new digital capabilities?
What ecosystem partnerships do you currently have, and what partnerships could you develop to move the needle from a digital standpoint?
How can the IT org convince leadership that “getting to nimble” should be a core priority?
One speaker suggested bringing the leadership team out west to meet startups. This can be a good way to identify where the current gaps are in any organization, and also provide ideas on how to fill those gaps. It’s a preview into how more modern companies are addressing their digital pains and really helps demonstrate the art of possibilities.
Strong co-sponsors are always very important in these initiatives – it can’t just be IT. You need support from the business side of the house. Where are they feeling the pain? How can IT help improve it? Ultimately, you’ll have to prove to the CFO and the board that new initiatives are creating a better experience and revenue before you’ll be able to get more support, so pick your first few projects carefully.
Another thought for companies that have retail branches or manufacturing sites is actually taking management out to see them. It’s one thing to ask about where the bureaucracy is, but it’s a whole separate thing to go and see it. Why are you doing things the way you are doing them? Often people have just passed down the way they did their work to the next generation coming in with no fresh eyes. People become disconnected as they get higher up inside the company.
Finally, compensation is key. Tying bonuses and incentives to innovation-oriented goals is ultimately the fastest way to get employees onboard. Otherwise, it will always wind up as an afterthought when compared to compensated metrics.
What are some innovative ideas around hiring in a tightening labor market?
A few insightful thoughts here: First, consider that compensation is all messed up at the moment and needs to be re-evaluated. This could mean bonuses or promotions for core talent, or it could mean restructuring compensation to encourage retention. There are a lot of new ideas being floated right now on the technical talent side: How can you empower talented individuals on the technical side (developers, IT, etc.) who don’t want to manage? Is there a career path for those individuals? This is a great way to manage technical retention and can be a huge relief for those who aren’t interested in management.
On the entry level side, Peter talks a little about Rob Alexander at Capital One, and his amazing internship program. By creating a well-defined process and bringing in large cohorts, Capital One was able to put interns to work on meaningful projects, and evaluate over several months (rather than a few days) which are the talented students. This way, they can bring the very best back with full-time employment offers, and give these talented individuals fast elevators through the org, and aspirational journeys for others to follow. Once onboard, similar to consulting, they also do rotations through the business, eventually landing in a specific BU.
And while new talent is important, it’s important not to forget existing talent. Many companies are starting to push internal universities to help existing employees (or even recent grads) build the skills of tomorrow, and hiring for flexibility, current skill, and willingness to learn is beginning to become more important than, perhaps, a four year degree for many roles. One stat Peter shared is that 75% of employees today don’t even use their undergraduate degree. As the demand for STEM graduates continues to outstrip the supply, large companies are going to increasingly shift towards apprenticeship and continued-learning models to broaden their potential talent pools.
Broadly, there has been a big reset in expectations around compensation and in terms of where people wish to live. Best intentions are not always translated right now, and employees don’t feel their ideas are being taken into consideration. It’s important to poll people and remember who your stars and influencers are. Understand and be realistic about what would happen if one of those stars were to depart. How much would it cost? What would it look like?
How can you better organize and balance cross-functional groups and product areas? How can you stop the sprawl?
There isn’t a single solution here, but it’s important to start by ensuring that teams are empowered, self-directed, and focused on going after business goals. Additionally, one way to keep some boundaries around things is embedding some enterprise architects in these teams (data, cyber, etc.). They can provide guidance to the teams (vs. policing, restricting, or slowing them down). The goal is to keep them in an advisory role so that teams don’t jump off a cliff.
DevOps, APIs and data are converging towards the left and becoming a dev-led vs. management-led movement. With that being the case, how should executives implement better data strategy going forward?
Almost everything in the strategy bucket has significant processes associated with it. How do you find ways to cordon these off to make sure you’re making relevant progress across the entire model? Nothing is written in stone, and if anything is hindering business agility, it’s important to be flexible and make adjustments.