As we embark on this new journey that is the 2020’s, CEOs ought to acknowledge the crossroads that’s ahead of them, and the choice they need to make. As fast-moving as the last decade seemed, the next one will likely shatter that perception. Whatever discoveries and advances were made in the last ten years or so, they’re now bound to hit mainstream adoption. That means an even lower barrier to entry, higher consumer expectations, as well as new niches opening up and being filled by newcomers. What’s also important to mention here is the ‘winner-takes-all’ effect that we’ll see being augmented in many markets. This means the need to be the first (in order to become the fastest growing) will further intensify.
Here are our 5 questions that CEOs need to ask (themselves, their executive team – everybody) in 2020:
1. What is our relationship with technology?
The first question focuses on an organization’s relationship with technology. That’s because as technology’s role in delivering value (in virtually all fields) increases, companies and their management teams need to acknowledge its importance and treat it as the core function that it is. Let’s take a look at some of the things that this question shines a spotlight on.
To begin with, IT needs to be recognized as a key business value creator within the organization. As such, it must have sufficient resources allocated in order to ensure it functions at a high level and delivers on the promised benefits. Second, what is the relationship between business and IT? Because if IT is not an integral part of the business, it’s hard to imagine everyone pulling in the same direction, avoiding waste and possible conflicts of interest along the way. Third, technology should be unifying the organization, not helping to develop silos. If something works really well in one area of the business, implement it in all areas, if possible.
Also, you need to identify to what degree the IT function can facilitate (intra- and interdepartmental) collaboration. In a highly collaborative environment, it should be straightforward to quickly find out someone’s ideas on a topic. Finally, when it comes to integrating tech into the fabric of a company, one of the most effective ways to do this is promoting people with a technical background into positions of responsibility. This ensures that during high-level meetings there is always a technology perspective that can balance out the narrative and indeed help to properly get the message across to other members, e.g. by leveraging personal relationships.
2. How agile are we as an organization?
Agility in a dynamic marketplace is an important predictor of success, as this suggests a high level of adaptability. Here is Marc Lankhorst on the topic – there is a wealth of information in that talk. And if you’re after a shorter version, this is a good introduction. Agility is not just about software development: “doing Scrum” doesn’t necessarily make you agile as an enterprise. If you’re pouring concrete in an agile way, the end result still won’t be very flexible. Rather, agility has multiple aspects – process agility, business agility, system agility – and it’s easy to dismiss or downplay its role in ensuring the organization performs well. This is particularly the case in ‘freeze frame’ scenarios where a company may (seem to) be doing OK at a specific moment in time.
However, when analyzed across a longer arc of time, problems start cropping up and the deviation from optimal performance grows significantly. This is analogous to a broken clock showing the correct time twice a day. Basically, just because you may be among the best at delivering a certain service in the present, doesn’t mean you should stop trying to come up with a new service/product altogether, or making investments that promote your ability to easily course correct. Here is a short clip of Jeff Bezos addressing this in 2018:
So how can the CEO address this? First, understand your relationship with agility – does it play an important role in your business at the moment? For instance, has the management team given agility any thought, invested any resources, hired any people that are conducive to the organization being able to quickly and effectively undergo change? If you’re thinking “Such as…?”, well ask yourself whether you’ve created any team whose goal is to future-proof the company; or started a strategic partnership with another institution; or streamlined and decoupled the IT stack.
Such actions as mentioned above have the potential to bring substantial benefits. And if the answer is no – well, there’s your starting point. Undergoing change in an efficient manner can yield great results. For example, replacing part of the IT landscape in a fast and secure manner; identifying key market trends and leveraging them before the competition; steering clear of regulatory problems through wise tech investments. But this all starts by recognizing the strategic importance of agility.
Then, start addressing things like agile working methods and creating flexible results. Confront tech leaders in the organization and get a good grasp on whether your IT function is at the forefront of change or lagging behind the business. And if indeed it’s constantly playing catch up with the rest of the business, what are the reasons for this – is superior staffing required, is it to do with legacy systems? After all, what this effectively means is your company itself is (or undoubtedly will be) playing catch up with the market. When you have a good understanding of your level of agility you can start formulating a solution.
Thanks for making it to the end. This is it for Part 1 of the ‘5 Questions CEOs Should Ask Themselves in 2020’ series. Be sure to check out the second part next time, when we’ll address the remaining three questions!