This past year, I conducted dozens and dozens of CXOTalk interviews with some of the world's top business executives. Many of these conversations directly address issues relevant to Chief Information Officers.
As we look ahead to 2022, I thought it might be helpful to CIOs if I summarized several patterns or themes that emerged from all these discussions.
I'm aware that the list below is woefully incomplete. It's a short list, so I had to leave out topics such as talent management and building teams, diversity and inclusion, managing technical debt, cloud migration, and other profoundly important issues.
With that apology, here are three strategic imperatives to which CIOs should pay particular attention in 2022.
CIO imperative one: Business leadership is the goal
CIOs are part of the overall business. There is no us and them – no "IT and the business," as it's often phrased. We don't talk about marketing or manufacturing as somehow not being part of the business, so why do we use these terms when it comes to IT?
Thinking about IT as separate from the business does a disservice to both sides. For the CIO, it creates an excuse not to deliver business results like every other organizational function. And for business leaders across the company, this view diminishes the role of IT, casting them as not worthy of full respect.
In reality, the most successful CIOs are change agents who lead by example to drive business results that support their organization's strategic mandates.
"The CIO needs to be about innovation. The "I" can be for innovation. The "I" needs to be about inspiration as well. The CIO has to play a role around the inspiration and the evangelism of technology and the education of the rest of the organization. The education of technology, certainly, but the education of the rest of the organization."
Implicit in these comments is a demand for the CIO to be tightly coupled with departments across the organization.
CIOs are paid to cope with the changing environment, changing business climate and, of course, the much more rapid change in technology. They always must work very closely with the business community.
My philosophy is there is only one reason technology exists here at UPS: to help the business and grow the business. Every CIO should align themselves intimately with the business and exploit technology for business.
The tech executive has to be part of shaping strategy. If a CIO is nothing but the technology voice of record and the operational expert, the back-office CIO, it's always going to be hard to be heard differently. As technology elevates strategy, so does the role of the technology executive. That doesn't mean it's the dominant voice that owns strategy, but it's a very active voice.
Also, the innovation function of understanding of what's coming next and how it applies to your organization, your business, your market, and then being able to craft the right investments to go and prove it.
We don't need PowerPoints and perspectives. We need assets and progress. Progress over process.
Advice to CIOs: be a business leader. In 2022, your career depends on being a leader linked to broader corporate strategies and outcomes. If you are not successful in this mission, your role as CIO will become gradually irrelevant. Therefore, examine your role to determine the areas in which you can contribute the most outstanding value. Do this now!
CIO imperative two: Recognize customer experience as the new digital transformation
We all know that digital transformation is a central focus for business modernization, including rethinking business models and implementing technologies that help us place customers first.
Based on my conversations with many C-level execs, I view customer experience as the next evolution of digital transformation. Although digital transformation emphasizes customer needs, customer experience takes a broader view. When we look across every touchpoint, every interaction an organization has with its customers, we enter the realm of customer experience.
While digital transformation places the customer at the center of processes, customer experience goes further, taking a holistic view of the entire customer journey.
In addition to all the challenges of digital transformation, creating a compelling customer experience requires gathering, analyzing, and understanding customer data. Actions based on data can run the gamut from redesigning products, rethinking processes to be more customer-friendly, or personalizing sales offers to be intuitive, helpful, and not creepy.
Technology enables all these changes, making the CIO a crucial player in customer experience.
When I look at the challenges, I would wrap them all around the word "experience": experience from the point of view of our employees and experience from the point of view of our customers.
On the employee side, we've wrapped a number of personas around our workers to help them be more productive in the world that we are in right now; not only with their work tools but also with balancing life because there is no boundary anymore between work and home. It's all meshed together, so we're looking at different applications to really help the employee out. Happy employees make happy customers.
On the customer side, it's all about the customer experience, making sure that when they access our websites or any of our products, they're reliable, they're peppy, they do everything that the customer needs them to do. Helping our internal workers, the back-office and engineers, make that happen.
It's all about experience, working with employees, and working with customers.
Consumers have choices. They can easily switch. Customer experience is directly tied to customer loyalty, repeat business with customers, and brand reputation.
Customers with high Net Promoter Scores (NPS) will promote the brand to their friends. [Business leaders] can measure it and see the correlation between the customer experience, customer sentiment, and the business results in terms of revenue, 0growth and the bottom line.
When customers feel loved, when they feel cared for, when they can trust their supplier to act in their best interest, that creates the kind of community that customers want to be part of and will work hard to stay a part of. Very few companies do that very well today. Those that do are growing and prospering.
When I say, "Put customers first," it doesn't mean forget about investors or employees. Of course, you have to serve those stakeholders. Until you have customers loving doing business with you, those other stakeholders will never prosper over the long haul.
Advice to CIOs: improve customer experience to drive revenue. Historically, the CIO role has been focused on internal systems, technology, and processes. In 2022, spend more time with an outside-in view to learn where you can help improve customer loyalty and contribute to revenue growth.
CIO imperative three: Strategic data is your future
Data is central to business strategy and decision-making in our digital world, with machine learning and AI gradually permeating every function across the company. For CIOs, the implication is straightforward: build out your data capabilities and collaborate with business peers to choose the correct problems and identify valuable outcomes.
Our greatest asset is clearly our clients. But one of the most important assets (beyond our clients) is our data. Our data is only as important as what we do with that data, transforming that data into insights that are actionable, actionable in the sense that we can help our clients make better decisions.
If you're a consumer, we want to help our clients make more informed decisions about their financial well-being. If you are a commercial client, we want to help those clients make well-informed financial decisions on how to run their company and make better investment decisions for their company.
Data truly is the fuel, if you will, on how to run our processes, how to run the interactions that we have with our clients, and how we run our digital processes end-to-end from the client interaction all the way through our employee interactions that we run every day.
Choosing which business problems to solve with data can be challenging for the CIO. I asked Bruno Aziza, the Head of Data and Analytics for Google Cloud, how to select data problems that are meaningful to the company. It's easier said than done:
Think about the problems that are the most related to the business value to your organization. The opportunity for data is so big that you tend to want to do everything. Focus on the business value, the business metrics. What is driving the bottom line with data? There's a huge opportunity there.
The two areas that we see people not fail but kind of lose their way is when you look at what I call the "why nots." Why not would we look at this use case? That sounds interesting but might not lead to a specific value.
Then there are the other use cases that sound interesting because they are highly innovative, but they're really not connected to some of the core issues that your organization is trying to fix.
Building close working relationships with the data team is crucial to establishing a solid data posture. I asked Sol Rashidi, Chief Analytics Officer of cosmetics manufacturer Estee Lauder, how to create a partnership with the data and analytics team:
Embrace your D&A team more. Loop them in. It could be weekly status meetings. It could be quarterly reviews. It could be when you're reviewing major strategic initiatives that you have to unlock or activate.
Bring a member of your D&A team into the fold. Treat them like one of you. That's what's going to help your story. They're not a tangential Thanksgiving sidebar dinner table, like the children at the kids' table. Fold them in early. Let them provide a perspective. It doesn't mean you have to agree, but that will really make a statement for your organization, to your leaders, to their leaders, and you never know what golden nugget you're going to discover that you didn't know before.
Advice to CIOs: build out your data capabilities now. Data and machine learning will become increasingly important in 2022. Now is the time to consider all aspects of your data team, processes, and plans.
Disclosure: Some of the interviews referenced above were conducted as part of CXOTalk customer projects.