Disruption frequently feels like it comes from outside sources, but many organizations are realizing that this change is more often driven from within — and the new IBM study "Incumbents Strike Back," a survey of thousands of C-suite executives also concludes that it's rarely new entrants into industries that shake up the status quo.
When responding to the study, 72 percent of respondents said that disruption within their industry is led by "innovative industry incumbents" rather than tech giants, outsider brands or startups just entering the field.
CIO responsibilities: Leadership in an evolving world
With the number of US business startups recently hitting a 40-year low, CIO responsibilities at established enterprises are increasingly focused on taking the lead when it comes to digital disruption, picking up the duties of industry transformation that might otherwise have been carried out by aggressive new entrants.
By virtue of technology's role in driving this change throughout organizations, CIOs have been thrust into a central role as leaders of innovation across all departments and facets of a company. Like it or not, the digital era has pushed the position of CIO from an administrative tech role to the C-suite's resident Reinventor, spearheading innovation on multiple fronts.
Here are four such responsibilities CIOs must embrace to fulfill their new role as leaders:
1. Acquire new skills for the digital future
Disruption and innovation don't happen in a vacuum. To push organizations forward, CIOs must be aggressive in reinventing through the acquisition of new skills capable of serving emerging digital efforts. This acquisition can come in the form of hiring employees with skill sets designed for the digital era, as well as encouraging skills development among current employees.
In addition, CIOs can pursue partnerships with vendors and organizations within their value chain, leveraging their expertise and personnel to support their transformation efforts. As the C-suite study indicates, these acquisition efforts are one reason incumbents are driving innovation instead of new entrants — executives are making efforts to acquire the talent and services that might otherwise be pursuing this disruption on their own.
2. Orchestrate platforms, rather than building your own
Proprietary platforms can offer value to some organizations, but many enterprise businesses are finding that the more cost-effective approach is to orchestrate assets and platforms through investments into scalable solutions.
Research from the C-suite study estimates that at least $1.2 trillion could be invested into capital reallocation for building out platforms and physical assets over the next three years. Innovative incumbents are focused on acquiring platforms and tools to support their cutting-edge digital efforts, including the adoption of IoT technology and blockchain, while also improving the use of data throughout an organization.
As digital ecosystems grow more complex, the CIOs able to orchestrate a cost-effective, high-return network of digital and physical assets will be the ones driving greater innovation and ROI for their organizations.
3. Use design thinking to enhance personalization
The benefits of personalization extend beyond service to customers, ultimately touching many aspects of internal enterprise operations and affecting employee productivity. The C-suite study research also found that CIO responsibilities increasingly require an embrace of design-thinking principles to generate meaningful insights and improve accountability, efficiency and trust. Two-thirds of C-suite Reinventors say they have developed effective methods for collaboration and co-creation with their customers, and 68 percent integrate customer feedback data into their design and planning processes.
By leveraging design thinking, CIOs can help larger organizations gain a better understanding of the human motivations, customer journeys and brand experiences of their consumer base. Sixty-five percent of Reinventors say their efforts to create detailed customer journey maps via design-thinking strategies are "very effective."
4. Invest in experimentation
The competitive advantage that comes with being a Reinventor isn't earned by simply following in the footsteps of other innovators. CIOs at the enterprise level also must encourage the rest of the C-suite to invest in experimentation, creating a resource balance between stable, proven technology strategies and dynamic exploration to identify new areas of promise.
Experimentation is the only way to stay ahead of disruption and serve as an industry leader rather than a follower. While lean startups are often associated with this sort of groundbreaking innovation, industry incumbents are increasingly the ones pushing this transformation forward.
Three-quarters of Reinventors responding to the survey reported a business culture that rewards the fail-fast approach that startups have traditionally used to spearhead innovation. Rather than targeting disruption and innovation infrequently over time, CIOs should encourage gradual, consistent efforts to disrupt within the industry, strengthening a business culture focused on the future.
Today's CIOs are responsible for far more than the information technology utilized by an enterprise, They are tasked with leveraging that technology in new, innovative ways and helping the business keep pace with a rapidly changing industry. While these responsibilities may be new, forward-thinking C-suites now understand that effective transformation in the digital era depends on strong leadership from the CIO.