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Foreword |
Enterprises respond to economic challenges in a variety of ways. Most are reactive or staunchly insist on maintaining the status quo just to survive. Leading enterprises view difficult times as an opportunity to pull ahead of the pack and emerge from the crisis stronger and more competitive. The CIO plays an integral role in this success.
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This report addresses the question, What do companies that position themselves for success during economically challenging times do, and what is the contribution of IT to that expected success?
“The CIO Challenge: Transforming Adversity Into Advantage” was written by members of the CIO research team, led by Heather Colella (research director), assisted by Diane Berry (managing vice president).
We would like to thank the many organizations and individuals that generously contributed their insights and experiences to the research, including:
- The contributors to our interviews and case studies: Kevin Novak, American Institute of Architects (U.S.); Paulo Cesena and João Cumerlato, Construtora Norberto Odebrecht (Brazil); Tony Tardugno, Excellus BlueCross BlueShield (U.S.); Larry Godec, First American Corporation (U.S.); Robert Gerardi, RSM McGladrey (U.S.); Bill Spooner, Sharp HealthCare (U.S.); Tony Natale, Shepherd Partners (U.S.); and Dr. Daniel Chan, Rico Singleton, Dr. Melodie Mayberry-Stewart and William Travis, State of New York (U.S.).
- Other Gartner colleagues: Austin Gillis, John Kresovsky and Eddy Louchart.
- Other members of the CIO research team.
“A leader is someone who doesn’t do what everyone else does.”
Richard S. Tedlow Professor of Business Administration Harvard Business School
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Executive summary |
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When responding to marketplace volatility, effective enterprises engage their entire leadership team—which includes the CIO—and take calculated risks, with emphasis on what value they will deliver to customers and constituents. They remain laser-focused on achieving expected results.
Whether in the public or private sector, whether in Europe, North America or Asia, most enterprises agree that these are tough times. Managing an enterprise always presents challenges, but managing in an uncertain environment is more complex because uncertainty accelerates the need for sound leadership and decision making.
While challenging times often present more opportunity, they require a higher level of excellence in all areas of leadership, communication, business management and application of technology. In this unique time, CIOs can take a leadership role in shaping the future of their enterprises because, as illustrated in the figure below, technology is core to virtually all issues enterprises face.
Enterprises raise effectiveness by concentrating on the core issues
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“A crisis is a terrible thing to waste.”
Paul Romer Economist Stanford University (also attributed to Machiavelli)
“Good managers do things right; good leaders do the right thing.”
Warren Bennis American scholar, leadership consultant, author
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Manage business fundamentals and look for growth opportunities
Leading enterprises use economic cycles to their advantage. They are quick to read the enterprise’s political, economic, competitive and consumer/constituent context, choose a response and focus on outcomes. CIOs can help enterprises take advantage of economic cycles by:
- Creating dashboards that, using a combination of indicators, encourage proactive responses
- Using risk management techniques, such as scenario planning, that let the enterprise explore options in the marketplace
- Leading cost optimization initiatives that create operational agility
What is most notable about leading enterprises is their willingness to re-examine—to be open to changing everything they do, including altering their business model and core strategies, in order to be successful. As others retreat, they advance.
Stay relentlessly focused on desired outcomes
To do the right thing, CIOs are leading the way by refining enterprise prioritization processes to create portfolio agility. They are placing increased emphasis on approving projects that deliver cost savings to the enterprise, using those cost savings within the same projects to fund growth or investment in the more strategic aspects of the projects. As the 2009 Gartner CIO Agenda report illustrates (see figure below), leading organizations invest more in growth and transformation initiatives. They can run the IT organization with less because they have developed an operationally efficient environment.
Enterprise effectiveness influences multiple factors in IT
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“Strategy without tactics is the slowest road to victory. Tactics without strategy is the noise before defeat.”
Sun Tzu The Art of War
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Continually refocus how you manage your business
Information is a core asset that IT organizations must use to help their business grow and transform. In difficult times, enterprises are more receptive to quality data than they might be at other times. As enterprises continue to monitor their business fundamentals, CIOs need to develop product and customer profitability models. These will help enterprises make the hard decisions about which products to retire and which customers to transition away from the enterprise.
The figure below summarizes common attributes of executive leadership in general, and the CIO in particular, at successful enterprises, along with contributing cultural attributes.
Attributes of successful companies
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“From a portfolio standpoint, there has been a flight to quality.”
Tony Natale President Shepherd Partners
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