Is high risk-aversion to change and modernization ever warranted?

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CIO Strategic Advisor in Services (non-Government), 2 - 10 employees
A CEO from one of the leading financial institutions and I were talking about the integration of IT and the business. I said, "We've got to stop calling it that. Stop creating the separation between the two.” And he said, "No, I completely disagree. You absolutely should consider IT different from the business." And he was adamant about it. And his reasoning was very traditional in the way that he was thinking about the role that IT played as more of a reactive function within the company. I know some folks in financial services that are of the other mindset, but there are reasons why I think that change becomes hard. For example, I was doing work for one of the major airlines in the world and they run their operations on a mainframe. We talked about, "Okay, what does it mean to transform that and modernize it?" And the reality was not just the cost, but the risk to the organization and the operations of their airline were so significant that there was no way that it even came close to outweighing the value they would get over a period of time. And so they just continue doing it. And unfortunately the software in that particular industry is so heavily specialized that it just doesn't get modernized unless you want to do it yourself and then you kind of get back to this change aversion.
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CTO in Software, 11 - 50 employees

I feel like that argument is so overplayed: “Because we're so special, we can't modernize our software.” We need to stay because this is the way we've always done things. You need to make some bold choices to your business. And this risk/reward perspective isn't moving things forward, especially in healthcare and financial services. We've been stuck in the 1950s on both without embracing true digital transformation because of various risk factors.

CIO Strategic Advisor in Services (non-Government), 2 - 10 employees

I think you're right. Now in this particular case, I actually side with the airline because when you look at the numbers and you look at what would have been required, I actually don't think it would have been a good idea for them to do that. But I do agree with you. I think some people use it as the wet blanket to throw on top and say, "Well, this is the way we've always done things, so we're not going to modernize it." You have to look at the value equation, right? It's risk and value. What is the risk of doing it or not doing it? And what is truly the value of doing it or not doing it, right? When we talk about technical debt, just because I have old stuff running doesn't necessarily mean that's bad.

Director of IT, 51 - 200 employees

It kind of comes back to people's expectations. And what's your customer's expectation? And to kind of go back to financial services, if an ATM goes down, and there's another right nearby ATM, that's kind of acceptable. But if all their ATMs in a region go down, that's a huge risk and that's a huge impact to your business.

CEO in Software, 11 - 50 employees
I'm always falling back on the notion of leadership. From a leadership standpoint, the interesting thing about IT is that, it's not like facilities, it's not like marketing, it's not even like sales. If the head of sales makes a mistake, sales doesn’t grow as fast as it  could. Employee turnover is a little worse than it should be. If marketing makes a mistake, most people don't even recognize it. When a mistake is made in IT, it affects every part of the company and it involves obvious interruption, like a flat tire in a car. So the problem is the majority of CEOs still don't hire CIOs in the way they should. They don't source them the way they should and they don't enable them the way they should. CIOs come in all flavors, just like heads of marketing and heads of sales. There are companies where the head of IT is most likely not making change because they don't feel like they have a great relationship with the CEO or their boss. They're worried that if they make a mistake, they're going to get fired. Or a CIO can have his or her own failings as a human and a risk aversion associated with their leadership. Those things are different for an IT leader to some degree than they are for almost any other department in the company. They get highlighted much more effectively.  Unfortunately, without aggressive tactics by the executive team to find more ideal candidates that match the need for innovation or to create  a culture shift in IT, you run that risk of finding people that are victims of their own failings from a leadership standpoint. Whether or not they're a good IT person is immaterial.
3 Replies
CIO Strategic Advisor in Services (non-Government), 2 - 10 employees

You get what you ask for, right? I've had conversations with executive recruiters that have clarified the same point. They're not asking for what they really need, but the problem is they've been conditioned on what that traditional CIO looks like for so long. They actually don't know what that proper CIO looks like or how to ask for that person, because they're conditioned that it is that back office organization, sadly.

CTO in Software, 11 - 50 employees

You should not be pattern matching against the CIO candidate. You should look for the candidate with traits that map to what your strategic business initiatives are. And that candidate should be able to articulate how they will drive that forward. Both with strategy and tactics. And if that's not the case, they're not the right candidate.

CIO Strategic Advisor in Services (non-Government), 2 - 10 employees

Change is absolutely needed. Thinking about the branding, I think IT is perfectly okay. I mean, otherwise you're just changing the deck chairs. You change the titles and you hope things change accordingly. So, how do you start to turn that battleship in the bathtub? You have to start making those changes. First building the relationships, having the right context, setting the right culture, bringing the right organization into place. I mean, there are a series of traits that an IT leader must exhibit and execute on, straightforward and right away. It's not something where they can say, "Okay, I'm going to learn it, I'm going to incrementally improve upon it." No, it needs to be now.

Senior Information Security Manager in Software, 501 - 1,000 employees
Yes.  Sometimes a system is so critical, requires so much uptime, that any sort of migration or modernization can’t be done.  Obviously, this can’t go on forever. But may indeed be an effective short-term approach.

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