February 5, 2014
Macro trends in technology and shifting customer behavior are giving rise to the connected business — which is not defined by technology but is rather a new style of doing business. The responsibility for transforming a company into a connected business ultimately rests with the CEO, but the CIO also plays a central role.
CIOs will be responsible for introducing technology solutions that help break down silos, boost cross-team collaboration, drive the end-to-end customer experience, and engage more deeply with customers. In order to succeed, CIOs must go beyond technology enablement and support organizational and cultural transformation. It’s easier to implement technology innovations than to change habits and culture. Technology is only the catalyst for cultural and organizational transformation. As Jeroen Tas, CIO, Philips told me:
“The core goal is to transform into a highly collaborative customer-driven organization, away from a functional business unit-led organization. This requires a complete cultural transformation.”
My report presents the strategic imperatives that CIOs must execute to address the four dimensions of transformation: culture, organization, department, and ecosystem. The main take-aways are that:
- Cultural transformation will be the biggest task for business in the years ahead. Changing business culture is a soft issue with a hard business impact. An agile and flexible culture translates into closer customer and employee engagement and is the basis for higher revenue growth. All of the businesses we spoke with have put transforming the culture at the center of their transformation process.
- Transformation requires complete CEO support. It’s something of a paradox, but it takes top-down support to empower more bottom-up participation. Ultimately, connected business will be driven by a board that appoints a chief executive who has a vision of how to transform a traditional business into a connected business by encouraging participation.
- Organizational transformation is based on interdisciplinary teams. Employees of the connected business will speak the languages of different departments in order to facilitate collaboration across different areas of expertise. The interdisciplinary approach to team-building is a stepping stone in the shift from selling products to selling solutions and surviving in provider ecosystems.
The findings in the report are based on interviews with CIOs, CMOs, and network managers at 19 large global companies.