CIOs on the Tightrope: How to Balance Competing Demands in Today’s C-Suite
Wearing only jeans and a T-shirt, he stepped out onto a 5-cm wire swaying 1,500 feet above the Grand Canyon’s Little Colorado River.
Winds gusted to 30 mph along the quarter-mile of tightrope. There was no safety harness this time, just a 45-foot balance pole to steady his footing. (Check your Apple watch: is your heart rate up yet?) Aerialist Nik Wallenda awed his live audience with this audacious and demanding act of continuous adjustments and constant rebalancing. The image stuck with me.
Ten years later, many of the CIOs I work with find themselves in a similar high-wire act. The gap between where their company is and where it aspires to be can feel a mile wide. The support system to sustain innovation is razor-thin. They’ve been handed a balancing pole unevenly weighted with competing demands: daily operations and firefighting on one side, and strategic planning and innovation on the other. The stakes are high. An impatient CEO could demote or replace them mid-walk with a chief digital or innovation officer; a competitor might race past them with a new product; a sudden gust in the market could throw them off-balance entirely.
How did CIOs end up out on this wire? And how can they balance competing demands while the world—and the C-suite—is watching?
The Bright Spotlight: New Demands from the C-suite
Among the never-ending transformation, the COVID-19 pandemic pushed CIOs into the spotlight and kept them there. 77% of heads of IT say that their role has been elevated due to the shift to remote work, heightened cybersecurity threats, new digital demands from customers, and more. The wattage isn’t dimming. Three-fourths of CIOs expect their raised visibility within the organization will continue—and notably, 68% of their line-of-business colleagues agree.1
There’s less agreement on which feats CIOs should be performing in the spotlight. Even as economic uncertainty and niche skill shortages create a push toward operational efficiency, AI’s rapid progress is disrupting markets and creating opportunities that beg exploration. The tension is especially taut in large enterprises where CIOs have expansive roles. As the pandemonium following OpenAI’s ChatGPT3 and 4 launches demonstrated, even the world’s biggest and best-funded innovation engines are scrambling to get to market with more speed and agility—and are thrusting their CIOs out onto the wire in the white-hot spotlight, ready or not.
Conflicting demands from the C-suite can easily throw a CIO off balance. Their colleagues might not understand that the approach to innovation can vary from internal to external models, from low to high investment levels, and from short to long timespans. A CEO might want transformative innovation results ASAP—not yet appreciating that innovation’s “results” don’t fit neatly into traditional success measures and that innovation requires a willingness to embrace uncertainty, complexity, ambiguity, and risk. The COO might prioritize optimizing or automating back-office functionality, applying more pressure on the “daily operations” side of the balancing pole. The CFO might threaten to de-fund the pole altogether without proof of innovation’s short-term ROI—not realizing that unlike discrete R&D technology projects, innovation programs focus on the big picture, encompassing all phases from employee engagement to prototype creation to third-party engagement, and take time to yield quantifiable progress. Responding to these demands not only requires a CIO’s time and attention, but also highlights the need for clear distinction between the daily demands of the business and strategic innovation.
The Balancing Act: Technology vs. Innovation
Tightrope walkers learn early on to look ahead and keep moving forward—a difficult feat for CIOs whose attention is pulled in different directions by competing demands. Today’s IT leaders typically spend the lion’s share of their time in the technology function (40%), with the rest spread across collaboration with colleagues (25%), managing business capabilities such as ESG and customer experience (17%), and working with external customers or channel partners (18%)2.
Most CIOs are eager to recalibrate these commitments. Over the next three years, they’d like to slash the time spent supporting the technology needs of internal functions, and spend considerably more time driving innovation for the future state of the business.3
Several exercises can help CIOs build the new muscle needed to rebalance their efforts toward innovation.
- Develop distinct strategies for technology and innovation. The digital transformation of daily business will never end, and it will always co-exist with innovation. Yet the two terms shouldn’t be conflated. A simple framework for explaining the difference to C-suite colleagues is to position a technology strategy as the “what” (platform, infrastructure, capability, etc.) while an innovation strategy is the “how” (a process for discovering, vetting, planning, and deploying new value). Companies need both strategies, but recognizing the difference is key to managing the complexities of each.
A technology strategy equips the company with the digital tools and resources needed to execute its business strategy. For example, improving data architecture to optimize an ERP; pursuing XR technology to increase labor efficiency; or evaluating how OpenAI’s ChatGPTx could be used to improve the customer experience. The technology strategy must take into account how changes might disrupt existing systems or capabilities, and how to prioritize and coordinate deployments to align with business goals.
Strategic innovation doesn’t dictate specific technology innovations, but it does define the processes and structures needed to deliver those innovations effectively. It also lends discipline, vetting, and structure to the creative process. For example, ChatGPTx might have dozens of possible applications to the business. Strategic innovation would prepare the company to deliver the most appropriate innovations by assessing needs (e.g., voice of customer research, candid feedback from operations teams); evaluating ChatGPTx against other items in the innovation portfolio; considering how the tool fits into the company’s risk appetite, and whether new governing processes are needed; exploring how competitors are using ChatGPTx; and mapping it to the company’s strategic objectives.
- Tie the “why” of innovation to the business. CIOs need a mix of highly technical, influential, and adaptive communication skills. The same detailed discussion of new technical capabilities that rallies the IT team won’t fly in the C-suite, where executives want to focus on how innovation can impact—and improve—the business. Operational leaders began seeing CIOs as strategic advisors during the pandemic, and CIOs have an opportunity to build on that baseline. They can strengthen their position by proactively identifying business needs and opportunities, and articulating how strategic innovation can enable increased efficiency, better market position, and/or improved customer experience.
- Establish an innovation operating system. This exercise takes CIOs beyond setting and articulating a strategy, and moves them into actively rebalancing the organization toward innovation. In doing so, it also meets CIOs’ desire to spend more of their time focused on designing the future state of the business—and there’s arguably no more strategic role than that. It offers, in short, a path to achieving the balance that CIOs on the high wire are seeking.
The Ballast: An Innovation Operating System
Many organizations have a mechanism for capturing potentially innovative ideas—from mailboxes that mimic IT ticketing systems, to Slack channels where the whole enterprise can weigh in, to dedicated internal sites touted as “innovation pipelines.” Some companies create internal innovation teams or engage a broader ecosystem. Others invest in start-ups to infuse new capabilities. While these may be steps in the right direction, they don’t systematically operationalize innovation. A recent Vectorform survey of IT leaders confirms this gap. We found that while over 90% of companies believe it’s important to have a structured innovation process, only 60% of IT leaders believe their company’s process is structured.
That’s where an innovation operating system (OS) comes in. The OS takes a more strategic view of innovation, encompassing everything from pipeline reporting through product commercialization and end of life. It establishes well-defined systems, repeatable processes, and targeted tools for every step of the way.
Vectorform has been helping CIOs successfully walk the wire from innovation to execution for more than 20 years, so we know the power of an effective innovation operating system. We also know it isn’t a quick or easy undertaking. It requires a distinct focus on innovation strategy, systems, and communications. It reaches beyond the CIO’s office to engage line-of-business leaders and their operational perspectives. It establishes the virtual and physical infrastructures necessary for the system to operate at peak performance. And it demands change management practices that can bring everyone along on the journey.
If that sounds a bit daunting, it probably should. Less than 2% of organizations reach the “Nik Wallenda level” of mastery, where their innovation systems are fully optimized and so perfectly balanced with the business that they materially impact the brand, culture, financial results, and enterprise value. Instead, when we work with clients to assign a numeric innovation maturity level to their organization, most find that they’re still in the early stages. They’ve started to organize their innovation programs, are attempting to prioritize their initiatives, and are beginning to put some enterprise processes and systems in place. Again, those are all steps in the right direction—but without an operating system, their innovation efforts aren’t yet intentional, repeatable, or clearly linked to business strategy. They’re not yet setting or tracking targeted outcomes, and they’re unsure where to invest in their innovation portfolio. Their company’s innovation muscle needs some work if their CIO is going to keep their balance up on the high wire.
Find Your Footing
CIOs won’t be stepping off the tightrope any time soon, but most leaders we work with are up for the challenge. New innovation operating systems are helping them strike a better balance between supporting daily operations and driving tomorrow’s innovations. They’re aligning more effectively with their C-suite peers and advocating more confidently for their innovation programs. They may not be ready for the Grand Canyon, but they’re learning to look ahead and step forward with greater focus.
If you’d like to explore how an innovation operating system can help you regain your balance, contact Vectorform today.
Next Up: How to manage your innovation portfolio for maximum impact
1) State of the CIO, 2022 Credit: CIO
2) MIT Sloan School of Management
3) State of the CIO, 2022 Credit: CIO
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