10 Insights On Inspirational Leadership For 2016

Scott Mautz

Start your 2016 leadership strategy with a sense of renewal by considering the following question:

Is inspirational leadership the holy grail of leadership?

I define such a pinnacle – the holy grail of leadership – as that which engenders the highest levels of employee engagement and commitment.

So, by that definition, then yes, hands down, inspirational leadership is the summit. And your employees would agree with me.

A major study examined a half million employees and their assessment of 50,000 leaders in terms of 16 core leadership competencies. The outcome of the study showed the ability to inspire “is what most powerfully separates the most effective leaders from the average and least-effective leaders. And it is the factor most subordinates identify when asked what they would most like to have in their leader.”

A pursuit worth the effort – but then you probably didn’t need a study to tell you that. We all know how it feels when we are around an inspirational leader. Inspirational leaders spur the expenditure of discretionary energy. You feel uplifted. The power of possibility surges through you. You might even physically get the tingles as you are reminded and reinvigorated about what could lie ahead. You feel connected to the mission, to the leader, to others, and to your work. You feel worthy, and worthwhile. You aim higher and try harder. You feel compelled to take action.

You can trigger this response.

And it turns out there are plenty of opportunities to do so. In a major survey, 55 percent of managers said the ability to inspire was the single most important leadership attribute. And yet only 11 percent said their current manager was inspiring.  Anecdotally and honestly, how many of the leaders around you can you say are truly inspiring?

So there is no question of the void to be filled. The question you may have is, can inspirational leadership be taught?  In another major study, almost 900 executives were asked to pick one leadership attribute out of 16 to focus on for improvement. Among the 310 who chose to work on improving their ability to inspire others, when doing so they moved from the 42nd percentile, (below average), to the 70th percentile – a statistically positive gain and evidence that you can indeed learn to become inspiring.

You absolutely can elevate your inspirational firepower. And you don’t have to wait – you can start 2016 with a reinvigorated leadership agenda. What follows will fire you up to do just that. Here are 10 ways to inspire others to action.

1. To inspire, be inspired

To inspire others to action you have to emit a passion for your own actions. Financial guru Suze Orman has openly admitted that the single secret to her success is her willingness to show her passion for what she is doing.

Warren Buffet says that at Berkshire Hathaway, 75percent of the managers they hire are independently wealthy and don’t need to work – by design. Hiring such a profile allows them to focus on talent that simply loves and is passionate about what they’re doing “because that passion brings out an enthusiasm and a dedication in others.

2. Be custom-built contagious

Closely related to point # 1 above, while it is certain you must have passion to foster passion, it is just as essential that you demonstrate this passion and energy in your own way. If the energy is emitted in an inauthentic manner, it defeats the purpose. Yes, you can light up the room with loud and heartfelt oratory – that’s certainly one way to go if it feels natural. But introverts take heart. Some of most inspirational leaders I’ve ever seen command the room as they do what I call “elegantly electrify.” They might not even speak very often, but when they do, it is with a quiet authority and an underlying, and intense focus and passion.

There are many ways to transmit your energy. However you choose to do it, the bottom line is you must do it. It is a fundamental requirement of inspirational leaders to be able to turbocharge via osmosis.

3. Remember it’s about them, not you; a greater cause, not your cause

There is an underpinning of modesty and a sense of servitude inherent in inspirational leaders. They are connectors, not climbers, more interested in relationships than their own reward. They ultimately see their role as serving something greater than themselves and couldn’t hide it if they tried. Keep this mantra front and center for the times you might stray off center.

4. Motivate them to prove you’re right (about them)

Sorry for the tongue twister – here’s what I mean by this: The first part of this involves a commitment to actively instill confidence in others. When we do, often the first thing they want to do is demonstrate we were right to place such confidence in them. They will show their appreciation by wanting to further earn yours.

The second half of this idea though is not just to express confidence in someone and detach, letting the energy from the positive transaction wane and leaving the compliment feeling empty. Instead, remain an interested stakeholder in their ultimate success. For example, instead of just stating your confidence in someone, you can say, “I believe in you and I believe you are going to crush this project. I’m here to help you see it through to the successful conclusion of which I know you are capable.” You get the idea. Instill confidence and install a conduit of continued support. They’ll take great pride in proving your belief in them is well-warranted.

5. Inspire people to become better versions of themselves (not better versions of you)

Inherent in this sentiment is a commitment to understand the unique DNA of those you interact with and a desire to help them build from that singular blueprint. It is both an investment in and an understanding of the individual. It requires unearthing the best qualities of each person. Leadership expert John C. Maxwell likens it to the plight of the gold prospector who is “always on the lookout for potential gold mines. When they find traces of ore, prospectors assume there’s a rich vein to unearth, and they start digging. In the same fashion, inspirational leaders search for the best traits within a person and commit to uncovering them.”

6. Communicate a clear, resonant vision with stretching goals

People want to know where they are going, and why. They want to be connected to something bigger than themselves and pursue goals with intrinsic value that help them accomplish things important to them. Communicating such messages in a clear and compelling manner is a central function of the inspirational leader. And if your vision requires change by the way, make your case for change clear. People also want to be challenged and be given a chance to rise to the occasion. So set the bar high without being unrealistic.

7. Act like a pace car

In auto racing, the “pace car” rides ahead of the field for a few laps at a high, even keel speed before the race starts. Then, having enabled a running start, the pace car drops out of the way as the cars behind accelerate past with vigor. Likewise, the inspirational leader sets the pace for the organization, role modeling the behaviors they want to see, helping the “field” to a running start, and then getting out of the way after fully charging and empowering the organization.

8. Provide reality and hope

The key here is to provide a balance of both. It’s hard to be inspired by someone who infuses high doses of optimism and possibility, but is clearly not grounded in reality. Likewise, while transparency is inspiring, when that transparency involves a rough state of the union address, the constituents need to hear a reason to believe and a plan for better, brighter days ahead as well.

9. Know the tenets of “how to be,” not just “how to do” (to inspire)

Inspirational leadership is not just about how to do, it’s as much about how to be.  Research shows there are 6 core attributes that employees find most inspiring in their leader – 6 “how to be’s” if you will:

  • Be humble (people are drawn to humility, especially when it includes showing vulnerability)
  • Be authentic (which makes you accessible)
  • Be accountable (including a zeal for facing challenges head-on)
  • Be caring (including caring enough to really listen to what others have to say)
  • Be trustworthy (including doing what you say you are going to do – the well-documented  secret to Nelson Mandela being such an effective and inspirational leader)
  • Be driven (including an ability to get to the heart of the issue, cutting through the baloney, and making things happen)

10. Get (and expect) results

The truth is, while losers can be lovable and yes, at times inspiring, you are much more likely to be inspired by a lovable winner. Winners get results. Getting results inspires an organization on many levels. And expecting results does the same.

So make 2016 your year, the year you recommitted to inspirational leadership. The net result will inspire everyone involved – including you.

Want more insight on effective leadership strategies? See A Necessary Redefinition Of Responsibility And Leadership.

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CEO Priorities And Challenges In The Digital World

Dr. Chakib Bouhdary

Digital transformation is here, and it is moving fast. Companies are starting to realize the enormous power of digital technologies like artificial intelligence (AI), Internet of things (IoT) and blockchain. These technologies will drive massive opportunities—and threats—for every company, and they will impact all aspects of business, including the business model. In fact, business velocity has never been this fast, yet it will never be this slow again.

To move quickly, companies need to be clear on what they want to achieve through digital transformation and understand the possible roadblocks. Based on my meetings with customer executives across regions and industries, I have learned that CEOs often have the same three priorities and face the same three challenges:

1. Customer experience – No longer defined by omnichannel and personalized marketing.

Not surprisingly, 92 percent of digital leaders focus on customer experience. However, this is no longer just about omnichannel and personalized marketing – it is about the total customer experience. Businesses are realizing that they need to reimagine their value proposition and orchestrate changes across the value chain – from the first point of interaction to manufacturing, to shipment, to service – and be able to deliver the total customer experience. In some cases, it will even be necessary to change the core product or service itself.

2. Step change in productivity – Transform productivity and cost structure through digital technologies.

Businesses have been using technology to achieve growth for decades, but by combining emerging technologies, they can now achieve a significant productivity boost and reduce costs. For this to happen, companies must first identify the scenarios that will drive significant change in productivity, prioritize them based on value, and then determine the right technologies and solutions. Both Mckinsey and Boston Consulting Group expect a 15 to 30 percent improvement in productivity through digital advancements – blowing the doors off business-as-usual and its incremental productivity growth of 1 to 2 percent.

3. Employee engagement – Fostering a culture of innovation should be at the core of any business.

Companies are looking to create an environment that encourages creativity and innovation. Leaders are attracting the needed talent and building the right skill sets. Additionally, they aim for ways to attract a diverse workforce, improve collaborations, and empower employees – because engaged employees are crucial in order to achieve the best results. This Gallup study reveals that approximately 85 percent of employees worldwide are performing below their potential due to engagement issues.

As CEOs work towards achieving these three desired outcomes, they face some critical challenges that they must address. I define the top three challenges as follows: run vs. innovate, corporate cholesterol, and digital transformation roadmap.

1. Run vs. innovate – To be successful you must prioritize the future.

The foremost challenge that CEOs are facing is how they can keep running current profitable businesses while investing in future innovations. Quite often these two conflict as most executives mistakenly prioritize the first and spend much less time on the latter. This must change. CEOs and their management teams need to spend more time thinking about what digital is for them, discuss new ideas, and reimagine the future. According to Gartner, approximately 50 percent of boards are pushing their CEOs to make progress on digital. Although this is a promising sign, digital must become a priority on every CEOs agenda.

2. Corporate cholesterol – Do not let company culture get in the way of change.

The older the company is, the more stuck it likely is with policies, procedures, layers of management, and risk averseness. When a company’s own processes get in the way of change, that is what I call “corporate cholesterol.” CEOs need to change the culture, encourage cross-team collaborations, and bring in more diverse thinking to reduce the cholesterol levels. In fact, both Mckinsey and Capgemini conclude that culture is the number-one obstacle to digital effectiveness.

3. Digital transformation roadmap – Digital transformation is a journey without a destination.

Many CEOs struggle with their digital roadmap. Questions like: Where do I start? Can a CDO or another executive run this innovation for me? What is my three- to five-year roadmap? often come up during the conversations. Most companies think that there is a set roadmap, or a silver bullet, for digital transformation, but that is not the case. Digital transformation is a journey without a destination, and each company must start small, acquire the necessary skills and knowledge, and continue to innovate.

It is time to face the digital reality and make it a priority. According to KPMG, 70 percent to 80 percent of CEOs believe that the next three years are more critical for their company than the last fifty. And there is good reason to worry, as 75 percent of S&P 500 companies from 2012 will be replaced by 2027 at the current disruption rate.

Download this short executive document. 

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Dr. Chakib Bouhdary

About Dr. Chakib Bouhdary

Dr. Chakib Bouhdary is the Digital Transformation Officer at SAP. Chakib spearheads thought leadership for the SAP digital strategy and advises on the SAP business model, having led its transformation in 2010. He also engages with strategic customers and prospects on digital strategy and chairs Executive Digital Exchange (EDX), which is a global community of digital innovation leaders. Follow Chakib on LinkedIn and Twitter

Why Our View Of Being Human In A Digital World Must Change

Paul Kurchina

Technology innovation has been a source of inspired thinking for generations. From movie screens and books to the innovator’s sketch pad, the dream of life fully automated, entirely informed, and effortlessly enjoyable has guided every invention and innovation created throughout human history.

Humans have always been masters of technology innovation, but something happened in the last five years. Over 40% of companies listed at the top of the Fortune 500 disappeared by 2010. Business models that lasted more than 100 years are no longer competitive enough to gain customer attention. The 33-year average lifespan of businesses in 1964 has narrowed to 24 years in 2016 and is expected to further decline by 50% in 2027. And now, people are afraid that robots will soon replace them – or, as some may say, erase the usefulness of the human race.

How did we go from daydreaming about the impossible possibilities of technology to fearing its vast potential? The reason is quite simple: we’re letting technology reshape us, instead of commanding how it can further perfect our lives.

It’s time to get curious about going digital again

Without a doubt, people, in general, have been caught up in the velocity, volume, and variety of change in this world. No matter the technology we adopt, there’s always a newer, better, faster, and easier innovation around the corner. Even our employers are continuously rethinking, reimagining, and resetting themselves as they find new ways to become more efficient, effective, and relevant.

But when it comes to fulfilling our career plans and sustaining our livelihoods, we are letting this endless wave of digital transformation happen to us, not for us. This passivity in digital adoption is not what this new economy needs to grow sustainably and extend prosperity to all people.

Instead, we need to start considering technology as a tool to reframe our careers based on three emerging truths:

1. Being human is a competitive advantage

Recently, I have come across articles that declare that “human is the next big thing” in digital transformation. When you consider that five generations are coexisting in the workplace and life spans are increasing to a point where the 100-year life and a perennial career are well within reach, this line of thinking makes sense. However, I also argue that, when it comes to digital strategies, human is – and should have always been – the big thing.

Think about it: technology exists because of our human nature and ingenuity. With or without it, people still need, for example, to collaborate globally and across industries, simplify daily activities, equalize economic prosperity, and remove bias to make less discriminatory hiring and promotion decisions. And nothing is more capable than we are in understanding these issues and the role technology plays to improve them.

2. Personal purpose is an asset at work 

Most successful leaders in business, government, and social causes understand that their personal purpose drives decisions and actions. Every day, they live out authentic lives by using their passions as a guide.

Your personal brand encompasses everything that you value, fight for, and stake your reputation on. It’s your purpose. It’s what makes you distinctively you. By knowing how technology can be used to clearly articulate and fulfill your mission, you can lean into your purpose with vindication and lead with it. 

3. We must get fit for what’s next

The convergence of digital technologies and physical workspaces is disrupting everyone from top executives to interns. And with up to 47% of jobs susceptible to digital replacement within the next decade, there’s no better time to future-proof yourself.

To prepare for what’s next for your career, you should add two tasks to your to-do list:

  • Become tech-fluent: Do your research about emerging technology, especially if your organization is not using it yet. Take this opportunity to reshape your work experience based on your strengths and skills.
  • Make lifelong learning a daily habit: Understand the latest technology and the best practices and skills needed to support it. This level of self-awareness can help you defend the value of your role, find new ways to improve your job, and innovate processes that match implemented digital capabilities.

Corporation You: Treat your personal digital transformation like a business

Just as our employers are reinventing themselves, we must also actively evolve ourselves, accept risks, and think with insatiable curiosity, agility, focus, and openness.

Old rules need not apply here – there’s no such thing as a corporate ladder, anointed retirement age, and a magic age for life’s major milestones. By breaking away from these traditional myths and owning the capabilities that technology offers, we can rediscover our value as creative, emotionally intelligent, and self-aware workers who will always be irreplaceable.

Reflect, rethink, reimagine, and innovate yourself to prepare for now and years to come. Register today to attend “Innovate You: Get Fit for What’s Next in Calgary or Vancouver, sponsored by Americas’ SAP Users’ Group (ASUG), to get all the insights and tools you need to thrive personally and professionally.

Image credit: © Agsandrew Dreamstime.com

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Paul Kurchina

About Paul Kurchina

Paul Kurchina is a community builder and evangelist with the Americas’ SAP Users Group (ASUG), responsible for developing a change management program for ASUG members.

Hack the CIO

By Thomas Saueressig, Timo Elliott, Sam Yen, and Bennett Voyles

For nerds, the weeks right before finals are a Cinderella moment. Suddenly they’re stars. Pocket protectors are fashionable; people find their jokes a whole lot funnier; Dungeons & Dragons sounds cool.

Many CIOs are enjoying this kind of moment now, as companies everywhere face the business equivalent of a final exam for a vital class they have managed to mostly avoid so far: digital transformation.

But as always, there is a limit to nerdy magic. No matter how helpful CIOs try to be, their classmates still won’t pass if they don’t learn the material. With IT increasingly central to every business—from the customer experience to the offering to the business model itself—we all need to start thinking like CIOs.

Pass the digital transformation exam, and you probably have a bright future ahead. A recent SAP-Oxford Economics study of 3,100 organizations in a variety of industries across 17 countries found that the companies that have taken the lead in digital transformation earn higher profits and revenues and have more competitive differentiation than their peers. They also expect 23% more revenue growth from their digital initiatives over the next two years—an estimate 2.5 to 4 times larger than the average company’s.

But the market is grading on a steep curve: this same SAP-Oxford study found that only 3% have completed some degree of digital transformation across their organization. Other surveys also suggest that most companies won’t be graduating anytime soon: in one recent survey of 450 heads of digital transformation for enterprises in the United States, United Kingdom, France, and Germany by technology company Couchbase, 90% agreed that most digital projects fail to meet expectations and deliver only incremental improvements. Worse: over half (54%) believe that organizations that don’t succeed with their transformation project will fail or be absorbed by a savvier competitor within four years.

Companies that are making the grade understand that unlike earlier technical advances, digital transformation doesn’t just support the business, it’s the future of the business. That’s why 60% of digital leading companies have entrusted the leadership of their transformation to their CIO, and that’s why experts say businesspeople must do more than have a vague understanding of the technology. They must also master a way of thinking and looking at business challenges that is unfamiliar to most people outside the IT department.

In other words, if you don’t think like a CIO yet, now is a very good time to learn.

However, given that you probably don’t have a spare 15 years to learn what your CIO knows, we asked the experts what makes CIO thinking distinctive. Here are the top eight mind hacks.

1. Think in Systems

A lot of businesspeople are used to seeing their organization as a series of loosely joined silos. But in the world of digital business, everything is part of a larger system.

CIOs have known for a long time that smart processes win. Whether they were installing enterprise resource planning systems or working with the business to imagine the customer’s journey, they always had to think in holistic ways that crossed traditional departmental, functional, and operational boundaries.

Unlike other business leaders, CIOs spend their careers looking across systems. Why did our supply chain go down? How can we support this new business initiative beyond a single department or function? Now supported by end-to-end process methodologies such as design thinking, good CIOs have developed a way of looking at the company that can lead to radical simplifications that can reduce cost and improve performance at the same time.

They are also used to thinking beyond temporal boundaries. “This idea that the power of technology doubles every two years means that as you’re planning ahead you can’t think in terms of a linear process, you have to think in terms of huge jumps,” says Jay Ferro, CIO of TransPerfect, a New York–based global translation firm.

No wonder the SAP-Oxford transformation study found that one of the values transformational leaders shared was a tendency to look beyond silos and view the digital transformation as a company-wide initiative.

This will come in handy because in digital transformation, not only do business processes evolve but the company’s entire value proposition changes, says Jeanne Ross, principal research scientist at the Center for Information Systems Research at the Massachusetts Institute of Technology (MIT). “It either already has or it’s going to, because digital technologies make things possible that weren’t possible before,” she explains.

2. Work in Diverse Teams

When it comes to large projects, CIOs have always needed input from a diverse collection of businesspeople to be successful. The best have developed ways to convince and cajole reluctant participants to come to the table. They seek out technology enthusiasts in the business and those who are respected by their peers to help build passion and commitment among the halfhearted.

Digital transformation amps up the urgency for building diverse teams even further. “A small, focused group simply won’t have the same breadth of perspective as a team that includes a salesperson and a service person and a development person, as well as an IT person,” says Ross.

At Lenovo, the global technology giant, many of these cross-functional teams become so used to working together that it’s hard to tell where each member originally belonged: “You can’t tell who is business or IT; you can’t tell who is product, IT, or design,” says the company’s CIO, Arthur Hu.

One interesting corollary of this trend toward broader teamwork is that talent is a priority among digital leaders: they spend more on training their employees and partners than ordinary companies, as well as on hiring the people they need, according to the SAP-Oxford Economics survey. They’re also already being rewarded for their faith in their teams: 71% of leaders say that their successful digital transformation has made it easier for them to attract and retain talent, and 64% say that their employees are now more engaged than they were before the transformation.

3. Become a Consultant

Good CIOs have long needed to be internal consultants to the business. Ever since technology moved out of the glasshouse and onto employees’ desks, CIOs have not only needed a deep understanding of the goals of a given project but also to make sure that the project didn’t stray from those goals, even after the businesspeople who had ordered the project went back to their day jobs. “Businesspeople didn’t really need to get into the details of what IT was really doing,” recalls Ferro. “They just had a set of demands and said, ‘Hey, IT, go do that.’”

Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants.

But that was then. Now software has become so integral to the business that nobody can afford to walk away. Businesspeople must join the ranks of the IT consultants. “If you’re building a house, you don’t just disappear for six months and come back and go, ‘Oh, it looks pretty good,’” says Ferro. “You’re on that work site constantly and all of a sudden you’re looking at something, going, ‘Well, that looked really good on the blueprint, not sure it makes sense in reality. Let’s move that over six feet.’ Or, ‘I don’t know if I like that anymore.’ It’s really not much different in application development or for IT or technical projects, where on paper it looked really good and three weeks in, in that second sprint, you’re going, ‘Oh, now that I look at it, that’s really stupid.’”

4. Learn Horizontal Leadership

CIOs have always needed the ability to educate and influence other leaders that they don’t directly control. For major IT projects to be successful, they need other leaders to contribute budget, time, and resources from multiple areas of the business.

It’s a kind of horizontal leadership that will become critical for businesspeople to acquire in digital transformation. “The leadership role becomes one much more of coaching others across the organization—encouraging people to be creative, making sure everybody knows how to use data well,” Ross says.

In this team-based environment, having all the answers becomes less important. “It used to be that the best business executives and leaders had the best answers. Today that is no longer the case,” observes Gary Cokins, a technology consultant who focuses on analytics-based performance management. “Increasingly, it’s the executives and leaders who ask the best questions. There is too much volatility and uncertainty for them to rely on their intuition or past experiences.”

Many experts expect this trend to continue as the confluence of automation and data keeps chipping away at the organizational pyramid. “Hierarchical, command-and-control leadership will become obsolete,” says Edward Hess, professor of business administration and Batten executive-in-residence at the Darden School of Business at the University of Virginia. “Flatter, distributive leadership via teams will become the dominant structure.”

5. Understand Process Design

When business processes were simpler, IT could analyze the process and improve it without input from the business. But today many processes are triggered on the fly by the customer, making a seamless customer experience more difficult to build without the benefit of a larger, multifunctional team. In a highly digitalized organization like Amazon, which releases thousands of new software programs each year, IT can no longer do it all.

While businesspeople aren’t expected to start coding, their involvement in process design is crucial. One of the techniques that many organizations have adopted to help IT and businesspeople visualize business processes together is design thinking (for more on design thinking techniques, see “A Cult of Creation“).

Customers aren’t the only ones who benefit from better processes. Among the 100 companies the SAP-Oxford Economics researchers have identified as digital leaders, two-thirds say that they are making their employees’ lives easier by eliminating process roadblocks that interfere with their ability to do their jobs. Ninety percent of leaders surveyed expect to see value from these projects in the next two years alone.

6. Learn to Keep Learning

The ability to learn and keep learning has been a part of IT from the start. Since the first mainframes in the 1950s, technologists have understood that they need to keep reinventing themselves and their skills to adapt to the changes around them.

Now that’s starting to become part of other job descriptions too. Many companies are investing in teaching their employees new digital skills. One South American auto products company, for example, has created a custom-education institute that trained 20,000 employees and partner-employees in 2016. In addition to training current staff, many leading digital companies are also hiring new employees and creating new roles, such as a chief robotics officer, to support their digital transformation efforts.

Nicolas van Zeebroeck, professor of information systems and digital business innovation at the Solvay Brussels School of Economics and Management at the Free University of Brussels, says that he expects the ability to learn quickly will remain crucial. “If I had to think of one critical skill,” he explains, “I would have to say it’s the ability to learn and keep learning—the ability to challenge the status quo and question what you take for granted.”

7. Fail Smarter

Traditionally, CIOs tended to be good at thinking through tests that would allow the company to experiment with new technology without risking the entire network.

This is another unfamiliar skill that smart managers are trying to pick up. “There’s a lot of trial and error in the best companies right now,” notes MIT’s Ross. But there’s a catch, she adds. “Most companies aren’t designed for trial and error—they’re trying to avoid an error,” she says.

To learn how to do it better, take your lead from IT, where many people have already learned to work in small, innovative teams that use agile development principles, advises Ross.

For example, business managers must learn how to think in terms of a minimum viable product: build a simple version of what you have in mind, test it, and if it works start building. You don’t build the whole thing at once anymore.… It’s really important to build things incrementally,” Ross says.

Flexibility and the ability to capitalize on accidental discoveries during experimentation are more important than having a concrete project plan, says Ross. At Spotify, the music service, and CarMax, the used-car retailer, change is driven not from the center but from small teams that have developed something new. “The thing you have to get comfortable with is not having the formalized plan that we would have traditionally relied on, because as soon as you insist on that, you limit your ability to keep learning,” Ross warns.

8. Understand the True Cost—and Speed—of Data

Gut instincts have never had much to do with being a CIO; now they should have less to do with being an ordinary manager as well, as data becomes more important.

As part of that calculation, businesspeople must have the ability to analyze the value of the data that they seek. “You’ll need to apply a pinch of knowledge salt to your data,” advises Solvay’s van Zeebroeck. “What really matters is the ability not just to tap into data but to see what is behind the data. Is it a fair representation? Is it impartial?”

Increasingly, businesspeople will need to do their analysis in real time, just as CIOs have always had to manage live systems and processes. Moving toward real-time reports and away from paper-based decisions increases accuracy and effectiveness—and leaves less time for long meetings and PowerPoint presentations (let us all rejoice).

Not Every CIO Is Ready

Of course, not all CIOs are ready for these changes. Just as high school has a lot of false positives—genius nerds who turn out to be merely nearsighted—so there are many CIOs who aren’t good role models for transformation.

Success as a CIO these days requires more than delivering near-perfect uptime, says Lenovo’s Hu. You need to be able to understand the business as well. Some CIOs simply don’t have all the business skills that are needed to succeed in the transformation. Others lack the internal clout: a 2016 KPMG study found that only 34% of CIOs report directly to the CEO.

This lack of a strategic perspective is holding back digital transformation at many organizations. They approach digital transformation as a cool, one-off project: we’re going to put this new mobile app in place and we’re done. But that’s not a systematic approach; it’s an island of innovation that doesn’t join up with the other islands of innovation. In the longer term, this kind of development creates more problems than it fixes.

Such organizations are not building in the capacity for change; they’re trying to get away with just doing it once rather than thinking about how they’re going to use digitalization as a means to constantly experiment and become a better company over the long term.

As a result, in some companies, the most interesting tech developments are happening despite IT, not because of it. “There’s an alarming digital divide within many companies. Marketers are developing nimble software to give customers an engaging, personalized experience, while IT departments remain focused on the legacy infrastructure. The front and back ends aren’t working together, resulting in appealing web sites and apps that don’t quite deliver,” writes George Colony, founder, chairman, and CEO of Forrester Research, in the MIT Sloan Management Review.

Thanks to cloud computing and easier development tools, many departments are developing on their own, without IT’s support. These days, anybody with a credit card can do it.

Traditionally, IT departments looked askance at these kinds of do-it-yourself shadow IT programs, but that’s changing. Ferro, for one, says that it’s better to look at those teams not as rogue groups but as people who are trying to help. “It’s less about ‘Hey, something’s escaped,’ and more about ‘No, we just actually grew our capacity and grew our ability to innovate,’” he explains.

“I don’t like the term ‘shadow IT,’” agrees Lenovo’s Hu. “I think it’s an artifact of a very traditional CIO team. If you think of it as shadow IT, you’re out of step with reality,” he says.

The reality today is that a company needs both a strong IT department and strong digital capacities outside its IT department. If the relationship is good, the CIO and IT become valuable allies in helping businesspeople add digital capabilities without disrupting or duplicating existing IT infrastructure.

If a company already has strong digital capacities, it should be able to move forward quickly, according to Ross. But many companies are still playing catch-up and aren’t even ready to begin transforming, as the SAP-Oxford Economics survey shows.

For enterprises where business and IT are unable to get their collective act together, Ross predicts that the next few years will be rough. “I think these companies ought to panic,” she says. D!


About the Authors

Thomas Saueressig is Chief Information Officer at SAP.

Timo Elliott is an Innovation Evangelist at SAP.

Sam Yen is Chief Design Officer at SAP and Managing Director of SAP Labs.

Bennett Voyles is a Berlin-based business writer.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.
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Cloud Computing: Separating Myth From Reality

Misa Rawlins and Krishnakant Dave

Across industries, many enterprise leaders believe and understand that cloud computing is here to stay. Globally, public cloud services market revenue is projected to reach US$411 billion by 2020, compared with $260 billion in 2017, according to research firm Gartner, Inc. Cloud technology in all its forms—software, platform, or infrastructure as a service—is rapidly becoming essential to the needs of business today. With cloud computing, organizations can simplify IT, save costs, scale rapidly, drive standardization and user adoption, and start getting ahead of tomorrow’s needs when it comes to customer engagement, the supply chain, the workforce, a simplified finance function, and more.

Despite the short- and long-term advantages, some executives remain uncertain about the next steps or have lingering questions about the benefits of moving to the cloud. For many leaders, separating the cloud myths from the facts can prove daunting. Start here, with these insights that can help you bust big myths about the cloud and start moving confidently toward a cloud-enabled transformation of your organization.

Myth No. 1: Moving to the cloud is too costly. “Costly” is a relative term. The cloud can be costly – but costs should be weighed against benefit and return once requirements and migration plans are in place. Rapidly evolving business demands, for example, can dramatically alter cloud-related requirements. Meanwhile, new technologies are dramatically redefining the art of the possible with the cloud. Because migrating to the cloud is not a true “plug-and-play” proposition, and many enterprise leaders underestimate what a migration or implementation involves, some organizations can be surprised by the costs of a cloud transformation. Without a clear understanding of the potential benefits—without a clear business case for moving to the cloud—the focus on costs can overshadow the return on investment. Knowing the value that cloud solutions can bring—not just the costs—can help manage expectations.

Myth No. 2: The benefits of the cloud aren’t substantial enough. As vendors adopt a “cloud-first” stance for many solutions and product updates, organizations that move to the cloud may have a competitive advantage—no matter the size of the enterprise. Cloud solutions continue to offer abundant and increasing functionality. And with the help of an end-to-end solution provider, you can configure cloud solutions to the specific needs of your industry and your business. For larger organizations, rapidly deployable cloud solutions can help support growth or the unique needs of certain business units, such as new acquisitions or foreign subsidiaries, for example. For smaller organizations, the cloud can help you position your organization to tap new opportunities and tame growth challenges.

Myth No. 3: Cloud is too risky. All digital technologies and all business models come with inherent risk. In a hyperconnected world, no system is immune from cyber attacks, insider threats, data leakage, or related risks. No transformation project is a guaranteed success. Market changes, new competition, regulatory issues, and other factors can require you to change your cloud strategy overnight.

Because the risks are real, take advantage of resources and capabilities that can help reduce risk and ensure that your technology investments align tightly with clear business objectives. The maturity of the software goes a long way toward mitigating risk with cloud projects. You can add an extra layer of capabilities such as managed cloud services to provide active, hands-on oversight of cloud applications and infrastructure—helping you to avoid service interruptions and address issues proactively.

Myth No. 4: Cloud computing is still an immature technology. Like other evolving technologies, cloud is advancing every day. Those who wait for the next generation of cloud offerings may find themselves missing out on tangible benefits as competitors leverage cloud technology to sharpen their edge. Across industries, leading organizations are not waiting. Many view cloud technology as evolving but necessary, and they are leveraging it effectively today. Some, for example, are tightly integrating cloud software solutions to streamline supply chain processes, boost information transparency, and improve decision-making across the board—all the while tapping the cloud benefits of cost savings and scalability. Others are confidently turning to infrastructure solutions delivered and running solutions in a private or hybrid cloud. Still others are turning to cloud platform solutions to extend the power of existing applications, build modern analytics platforms, or support new Internet of Things business models. Turning the cloud to your advantage may depend less on the maturity of the technology and more on the power of your imagination.

Myth No. 5: Moving to the cloud will be easy. Cloud technology can help organizations streamline and simplify their IT landscapes and their business processes, reducing needs around capital expenses and infrastructure while helping to save costs. But migrating to the cloud requires more than simply plugging in technology. It requires an ability to address a host of considerations—data migration, the business-specific capabilities of solutions, change management, governance, systems integration, security, and more.

A cloud transformation is more than a plug-and-play project or a traditional system implementation. It requires progressive thinking and an ability to align technology with your business needs and processes— for today and for the future. Migrating to the cloud is a journey. Moving forward with the cloud will require a vision of your “to be” state—your destination—as well as a strategy for getting you there.

To learn more, and to find out what IDC thinks about the future of the cloud, please read this study that presents a strategic blueprint for enterprises on their digital transformation journey.

For more information on how to simplify innovation with cloud technology, learn more about SAP Cloud Platform.

Ready to reimagine the potential of the cloud? Contact us to get the conversation started.

Contact Krishnakant Dave at kdave@deloitte.com and follow him on Twitter: @kkdave

Contact Misa Rawlins at mrawlins@deloitte.com and follow her on Twitter: @misa_rawlins

www.deloitte.com/SAP

SAP@deloitte.com

@DeloitteSAP

This article originally appeared on Deloitte.com and is republished by permission.

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Misa Rawlins

About Misa Rawlins

As a senior manager and consultant in Deloitte’s SAP practice, Misa Rawlins enjoys helping her clients not only to figure out how to solve their current business problems, but also to envision how a modern cloud platform can transform their organizations moving ahead. Within the practice, she has specifically chosen to take a leadership role around the sales and delivery of SAP S/4HANA Cloud because she considers it the wave of the future. She has made it her mission to deeply understand this technology to better advise clients on what moving to a cloud infrastructure really means.

Krishnakant Dave

About Krishnakant Dave

As a principal in Deloitte’s global SAP practice, KK Dave is a consulting leader for Deloitte’s largest clients; part of the U.S. SAP leadership team where he spearheads Deloitte's cloud offerings; and leader of global go-to-market efforts in the wholesale distribution and manufacturing sector. In these roles, he assists clients in their business transformation journeys using the absolute latest SAP toolset, which presently comprises SAP S/4HANA, SAP Cloud Platform, and SAP S/4HANA Cloud, among other technologies.