For our first post of 2006, we’re starting way upstream of IT – by looking at what CEOs’ top business priorities are for the coming year. After all, it’s these priorities that will ultimately drive corporate IT investments in the months ahead.
With this goal in mind, in December we asked over 200 line-of-business (LOB) executives to indicate which among a long list of business improvement initiatives top their CEOs’ agendas for the year ahead. The top five responses are listed below, along with how each ranked in last year’s survey.
As you can see, the most interesting shifts – compared with last year’s list – are the surge in focus on product innovation, as well as on improving the IT organization. The former supports what we’ve been seeing in the past year or more: a shift in many businesses from cost-cutting as the lead strategy, to more aggressive growth-oriented strategies – driving more executives’ attention toward improving product (and service) innovation flow and hit rates. The growing focus on improving product innovation makes sense, considering that it sits upstream of virtually all other business activities: shaping the business’ value proposition, defining much of the company’s differentiation, and directly impacting profitability as well as sales and marketing productivity.
The jump in priority for improving the IT organization is also a big deal. Indeed, for those who bought into the “IT Doesn’t Matter” theory, this finding may be surprising. What’s the reason behind the jump? The survey didn’t directly address that, but my suspicion – from many discussions with business executives – is that it’s yet another sign that LOB executives increasingly “get it”: that there are few process innovations (including both those that drive out costs and those that drive top line growth) that don’t depend on IT as a core part of operations.
In 2006, one of the most intriguing opportunites for CIOs and IT suppliers alike will lie in putting these two priority areas together, using management’s drive to improve innovation productivity as a catalyst to invest in IT that better supports high-volume, high-productivity innovation.