Future Enterprise Leadership Strategies

Will the Laws of Thermodynamics Pave the Path for the Future Enterprise CIO?

How long will CIOs have to stay at the top of their game as change leaders in the face of uncertainty?
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Over the past year and a half, CIOs and their teams have been tested like never before. In my recent IDC eBook, Understanding The C-Suite Agenda: Technology Leadership in the Future Enterprise, I argued that CIOs are unique in that no other role in the C-suite has been defined by as much rapid, continuous change and uncertainty. I also argued that no other C-suite leader has been afforded the same “bird’s-eye view” of the enterprise and this rich and unique perspective is more applicable today than ever before. While the latter is most certainly true, the idea that CIOs have “seen it all” with respect to change and uncertainty may be both premature and hyperbolic.

The world of enterprise technology moves exponentially, the possibilities are almost limitless, and complexity is on the rise. It’s almost like enterprise technology is governed by the laws of thermodynamics and the concept of entropy which can be thought of as the degree of order or disorder in a system (more on this later). With each successive wave of digital discovery, the tension of complexity, ambiguity, and opportunity becomes more pronounced. So, at the risk of sounding pessimistic when much of the world experiences an easing of pandemic-related pressures, I’d venture to bet that the true test for CIOs and their change leadership acumen lies ahead.

CIOs Rule!

The speed and success of the pivot many companies made in the face of a global crisis is a testament to the leadership skill of the CIO and the dedication of their teams – not just in the moment, but also leading up to the pandemic building out the capabilities to deliver the resiliency to survive such a crisis. By most all accounts, CIOs and their teams rose to the occasion and delivered leadership and results that can only be characterized as heroic.

The unlucky truth for the heroes is that a yeoman’s job done means a yeoman’s job ahead. The bar has been raised! In the words of one CIO we spoke with recently, “COVID has turned out to be a burning platform that’s made us move faster than we ever thought possible. We’ve had to deliver more, by necessity. We’ve made networks more resilient globally. We’ve strengthened our security posture. Technology is the glue and the critical enabler now.”

If IT can do what it did during a crippling pandemic, imagine what it can do in better times? No doubt this is the current thinking of many CEOs and business leaders. The pandemic has been widely viewed as a digital accelerant leading to a step change in visibility and credibility for CIOs who artfully orchestrated an unprecedented level of change to keep their organizations operating. Post pandemic reverberations, however, are creating new conditions of intense ambiguity and uncertainty leading to a host of new challenges and opportunities for CIOs to think about and act on. Let’s consider a few of the conditions likely to shape the leadership path ahead for CIOs.

The Future of the Economy and Supply Chains

Many economists posit a strong economic rebound in the wake of Covid. Demand for goods and services in many sectors is expected to surge, however, inflation is now part of the dialog. The Consumer Price Index is showing a year-over-year increase in the U.S. at a level not seen since 2008. The Automobile Association of America (AAA) has reported that gasoline prices topped $3 per gallon for the first time in several years, and prices for food, prescription drugs, vehicles, and housing are on the rise. On balance, the pundits seem confident that the risk of hyperinflation is low but nonetheless, there is ongoing debate and concern.

In a recent discussion with more than a dozen C-level leaders on IDC’s Global Research Advisory Board, a poll revealed that a heavy majority believe we are poised for mediocre growth in the 1-3% range globally and that growth will be uneven. Add to this stock market volatility and geopolitical concerns and you have another recipe for fear, uncertainty, and doubt.

CIOs are bound to face increasing pressure from business peers either to leverage digital technologies to capitalize on demand in a post-pandemic boom or use them to drive greater efficiencies in the face of economic fragility.

Moreover, the supply chain disruptions that occurred early in the pandemic have given way to what appears to be a more enduring set of supply and demand challenges. Major shortages of chips and technology for the automotive market, rising costs for shipping and raw materials, skyrocketing costs for packaging, and significantly altered import/export dynamics are becoming the new norm.

Enterprise leaders are likely to look to the CIO for help improving supply chain visibility, monitoring, automation, and ecosystem participation and innovation. The next frontier for CIOs is likely to include a considerably deeper dive into industry-specific solutions that promise greater enterprise resiliency and differentiation.

The Future of Work

Almost overnight companies made a remarkable transition to remote work. Now, with pandemic pressures easing, companies are preparing for what’s next, and this is turning out to be a bit of a delicate exercise. If you ask the employee in the trenches, the mid-level manager, a talent industry expert, or a CEO, the answer is likely to be the same. The future of work is going to be “hybrid.”

While there is considerable interest in bringing workers back to the office, there is also some angst. In the words of one CIO from a global insurance company, “The transition to remote is probably going to be easier than the transition to hybrid.” Another CIO from a multinational professional services firm noted “It will be a different mindset that must be planned out carefully. We will have a hybrid model and we will have to rationalize opinions. It will be a big impact on IT. We would like to get back to an office environment, but surveys have shown that remote work is effective.” Yet another executive we spoke with raised an important, related question: “Will hybrid work create a caste system of haves and have nots?” Rationalizing views between those who support hybrid and those who feel workers should return to the office is a concern for CIOs – so much so one CIO advised that “We need to prepare for the worst-case scenario.”

Whatever balance is achieved, another shift into uncertainty looms. Moreover, lingering skills shortages are raising another issue few want to talk about – burnout! How long can IT organizations sustain productivity and innovation at the level of the past several months before some percentage of employees hit a wall, and what will the fallout be when they do?

Get out your Physics Book

So how long will this “burning platform” smolder and how long will CIOs have to stay at the top of their game as change leaders in the face of uncertainty? The optimist in me says not long but the realist says welcome to the “new normal.” The concept of entropy in thermodynamics is an apt metaphor I believe to describe the leadership challenge ahead for CIOs. In the simplest way of describing it, entropy is the degree of disorder in a system. Entropy can never decrease, all systems tend toward higher entropy, and the only equilibrium is the state of highest entropy. Does this sound like a description of where things are headed? With the exponential growth of technologies and connectedness, it’s hard to imagine a simpler world but it’s not much of a leap to envision one characterized by less predictability and order than today.

So where am I going with this? The already dynamic role of the CIO as technologist, transformer, and change artist is only likely to get more dynamic in a future progressing to greater entropy. Unforeseen business disruptions, new waves of technology, and new challenges and opportunities will lurk around every corner of our digital world.

To succeed, CIOs will need to double down on creativity and vision and leverage new tools and mindsets to hone entropy-killing powers enough to make sense of things, at least temporarily, and make the right bets at the right time. Maybe it’s time to dust off the manager’s guide to scenario planning – a military inspired method for opening the minds of business executives and leaders about possible events in the future, even though no plan survives “first engagement.” Maybe it’s time to promote and embed design thinking to enable a “bottom up” approach to address ambiguous problems and solve for human-centered needs. And maybe it’s time to marry design thinking with “top down” systems thinking to give leaders a richer tapestry to assess the scale and impact of potential changes.

Will these or other methods and techniques be the entropy-busting breakthroughs CIOs need to chart a path to the Future Enterprise? I will be exploring these ideas in the upcoming webinar,Understanding The C-Suite Agenda: Technology Leadership in the Future Enterprise“, live on June 29th at 11 AM/ET.  In this webinar, learn what CIOs will need to do to make the leap from trusted technology service provider to strategic business partner. Do you have what it takes to be the CIO of the Future Enterprise? Click the button below to register.

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Chris Goodhue

Vice President, CIO Strategy