The 4 Zones Model: A Playbook for the Performance Zone
The CIO is not a “Device Santa Claus”
My good friend and technology futurist, Thornton May, clearly defined the CIO’s role when he said “…the role of the CIO is not to be a ‘Device Santa Claus’ but, rather, to craft an environment which empowers executives to create competitive advantage vis-à-vis the innovative and informed use of information technology.”
A recent McKinsey & Company survey of business and IT leaders validated that when CIOs play an active role in shaping their company’s business strategy both IT’s and the company’s overall performance greatly improve. However, when business executives were asked how well IT supported key business activities like entering new markets and driving new revenues, only 35% agreed IT played that role in their company down from 57% in the same survey two years ago.
If actively engaging the CIO in helping to shape a company’s business strategy works so well, then why are so many companies not doing it? My answer is that they don’t have a “good decision-making governance process” that aligns future IT investment priorities with critical business outcomes.
The Performance Zone: Demonstrating the Business Value of IT
The 4 Zone Model I’ve developed ( link to earlier blog http://eepurl.com/blFb3T ) is designed to enable CIOs and their senior leadership teams to maximize the business value of IT across their organizations. IT’s charter for the Performance Zone in particular is to provide new user-centric tools, services and solutions e.g., social, mobile, cloud and data analytics that improve the competitive performance of each of the company’s lines of business.
To effectively demonstrate IT’s ability to directly contribute to generating new revenues and profits, CIOs and their leadership teams must actively engage their internal business partners and users. To activate this new process, I propose that they utilize the Collaborative IT Governance Model below.
The Collaborative IT Governance Model
From my early work in this area, I have seen first-hand how effective this model is in breaking down hierarchical, silo-based decision-making processes and converting them into horizontal cross-enterprise decision-making processes. It enables all the key stakeholders to be aligned with and committed to a common course of action to deliver the desired business outcomes. It has also dramatically increased the speed to market and throughput of major IT developmental projects.
It’s An Outside-in Approach Not An Inside-out Approach
To effectively deploy the collaborative IT model, you need to start with a common understanding of what you want the ultimate user experience to deliver to customers, employees, supply chain partners and other key constituents.
Historically IT has started with the technology it has and added to it. This inside-out approach is fine if your goal is to modernize your Systems of Record and optimize the cost of maintaining them. However, if your goal is to provide “friction-free” customer engagements then you must take a very different approach.
This outside-in approach begins by getting all the key stakeholders to address three fundamental questions:
- What are the key moments of customer engagement that define the success of our business or company?
- Who or what system represents our company at this moment of engagement?
- How could we strategically intervene with a new system of engagement in order to make that moment of engagement more compelling and enduring?
Some companies I’ve worked with have used a “customer touch point” mapping exercise to identify all the different touch points and eliminated those that they felt added no value to the customer. They then looked for opportunities to enhance the value of critical touch points and finally they identified gaps where they could add new touch points.
In all cases, it has been gratifying to see that when these models and tools have been utilized they have successfully demonstrated the business value of IT in multiple business growth venues.
In my next blog, I will take a deeper dive into the Incubation Zone and talk about how you can deploy our Three Innovation Playbooks model to significantly increase the ROI on your portfolio of IT investments.
As always, I am interested in your comments, feedback and perspectives on the ideas put forth in this blog. Please e-mail them to me at pdmoore@woellc.com.
