By the end of this decade, businesses will undergo a dramatic transformation—away from the stove-piped functions of the industrial era and into to a very different type of entity, fueled by the principles of systems theory. Along with all other business functions, IT will be profoundly changed by this transformation. While we don’t know exactly what the resulting IT organization will look like or how it will work, we can safely predict that IT leaders must prepare for this new reality or they will be the victims of any new structure that appears.
These disruptive changes in business structures also present great opportunities for IT. I suggest, for instance, that a much more empowered role is possible for CIOs that will not only put them in a leadership position to advance the interests of the new organization, but will also provide a brighter future for themselves and their staff.
To illustrate that modern businesses need an overhaul, I look back in history to the start of the industrial economy in the 1700s that has heavily influenced the structure of corporations—and continues to do so even today! The specialization and functional separateness that we see today are the direct result of the reductionistic philosophy of René Descartes, and the physics of Sir Isaac Newton. In the early 1900s, however, quantum physics established that the world is not exactly as Sir Isaac Newton envisioned it. As the physicist, Fritjof Capra, explains:
In contrast to the mechanistic Cartesian view of the world, the world view emerging from modern physics can be characterized by words like organic, holistic and ecological. It might also be called a systems view, in the sense of general systems theory. The universe is no longer seen as a machine, made up of a multitude of objects, but has to be pictured as one indivisible, dynamic whole whose parts are essentially interrelated and can be understood only as patterns of a cosmic process.
My point is that while the thinking of quantum physics has already affected fields such as economics, biology, environmental science, and psychology, it has had little impact on how we structure companies. I believe that this thinking will change by the end of this decade, as companies begin to discover new ways to put people and groups together interdependently. As they do, corporations will begin to realize — at long last —their original intent to have people work together for the good of the whole.
Leading Interdependent Organizations
Piloting the move toward interdependent organizations will be what I call the “strategic resources group.” And at the head of this organization will be the general manager of strategic resources — a possible successor role to the CIO. The IT, HR, and strategy functions will report to this position.
This person will report to the CEO and will greatly extend the value that these functions provide independently. Stated simply, we will put the strategic resources of people and information/knowledge together with the means of employing these resources.
The CIO Perspective
Why is the CIO best equipped to serve as the general manager of strategic resources? I maintain that the CIO already has a general management view of the business, as he or she looks out and sees how the work of the enterprise is performed horizontally across functions. No other group or executive has this same perspective.
Following this reasoning, next step is for the CIO to sell the concept to senior management, demonstrating that they have the skills to perform the duties of the position. Specifically, the executive-level skills of leadership, effective communications, influence, relationship-building, and problem synthesis are most needed.
Especially critical is knowledge and skill in the strategy area. There are a number of basic ways the CIO can acquire this capability, such as attending university classes, studying good strategy books, engaging a strategy coach, and attending strategy-related conferences.
And it’s a good practice to share these ideas with senior management by communicating their relevance to the corporation. In so doing, the senior executive team sees the CIO acting in a new, broader role and begins to form an impression of the CIO as a person who knows and values strategy, and has something that he or she can contribute to the company as a result.
Elevating Corporate Strategy
Clearly, the time has come to do away with the traditional stovepipes of the industrial era. The structure I envision accomplishes this, and as a result, delivers greater value to the corporation. It also establishes a place for a strategy function that is vitally important, but has struggled to find its proper role in the corporation.
Some might see parallels in the current trend among companies creating a chief strategy officer (CSO) position. But I believe the general manager of strategic resources is a vastly better alternative, because it greatly extends and strengthens the CSO role by also encompassing the corporation’s strategic resources.
For these changes to be realized, CIOs must aggressively sell the concept and prepare themselves for this new role by developing the necessary skills. Without these, they will neither be elevated to the new position, nor be effective once they are chosen to perform it.
The future of the CIO role could remain muddled for some time, but CIOs should not stand around waiting to see what happens to them and to the IT organization. Instead, they need to lead the transformation taking place and serve as a focal point for interdependent, not siloed, organizations.
Pete DeLisi is Academic Dean of the IT Leadership Program at Santa Clara University and principal at Organizational Synergies where he advises IT executives. He is a member of Smart Enterprise Exchange and can be reached here.