Today’s leaders face obsolescence. They must quickly master the art of building high-performing, innovative cultures or they will be replaced like an antiquated technology.
By Frank Wander
A giant wave is crashing over IT as we know it. Our industry is one where waves regularly come and go, each one pushing something we held precious into the past. We have come to understand that technologies have a limited life span. It is an accepted notion in our industry. But this current wave is different—it is a tsunami, and IT leaders are in danger of being swept away. The technology infrastructure and many applications are already moving outside the enterprise. Talent has quickly become the new competitive weapon. Managing employees as interchangeable parts no longer works. They are not an expense, but a vital asset. Therefore, leaders must either jump onto this wave and ride it, or be washed away as part of the legacy infrastructure.
The implications of this tsunami are inescapable. Just step back, open your mind and observe how the landscape is changing. The corporate business infrastructure is already available in the cloud, including human resource solutions, finance, legal, e-mail, productivity tools, video conferencing, social networking and so forth; the technology infrastructure, including computing, data centers, public and private clouds, storage, networking, and telephony, is a highly competitive space with many choices and continually dropping prices. Mobile applications are burgeoning, with more than 100 billion downloads in 2013, and big data is enabling new forms of predictive analytics and business insights. Ultimately, the notion of Anything and Everything as a Service is quickly coming to pass. We see robust offerings in education, health care, entertainment, marketing, CRM and nearly every aspect of business. Ultimately, whatever can be turned into a service for a profit will be. These solutions will give companies the ability to pay for what they need, scaling services and costs up and down as they grow or decline. Who would have thought traditional taxis, which are licensed to pick up a passenger without a reservation, would be threatened by a startup like Uber. But they are—and in a big way.
The Impact on Corporate IT
These trends will impact today's leaders who got ahead by becoming experts at managing processes, infrastructure and IT services. Simply put, these aspects of the business are a competitive necessity. It is precisely these functions that will become business as a service in the cloud. They are leaving the enterprise forever, changing IT as we know it. The legacy infrastructures built at a great cost have already gone from being a source of competitive advantage to being a burdensome disadvantage. Many companies are weighed down by these costly, inflexible legacy infrastructures that make change both slow and expensive. In contrast, emerging competitors are nimble, with low fixed costs, and possess the ability to pivot from one solution to another as their business needs evolve.
Consequently, enormous changes in IT are visible everywhere. We see the rise of chief digital officers, a title that didn’t exist just a few years ago; we see a strong demand for IT leaders that are strategic; and we see an increasing appetite for innovation, as the need for top line growth becomes paramount. CIOs and IT leaders need to reinvent themselves to add value to organizations that expect them to use technology as a business differentiator. The leaders who embrace and motivate this change are already building the skills of tomorrow. They nurture organizational effectiveness, and have a highly skilled talent infrastructure that collaborates with the business to unlock new innovations, the only enduring source of a competitive advantage.
How Leaders Must Respond
What is a leader to do? Understand that when the smoke clears, you will be left with a large number of service providers, the business systems that support your company’s products and services, and your talent infrastructure. Talent was, is, and will remain the true source of an organization's competitive advantage. It is strategic; it is the difference between success and failure; and it should already be your focus. People count more now than they ever did in the past.