Preparing for Inevitable Upturns

You're talking about innovation. That's been another tough thing for CIOs this year. How should business and IT leaders move from being in the trenches to preparing for the inevitable upturn?

The fifth lesson in the book is, "Never Waste a Good Crisis." The way you waste it is to say that everybody is going to get a 15 to 20 percent cutback in expenses, so we'll just hunker down until we get through this and restore our budget. That's wasting an opportunity.

How do we use the crisis? When people know we have to cut back, how do we use it to transform the company? If you're in the travel and hospitality business, for example, obviously you've been hurt badly. How do you get out in front to become more appealing to your customers?

Lesson No. 7 is, "Go on Offense, Focus on Winning Now." You need to play to your strengths--the company's, not just IT's. How can IT help the company win in the marketplace?

Too many people are like sailors at sea. When there's a huge squall, they take down the sails and go underground and wait for it to pass. I'm on the board of Exxon-Mobil. Exxon always invests in downturns. When the price of oil goes down, that's when they invest--and when they make their best investments. But when they come out of the difficult times, they have the refineries up and running and the oil exploration up and running. It's the same with Intel. Intel has always invested in downturns.

Motorola didn't, and now they're out of the semiconductor business, and Intel's going strong. So think about making the investments. Don't wait until you come out of it because then it's too late. You want to put in a new enterprise system or customer-facing system? That takes time. You don't do that overnight.

Lesson No. 4 is, "Get Ready for the Long Haul." There's no short-term, quick fix. You need to have a long-term plan. You have to make the investments. The time to make them is now, when everyone else is in crouch-mode and pulling back. You need to be out in front of the game leading so you can use those investments to your advantage.

Back to the disconnect between what business and IT leaders think about each other. How IT savvy is the current league of business executives?

They're certainly not IT experts. I think the progressive ones, like John Chambers at Cisco, are really on top of it. The aggressive ones really know how to use the technology. John Lechleiter at Eli Lilly is a research scientist who became CEO. He's using technology to communicate with people all around the world. He can't go see those people all the time. What if there's a crisis? How do you get out and tell people? The progressive executives are using IT to be in touch with people all the time, in real time.

The organization of the future is going to look much more like the Internet than like a military hierarchy. We're moving steadily away from the hierarchy, and the faster we move, the better. We need to go to more of an Internet-type structure, where there's not just a central core everything flows out from, but it's much more interactive between the nodes and the system. That's the way people are operating: on a 24/7 basis. It's that kind of world.

I'm also on the board of Target. Target has 400,000 employees, mostly in the U.S. But they have people buying in the Far East and Africa, and they need to be in instant touch with those people. Why? Because they want to get goods moved to market faster. If they can get goods in three weeks and competitors take three months, Target's going to beat them. They see trends--they see what's happening and they see where they need to move quickly.

The executives need to be IT savvy to know how it becomes an integral part of their strategy. A lot of IT executives think of their strategy for IT. I don't think they can have one. It's really about the company's strategy to use information for competitive advantage.

This article was originally published on 10-26-2009
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