The Renaissance Strategist

The Renaissance Strategist

As Michael Porter has pointed out in his recent Harvard Business Review article, "Strategy and the Internet," business strategy is a discipline in itself. Strategy is a complex process of building integrated component parts into a system. By itself, IT is not a strategy; nor is the operational efficiency enabled by IT a sustainable strategy. IT has no inherent content, no inherent value. IT functions as an enabler. Renaissance CIOs understand this connection and don't count on technology to do too much. Technology enables, but there must be something to be enabled. Technology, for example, can make a rigid, hierarchical organization more hierarchical, but it can also help a horizontal organization function more aggressively in network mode.

Renaissance CIOs do not view their jobs as providing IT resources to support strategies already in place. A support orientation is purely passive, and it works fine as long as IT has no more than an incremental role to play in strategy. Instead, the Renaissance CIO is right in the midst of the process of formulating strategy, providing ideas on how IT might be used for strategies that are impossible without it. Renaissance CIOs understand that the information systems they conceive today will determine tomorrow's information-processing capabilities, which in turn provide support for the set of future strategies that the firm can choose from.

In the past, IT applications were labeled "strategic" if they involved large amounts of money, lacked a solid economic rationale but executive support, or were being used—for better or worse—by industry rivals and were thus considered required to stay in the game. Renaissance CIOs have never been fooled into thinking that IT investments become strategic through industry fads. They know that IT gains strategic importance only when it supports or augments how the information collected, analyzed and carried by technology can be used to create value. And Renaissance CIOs understand that truly strategic IT—using information (gathered not only through IT infrastructure but through a company's essential business processes) to bolster its strategic options, its capabilities relative to its competitors, and its ability to alter its competitive tactics based on real-time information—is still in its infancy.

The Renaissance CIO maintains a healthy paranoia about competition—that's why Andrew S. Grove, chairman and cofounder of Intel Corp., called his 1996 book Only the Paranoid Survive. Competition can come from anywhere, and it's just as likely to come from a newly formed dot-com or a firm diversifying in an unexpected direction as from an established competitor. LDDS, now part of MCI WorldCom, turned a network of defunct natural gas pipelines into a fiber-optic telecommunications infrastructure—blindsiding many higher-tech competitors. And now, business networking providers are coming under pressure from unexpected sources—cable-based networks in sewers, laser-based wireless networks that shoot information from skyscraper to skyscraper, and data transmissions over electric power lines—even as they now replace their 20th-century infrastructure with expensive 21st-century optical networking technology.

The most useful exercise an insufficiently paranoid company can undertake is to identify the "competitor from hell"—the potential competitor the incumbent would least like to see entering this market, whether it be a current rival or not. Sketching the profile of your worst nightmare becomes an opportunity to identify key capabilities, existing customer and supplier relationships, and scarce resources—not only what they are but where they are in the competitive environment. Such pre-emptive strategic analyses can lead to a strategic acquisition, the formation of an alliance with the potential competitor before it steals a march on you or, if all else fails, a head start on mobilizing a counterattack as soon as the competitor makes its move.

That's why Renaissance CIOs don't allow their view of the dot-coms and what can be learned from them to be clouded by dot-vertigo. The dot-com revolution isn't over just because the latest Nasdaq bubble has burst. The most profound impact of the dot-coms will come in the changes that have been stimulated in very large organizations. Dot-coms tested the traditional assumptions about how organizations worked, stretching the limits of what was possible, forcing businesses to re-evaluate their vulnerability to attacks by smart, technology-enabled entrants. The dot-coms experimented while the larger companies—led by their Renaissance CIOs—learned, and these companies have been changed in ways that may not become apparent until they start competing head-to-head in truly electronic markets.

This article was originally published on 02-04-2002
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