Mark McDonald

A member of the Gartner Blog Network

Mark P. McDonald
GVP EXP
8 years at Gartner
24 years IT industry

Mark McDonald, Ph.D., is a former group vice president and head of research in Gartner Executive Programs. He is the co-author of The Social Organization with Anthony Bradley. Read Full Bio

Why does diversity become division and division become destruction?

by Mark P. McDonald  |  April 16, 2013  |  2 Comments

That was the thought running through my head this morning. The more I look around, the more I see what was a diversity of opinion, ideas, backgrounds, ethnicities, religion etc. become division and destruction.

Diversity has become division in so many areas, social, lifestyle, politics based on class warfare, geo political conflicts, religions wars, economic and military aggression, red/blue states, north/south, high/low income.  Rather then recognizing the diversity as a desirable fact of the human condition, it seems like we are creating artificial divisions to define “us” as “not them.”

Division is a convenient reason to avoid tough choices, to come together, to give and take, to collaborate and to see the world from as broad a set of viewpoints as possible.   You see that in all of the spheres mentioned above and frankly the strength in diversity, which should be a hallmark of a free society, is too readily becoming division and a means of control and coercion.

Division is one of the ways I am thinking about in terms of what happened in Boston and why someone(s) would attack an essentially human and positive activity.  The Boston Marathon runners, everyone, represented the best aspects of the human condition, discipline, sacrifice, working toward a personal goal that was more than themselves, an achievement, etc.  The people at the finish line were encouraging them on, celebrating their determination and recognizing what they were accomplishing.  There was no ‘them’ at the finish line.

An attack in Boston, shootings in a school, bombs in Bagdad, London, Madrid, Africa, etc., each requires dividing and separating yourself from the world to a degree that destroys meaning and value for all of us.

This is not a naïve view.  The world is not perfect, nor the people in it.  There will be competition and disagreement.  We all play a part in that.  We all compete, we all have disagreements, we all advocate for our beliefs and values.  That is what diversity is all about and that is good.

Diversity does not have to mean division that creates destruction.  That only happens when we deny the diversity innate in the human experience and decide that being different means being less.

There is no ‘us and them’ …  only WE.

Worldwide Everybody

That is what I am thinking this morning.  What’s on your mind?

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Category: Personal Observation     Tags: ,

Playing to Win by AG Lafley — a book review

by Mark P. McDonald  |  April 15, 2013  |  Comments Off

Playing to Win is highly recommended as perhaps the first and one of the few books you should ever read about business strategy.  Penned by the former CEO of P&G (AG Lafley) and the Dean of the Rothman Business School (Roger Martin) this book takes the esoteric and jargon based world of strategy and drives down to its essential questions, challenges and success factors.  AG spoke at last year’s Symposium CIO Lunch in Orlando and this book is recommended.

Highly recommended for any business leader, manager or student who wants to get an in depth look at the realities of strategy from one of the more important and dynamic companies in the world.

  • Chapter 1 Strategy = Choice – a fundamental principle that is lost on most people who create strategies that are really plans.
  • Chapter 2 What is winning? – perhaps the toughest choice to make particularly in a company facing significant change.
  • Chapter 3 Where to play – deals with the markets you enter, their nature, needs and dynamics
  • Chapter 4 How to win – looks at value propositions and sources of advantage
  • Chapter 5 Playing to your strengths – the operational nature and needs of the business, what it does well, needs to do well and what can be done by others.
  • Chapter 6 Managing what matters – the systems, approaches, memes necessary to engage and guide the organization at every level.
  • Chapter 7 Thinking through strategy – a imagination and reapplication of Porter’s 4 forces model
  • Chapter 8 Shortening your odds – inverting the strategy process to create greater choice and capacity for change
  • Conclusion The endless pursuit of winning

Overall the book is a good mix of business practice and experience with academic insight and rigor.

Strengths

The book filled with examples, discussions and stories regarding the choices and challenges Lafley faced at P&G.  The situations are particularly well positioned in the context of the strategy process and approach – a real plus for readers asking how might this apply to me.

Effective use of consumer products as an industry and market we all understand and participate in.  Some may find the B2C examples a little limiting for their company but I would suggest that you need to consider that every business is becoming more B2C.

Complete and comprehensive, the book does not skip steps, gloss over frameworks or fail to cover items in the process and approach.

Brief and informative.  At fewer than 250 pages, Playing to Win is the epitome of what a business book should be – just long enough to be valuable, but short enough to be accessible.  This could and other strategy books are, giant tomes that bog down.  This is a read ready for busy people.

Challenges

The P&G culture pervades the book that may give you a false sense that this only works for P&G.  This is a context and to some extent a bias that you will need to consciously read through to get at the essence of the things that are happening, the decisions being made, the actions taken, etc.

There is not a lot of explicit discussion around technology and IT although technology pervades the choice space and core capabilities.  CIOs should read this book to better understand business strategy and with they fit in rather than use it as a justification for technology being part of the business strategy.

Covers some familiar ground, particularly in the context of common terms and ideas.  Experienced business people and students of strategy will find this repetitions but this should not get in your way.

Concentrating on strategy formulation and not strategy execution, so some wanting to ask ‘what now’ may find the book a little limiting.  This is a strategy formulation book and a great one.  Other books about change management, deployment, execution, implementation, investment etc. are out there and this book’s focus is really appropriate for the subject area.  Otherwise this would be a 500-page book that no one would read.

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Category: Book Review Strategic planning Strategy     Tags: , ,

Can the CIO be the Chief Digital Officer? Yes if they make the role their own

by Mark P. McDonald  |  April 12, 2013  |  3 Comments

The CIO is more qualified than most for the emerging position of Chief Digital Officer (CDO) as they have an intimate and operational understanding of how the enterprise and customers use technology.  CIO experience is a strength, but in an area that is off target for the way the popular media, among consultants and in many executive teams position the CDO role.  A CIO needs to make the CDO their own if they hope to make their case.

Technology > IT.   The CDO is about how technology will support growth.  The CIO has been about how IT will reduce, control and manage cost.   The two questions are not mutually exclusive but its not immediately obvious that being good at one means that you should be entrusted with the other.  That is the transition CIOs need to make in advocating for their taking the CDO role.

How can someone who has concentrated on cost, consolidation and integration in the ‘back of the house’ be expected to be successful in generating growth with consumer oriented technologies?

It’s a tough question and one that cannot be answers by restating the CIO’s qualification or making the case that the CIO should be responsible for all technology in an enterprise.  Such territorial arguments fail in the face of the need to create growth, innovation and experience – all things that business executives think of when they think of the common CIO.  You need to position your experience, skills and qualifications to prove that you are anything but a common CIO.

The uncommon CIO is a natural CDO

The uncommon CIO has the potential to be a CDO, so making the CDO role your own requires building up a role from your uncommon qualifications.   Fortunately CIOs are uncommon executives and too often the best-kept secrets in the corporate world.

Creating value through technology is common to every one of the different types of CDO roles and the target of making that role your own.  It must be the focus of making the role your own and you the obvious choice as CDO.

Here are a few thoughts on things that can help you think through how you make the role your own.

Emphasize execution

Putting thoughts, ideas and innovation into action is critical for two reasons.  First, creating results through execution is essential to digital technology as there is neither the time nor the repository of proven practices to sit back and wait.

You do not have to be the first mover, but you do have to move and that requires execution.  Second, inertia is the most common complaint business executives level against their CIO so its an issue you have to take head on – often by dispelling the idea that you are old, slow and not concerned about the pace of business.

A good tactic here is to think about the times when you and IT have done little things quickly to solve business and operational issues.  Most CIOs forget about them in the face of large projects, but it’s the constant stream of little things that best reflect the reality of execution in a digital world.

Highlight the value rather than the budget

Concentrate on the stream of channel, product and customer changes you have made over the last 18 months.  CIOs spend too much time and assign too much of their credibility to the size of their budget.  That is the way bureaucrats justify their existence and the CDO should be anything other than a bureaucrat.

Instead of talking about the size of projects, their global and transformational impact, talk about the major business metrics you have moved over time, the stream of business value you are responsible for creating.  Remember that business value of technology comes in changing performance, something it is easy to lose sight of in the daily grind.

Avoid digital isolation. 

The possibilities for digital strategy are great, but too often the can lead to digital tragedy as company’s narrow themselves and miss opportunities.   Narrowing the possibilities is a good idea to gain focus.  Most will seek to narrow by focusing on specific digital technologies – like analytics – and ignore the rest.  This is a common tactic in digital strategy and recommended by among digital consulting firms for obvious reasons.  The problem is that digital isolation too often limits digital value and reinforces existing business models

CIOs recognize that the power of digital technology comes in combination.  Your organization recognizes this too – only too late – when they ask for integration after the fact. You can avoid the disruption and redesign because you know how things come together.

CIOs see mobile, social, analytics as coming together to change products, services, experiences and operations.  Emphasize that in making the case, as you know how to deliver combinations at scale rather than just creating prototypes.

Be inclusive and expansive!

Creating value through technology requires a team approach that results in a blended organization – kind of like the Brady Bunch – from two previously incompatible organizations.  Technology is the face of the brand in digital technology.

The CDO is a connector and creator not an organizational robber baron.  Recognize and make the case for how you view Marketing, Communications, Sales Operations, Product Development come together into a collaborative and virtual core digital organization.  Avoid an approach that adds those roles to IT an approach that tells others you think digital technology is just the same as IT technology.

Down play how you have ‘run IT like a business’

This seems counter-intuitive because digital business is a technology intensive business.  But the nature of a digital business is different than running an internal function in a business like manner.  Quasi P&L’s with internal customers, chargeback/allocation revenues are not the same.  So unless you have a real externally facing P&L its better to talk about how you create value with technology than stake your claim and credibility on this point.

Make the CDO role your own

Organizations looking to create a Chief Digital Officer should seriously consider the CIO as a valid and valued candidate.   Making the case for the CIO to become the CDO requires recognizing that there is a new production function for Technology.  That production function centers on the realities of growth and digital technology where speed is critical, scale is essential and choice.  Speed, Scale and Choice must replace being on time, on budget and on scope because digital technology is not the same as IT technology.

Success with digital technology requires more than strategies for spending money launching social marketing campaigns, ‘boiling oceans of data’ or unplugging the workforce.  Focusing a digital strategy and plan around those investments limits these technologies to an enabling role – warming over the traditional IT model.  Making the CDO role your own breaks through that barrier to engage in leading a real digital business.

 Related posts

Can the CIO be the Chief Digital Officer? Crafting the right role

The Chief Digital Officer, you may not need one.

Chief Digital Officer, What type does your organization need?

Chief Digital Officer – who should they report to?

 

 

3 Comments »

Category: CIO Digital Edge Digitalization     Tags: , , , , ,

Technology as Brand and Brand as Technology

by Mark P. McDonald  |  April 11, 2013  |  Comments Off

Brand matters.  Regardless of the definition of Brand,  as an identity, market promise, a message, image etc., the face of your brand is changing.  The face of your brand is technology.  Not just any technology but specifically digital technologies like mobile computing, consumer devices, social media and things we have not even thought of yet.
Here are a few thoughts about the relationship between Brand and Technology, welcome your comments and contribution:

Technology is where everyone is going.

Brand demands attention. Wherever attention goes Brand must follow.  Technology transmits attention.  It is the new Band frontier where everyone is an immigrant.  It is ‘undiscovered country’ where people spend time and therefore where I have to be.

Technology is the measure of Brand equity and effectiveness

We create attention by taking up space in the channel.  We pay for eyeballs.  We pay for what others present to customers.  We really want to pay for results, what they do.  Action determines Brand effectiveness. Action generates Brand equity. Today we measure both with crude measures of  time spent on smart phones, social media, etc.  It’s a start but technology provides unprecedented precision to measure behavior and experience.   So, go where everyone else goes, but look beyond the size of the crowd for things that others cannot see.

Technology builds Brand from the outside in.

Markets may be conversations according to the eCommerce Cluetrain Manifesto with a focus on an exchange of product offers with personal needs.  The Internet opened the door for constant conversation.  The eCommerce channeled the conversation. Social media amplified everyone’s voice digitally drowning out the official voice.   Losing control of Brand does not mean mob rule, rather it requires you to re-imagine and rebuild Brand for the outside in.

Brand AND technology

Marketers and Communications people think of technology as the channel for the message and Brand.  Increasingly technology is part of the Brand, not the platform on which the Brand struts its stuff.   Technology is the face of your Brand, it’s the first impression, what people see, what they use to judge the Brand even before you open your mouth, play the Flash video or ask for people to push “Start”.

Technology fills the Brand Canyon

Brands conveys the promise of  an offering’s value proposition shaping and setting expectations and the stage for execution.  Executing on the brand promise was left to operations.  Your people, their processes, facilities, partners, etc. delivered the Brand promise, or not.

Companies create a ‘Brand Canyon’ when execution fails expectations.  The canyon swallows marketing spend, sales expense, customer service and margin.  The gap disappears when Brand and Technology converge.  Who you are becomes who you want to be and Brand becomes self-evident.

Technology and Brand together forever?

Technology has always been behind Brand.  Passively as a means of communication in the world of mass media and IT.  Actively tomorrow in the sense of collaboration that makes a Brand what we make it.  We the people, them the products and us the promises.

What do you think?

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Category: Digital Edge Digitalization marketing     Tags: , , ,

Can the CIO be the Chief Digital Officer? Crafting the right role

by Mark P. McDonald  |  April 10, 2013  |  9 Comments

YES, even H3LL Yes.  But just because you are the CIO does not mean that you are the Chief Digital Officer by default.  They are two different jobs with significant potential for synergy/overlap depending on how you think about it.  By the way the CDO role has significant potential overlap with a number of other C-level positions so the decision to make the CIO the CDO is by no means a given.

One in five, specifically (18%) of CIO’s say that they are their organization’s Chief Digital Officer according to CIO responses to the 2013 Gartner CIO Survey.   That is a great start but the role is new so there is room for creation and crafting.

This is the first in a series of posts related to CIOs becoming CDO’s.

Success with digital technology is more than creating an electronic veneer on products, processes and offerings.  It requires more than digital substitution, the old atoms for bits argument of a decade ago.   It requires creating new combinations of digital and physical resources that create customer value and result in company revenue.  That is a digital edge.

CIOs wanting to be Chief Digital Officers need to start by creating the environment that leads to crafting the right role.  The time to act is now, as there is a lot of interest and energy around organization demonstrating ‘digital leadership’ by appointing a digital leader.

Can you standup a candidacy to be CDO?

Start with standing.  Do you have the right to participate and engage in the CDO conversation?  Standing comes from two sources: professional and personal.  It is better to have both, than rely on one or the other.

Professional standing confers the CIO with the role in the organizational discussions and process around creating a CDO.  Is the CIO role positioned in the current organization to be considered for an expanded set of responsibilities?  Chances are if the CIO reports to the CEO or COO or President then yes.  That is the vast majority of cases (80%) according to the 2013 Gartner CIO Survey.  If the CIO reports to the CFO, which is 20% of the time according to the survey, there may not be the organizational standing to have the conversation.   That is not the end of the world, but it removes an arrow from your quiver requiring greater reliance on the CIOs personal standing on the executive team.

Personal standing is the strength of relationships among the executives and the confidence/trust the CEO has in the CIO on a personal basis.  Personal standing gives you the right to have the private conversations, the discussions and explore the possibilities outside of formal organizational policy or protocol.  If you have more personal than professional standing, you need to take the CEO to lunch to talk about digital strategy, how to avoid digital tragedy and how you envision the company’s success in the first decade of digital.

Next look to see if you even need a Chief Digital Officer in your enterprise.  Its not a given and in some cases dangerous to concentrate authority, resources and responsibilities into a single role when digital value requires coordinated and combinatorial solutions that cut across organizational and operational silos.  In cases where there is no need to create a CDO role because the executive team can effectively collaborate across strategy and execution, then get going, pick some goals and start working on your digital edges.

Make the chief digital officer different

Conferring new responsibilities to old roles is not a path to success.  That is organization by search and replace.  Saying you are a chief digital office does not make you one.  Chief marketing officers who redefine their role by replacing “marketing” with “digital marketing” or “channel” with “digital or Omni channel” are no more a CDO than strategy officers who replace “strategy” with “digital strategy”.  Your organization needs more than a CDO in name only.  That type of generic title-replacement surgery did not work well for eCommerce or for Business Processes and it will not work well in digital.

The old adage – if you have seen one, then you have seen them all – should not apply to the CDO.  Each enterprise should be concentrating on building unique digital capabilities.  The new adage should be “If you have seen one CDO role then you have seen ONE CDO role.”  Work with a palette of responsibilities based on the type of role described below.

There are different types of CDO’s with different levels of responsibilities (revenue or policy) and different levels of resources (line or staff).  The different types outlined below are described more fully in a prior post entitled “Chief Digital Officer, What type does your organization need?” 

Those types include:

  • Chief Digital Business Officer – responsible for generating new revenue from digital resources and operating lines of business.
  • Chief Digital Marketing Officer – responsible for developing programs to grow digital revenues via coordinating staff resources.
  • Chief Digital Strategy Officer – responsible for developing and deploying digital strategy from a line position on the leadership team.
  • Chief Digital Champion – leading digital transformation from within the organization.

These role types represent a starting point for making your case to be the Chief Digital Officer.   Take these roles, break them down and blend them into a role that fits your organizational context and your standing as a CIO.  A blend is required as the logic behind the following will not be enough.

Digital technology is technology

The CIO is responsible for technology, therefore

The CIO should be the Chief Digital Officer

The logic above might get you named the first CDO, but it will not keep you there, nor create value for your enterprise.

The current CIO role, like very current role in the enterprise, is missing elements and attitudes of being an effective Chief Digital Officer.  Elements related to revenue, P&L, innovation, product development, sales, pricing, etc. that are not part of the standard CIO role.  The CDO requires working in an indeterminate and volatile environment with different attitudes about delivery, time to market, speed, agility, willingness to fail, learning, tolerance for some waste, etc. that is not naturally part of IT.   That is why its not a simple title transfer, a quit claim deed to go from CIO to CDO, it takes more and that starts with defining the destination by selecting the right role – for your organization and for yourself.

More to come, but what do you think?

Should the CIO see them as the CDO?

Do they have ‘first claim’ on the role?

Is it too late to make the case?

Related posts

http://blogs.gartner.com/mark_mcdonald/2013/04/12/can-the-cio-be-the-chief-digital-officer-yes-if-they-ma…

9 Comments »

Category: CIO Digital Edge Digitalization     Tags: , , , , ,

A short soapy story or how laundry soap is an allegory for digital disruption

by Mark P. McDonald  |  April 8, 2013  |  1 Comment

Is Innovation Killing the Soap Business? is the title of a great article in the Wall Street Journal’s Paul Ziobro and Serena Ng.   The article talks about the overall market impact of P&G’s new product innovation – Tide Pods.  The product that provides precise ‘unit doses’ changes the dynamics of the laundry industry.  Compared with pre-pod levels, detergent sales are down 5.1% raising the questions about innovation and growth.  Normally the two go together, new products drive the product category, but in this case the opposite is happening.

Get used to it as that is happening as organizations increase the digital nature of products, services and offerings.  When I read the story it became an allegory for what digitalization can do in other markets and with other product categories.  First, please read a short soaping story and then continue to an analysis of why everyone needs to pay attention to this soapy story.

The Short Soap Story

In short, Tide Pods is different from prior product innovations.  Innovations like concentrated detergent supported market growth as consumers bought more and often used more detergent that necessary. Tide Pod changed that by providing an exact amount of detergent that works particularly well with new high capacity washing machines.

People are buying less detergent because they are using exact amounts rather than guessing.  According to the article the market is shifting towards Tide Pods which are earning a larger margin even though consumers pay about 25% more per dose than regular Tide and pay 287% more than discount detergents. The product is more profitable for P&G as it caries a higher wholesale price, but less profitable to retailers as there is little room for mark-up.

Hence the more Tide Pods sells the smaller the category and its profitability to retailers grows, but the more margin P&G makes.  Raising the question “How can a new product be good when it is hurting the total category?”

This soap story is an allegory for digital disruption.

The story of soap is one of the stories of digital technology and how can disrupt markets, companies and industries.  Tide Pods provide a precise measure that takes advantage of high tech washers and eliminate overconsumption.  The combination of product precision on the attracts consumers willing to pay a premium for knowing that they are not wasting detergent or wasting the capability of their high tech washers.

Exact dosing, giving people exactly the right amount, at the right time and in a convenient way is the essence of every digital product or service.  It is the definition of digital context as people recognize the value of personalization, efficiency and associate themselves with using new technology.  The result is that the most profitable part of the market moves first and fast taking growth and margin with them.

You know you have disruptive innovation when everyone else cries foul as a new product drains profit pools can market share.  Digital disruption comes when the combination of digital and physical resources create new products, services, offerings or operations that change the nature of access, economics or performance.  In this case exact dosing changes economics and performance disrupting market incumbents.

Precision will be increasingly important in the first digital decade as everyone wants exactly what they need, they do not have to waste their time, resources or money (its ok for you to) and they feel its personalized to them.  Precision represents one of the techniques for creating digital disruption.

Innovation creates change, choices and comprehensive value.

Innovation is not killing the soap business.  Innovation may be killing your business.

Innovation does not have to grow the market.  All innovation does is leave the market better off, not necessarily bigger, but definitely better off.

Markets that rely on a measure of customer ‘waste’ are particularly susceptible to precision-based products.  Digital technology will create precision products and market disruptions.  This is what makes this story allegorical. P&G did it by changing the physical characteristics of their product and eliminated their reliance on overuse to generate growth and profits.  What is possible in your company, industry, and market?  Who will get their first with new digital precision based resources that make the competition cry foul.

Related posts

Digitalization creates new dimensions for disruption

7 years of lean, IT’s time in the innovation desert is over

The Digital Edge in Retail

 

 


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Category: Digitalization Innovation     Tags: , , ,

Digital Technology and the Board of Directors

by Mark P. McDonald  |  April 5, 2013  |  2 Comments

A board of directors assumes two responsibilities to represent the interests of shareholders.  The first is as an advisor to company regarding its strategy, operations and plans.  The second responsibility revolves around  governance and oversight of operations and performance.

Boards have traditionally dealt with information technology (IT) within the oversight responsibility by assigning IT to the Audit Committee.  That needs to change. Digital technology (DT) success rests not with how much you spend, but in its strategic and operational focus.  Many things are possible with digital technology so the real question, the real issue is what is profitable.  In other words, where IT was a board oversight concern digital technology is an advisory and innovation concern.

The Board of Directors can serve as one of the resources for companies formulating their digital edge. The following is an edited excerpt from the book The Digital Edge: exploiting information and technology for business advantage.  It highlights this issue as well as provides a sample of the material in the book.  The views expressed in this blog post are my own and do not represent legal advice or a formal position of Gartner.

Boards are increasingly interested in technology.  However, Boards often assign their interest to the Audit Committee which translates technical issues into financial, operational and control frameworks that fit their responsibility profile and the abilities of  audit committee membership.   Boards take this decision as they see  technology as an enabler and oversight as a matter of risk, budget and compliance. This was an appropriate approach for IT projects like a major ERP projects that represented significant operational and financial risk.

Placing technology  in the Board’s Audit Committee reflects a view that technology is more of an operational expenditure than a creator of strategic opportunity. This may have been appropriate when the majority of technology issues were IT-related and concentrated on back-office operations.  IT related investment risks company and board reputation if they failed.

Digital technologies, like analytics, social media, mobility and cloud are different. These technologies represent the company’s virtual brand and reputation and therefore directly connect technology with reputational risk, revenue and relevance.  Digital technology requires a different Board -level focus.

Organizations who are serious about building a digital edge need to be serious about the role of technology and innovation across the enterprise. A technologically savvy Board provides plays a critical role in digitalizing the business.  As one executive put it, “We have a technology-savvy board of directors. Several of them have direct experience working in e-commerce companies, using technology to disrupt the industry. Their experience and knowledge have been central to the big decisions we have made, like purchasing a software company. They have given us a different view of the company. Rather than seeing the company in a traditional lens competing in traditional ways, the Board and executives saw the latent value of our digital resources and capabilities that led to new strategic options.”  That result will not come by placing digital technology in the Audit committee.

Below is a sample charter for an Innovation and Technology Advisory Board.  It is based on a review of multiple charters accessed via the Internet.  The charter outlines the responsibilities and mechanisms for Boards to increase their engagement on digital and technology issues.  It is offered to provide some substance around the issue of how Board’s advise and oversee digital technology and innovation.

Technology Advisory Board of Directors Charter (GENERIC SAMPLE)

Purpose

The purpose of the Technology and Innovation Oversight Committee is to:

    • Provide oversight and counsel on matters of innovation and technology;
    • Recommend on major strategies and subjects related to technical and commercial innovation;
    • Appraise major innovation and technology related projects and architecture decisions;
    • Recommend and advise on innovation and technology acquisition processes;
    • Ensure that the Company’s innovation and technology programs effectively support the Company’s business objectives and strategies;
    • Advise the Company’s senior IT management team; and advise the Board of Directors on innovation and technology related matters.

Membership and Subcommittees

    • The Innovation and Technology Oversight Committee shall consist of such number of members of the Board of Directors as shall be appointed by the Board from time to time, but in no event shall the Committee consist of fewer than three members.
    • The Board of Directors shall designate the Chairperson of the Committee. The Board of Directors may change the membership of the Committee at any time.
    • Unless otherwise prohibited by the Company’s Certificate of Incorporation or Bylaws, the Innovation and Technology Oversight Committee may form and delegate authority to any subcommittee as it deems appropriate or advisable.

Functions, Powers and Responsibilities

The Innovation and Technology Oversight Committee shall:

Projects

    • Appraise and critically review the financial, tactical and strategic benefits of proposed major projects and technology architecture alternatives.
    • Appraise and critically review the progress of major technology related projects and technology architecture decisions.
    • Make recommendations to the Board of Directors with respect to technology related projects and investments that require Board approval.

Security

    • Monitor the quality and effectiveness of the Company’s technology security.
    • Periodically review and appraise the Company’s technology disaster recovery capabilities.

Internal Controls

    • Monitor the quality and effectiveness of technology systems and processes that relate to or affect the Company’s internal control systems.
    • Periodically report to and consult with the Audit Committee of the Board of Directors regarding technology systems and processes that relate to or affect the Company’s internal control systems.

Advisory Role

    • Advise the Company’s senior management team on innovation and technology issues.
    • Stay informed of, assess and advise the Company’s senior management team with respect to new technologies, applications and systems that relate to or affect the Company’s innovation and technology strategy or programs.

Other

    • Unless the Committee determines that fewer meetings are required, the Committee will meet at least two (2) times per year.
    • Annually review the Committee’s own performance, and report the results of such review to the Board of Directors.
    • Annually review and reassess the adequacy of this charter and recommend any proposed changes to the Board of Directors for approval.
    • Report regularly to the Board of Directors on matters within the scope of the Committee, as well as any special issues that merit the attention of the Board.
    • Perform such other duties as are necessary or appropriate to ensure that the Company’s innovation and technology programs effectively support the Company’s business objectives and strategies, or as the Board of Directors may from time to time assign to it.

On the surface, these responsibilities seem similar to those already assigned to other committees, most notably the audit committee. Digital technologies require a different type of oversight. The difference lies in the skills and focus required on an innovation and technology committee.  IT solutions are often preplanned with a predetermined outcome that can be readily translated into financial frames of reference that is amenable to audit based oversight.

Digital solutions, on the other hand, are complex, combinatorial and creative; making it difficult to predefine, assess and mitigate risk. Digital solutions emerge as digital capabilities build on each other, and therefore cannot be readily preplanned.

Digital technology and digital innovation will play a fundamental role in a company’s performance profile and future.  Technologies like mobile, analytics, social, cloud and sensors will transform the customer experience, operating model, products and services in ways that go beyond automation into radical innovation including their treatment at the Board level.

Related Posts:

Digital edge page on Gartner Books

Digital Business: How Technology Will Support Growth – Forbes

Digitalization creates new dimensions for disruption

Mapping three paths for digitalizing the business

Digital substitution or digital combination?

Digital strategy or digital tragedy

Creating a difference between digital, digitize and digitalization.

Chief Digital Officer, What type does your organization need?

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Category: Digital Edge Digitalization Leadership     Tags: ,

What I learned about IT and DT over the past three weeks

by Mark P. McDonald  |  April 3, 2013  |  Comments Off

I am just back from three-weeks visiting CIOs around the world at various events, one on one meeting and team presentations.  The trip, which ranged from Dubai to London to LA and Phoenix provided an opportunity to get a sense of what is going on with CIOs and IT.  I have already published reflection on the two CIO leadership forums in London and in Huntington Beach, outside LA.   So please follow the links to see those.

Information Technology, what we call IT, has already transformed in most enterprises from a focus on back office accounting and control to front office application and collaboration.  The problem is most of us do not know it and some of us do not want to admit it.

Four “I’s” provide a way to consider how IT oriented leaders think about digital technology.  Information, Innovation, International and Infrastructure represent traditional IT domains transformed by digital technology.  These ideas can represent the four corners of IT’s involvement in a digital world shown in the figure below:

In each of these areas IT has taken a decidedly process based approach.  This became clear during the past three weeks as CIOs discussed digital technology in terms of how does it change the innovation, information management, internationalization (globalization) and infrastructure processes.

Discussions around these ideas from a process perspective quickly devolved into a discussion of ownership, responsibility and control.  For example who ‘owns’ corporate information – an issue exacerbated by analytics and big data technologies.  All extremely valid issues when dealing with back office IT, but increasingly less relevant in handling front office digital technology.

If information, innovation, international and infrastructure represent four “I’s” associated with IT, then are there four “D’s” that come into play in the world of DT or digital technology.  Yes, in the sense that we can think of four other things that become more important in a digital world.  They are Dynamic, Diversity, Devices and Data.  Each of these D’s connects and encompass at least two of the I’s creating a circle shown in the figure below:

These D’s change the context of the I’s in IT and in the process they shed light on the broader landscape of the digital world.  Each of these D’s represents players, dimensions or differences as the world leverages digital technology in the front office.

Dynamic, the world where information meets innovation

Rapidly evolving combinations of information and innovation make the digital world more dynamic. Dynamic is the mantra for the pace of change and decisions in the digital world.  It points to the fact that CIOs cannot predetermine the plan in a digital world to nearly the same extent as the IT world.  Competitive actions, technology innovations and changing customer demands create a world where being digital requires being dynamic.

Diversity, a source of value when international demands meet innovation

Look at the apps installed on your smart phone.  While many of these apps are the same as your friends, how you use them is unique to you.  This makes the digital world a world of diversity as one size, mass market and prescriptive solutions no longer fit the time, place and way you want to live and work.    Embracing diversity, supporting human ability, influencing behavior are the only strategies for providing an effective digital platform in a global world.

Christopher Hickins at the WSJ translates the digital demand for diversity into a CIO strategy he calls multiversify.   Muliversify describes the need for CIOs and IT to be, do and deliver a spectrum of things rather than just provide traditional IT services and solutions.   In his words:

“CIOs should be focused not on digital processes, but rather on preparing their organizations to operate on different planes, in a variety of analog, virtual, and mobile universes; they should be creating strategies to support a diversification of business models into all of those areas. In a word, they should be seeking to multiversify.”

Devices, connecting international needs with infrastructure

Devices in a world of Digital technology (DT) are numerous and heterogeneous unlike that with IT.  IT assumes a computer as the device and the Internet browser as the interface.  While this represents a plethora of possibilities for rendering the user interface, the range of devices pales in comparison to the digital devices coming on line.  We all know about smart phones, tablets and other ‘PC and near PC like’ devices.  But what about remote sensors, machine generated information and other forms of operational technology.

It will be literally impossible for a single infrastructure to support each individual device in a digital world.  Fortunately the combination of public infrastructure, standards, and service-based architectures provide the means for CIOs and IT leaders to close their infrastructure and open a digital platform .

Data, where infrastructure meets information

Data in the digital world is more than a collection of transactions; it is a source of expression, insight and value.  Data in the IT world is structured, catalogued and controlled.  Data in IT records the results of business activity after the fact.  Digital data is broad in its reach encompassing every type of conceivable source of information either recorded, machine generated or increasingly inferred by other data.   This is the domain of Analytics and Big Data that is transforming data processing from high latent and limited information to encompass as much of the real world and human experience as possible.

Eight words I learned over the last three weeks that describe the Digital future 

Over the last three weeks CIOs have asked about one or more of these I’s and D’s as the demands of digital technology require new views on the use of technology in the enterprise.  These eight words create an awkward but descriptive sentence of the CIO and technologies role.

CIOs need to drive dynamic innovation creating a diversity of solutions that meet the needs of an international market across multiple devices via an infrastructure provisioning data and information for the digital world.

How you make this sentence a reality requires going beyond managing predefined processes to hunting and harvesting for digital value and the basis for the 2013 CIO agenda.

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Category: Digital Edge Digitalization     Tags: , ,

Gartner builds on consumerization strategy

by Mark P. McDonald  |  April 1, 2013  |  Comments Off

London, UK, April 1st, 2013 – Unilever (UNA) maker of the Nexxus line of hair care products announced its agreement with Gartner (IT) to sell the Connecticut based company its Nexxus product line in an all-stock deal.  Industry analysts are confused but interested in the possibilities.  “It seems like a natural extension of the consumerization of technology that a technology company should acquire consumer products.”

“We want you to use Gartner every day and you wash your hair everyday, so the connection seems a natural,” commented one Gartner product manager.  “Besides it makes a natural product extension, our new Nexxus product line goes on your head and Gartner research goes in your head.”  No immediate plans to merge the operations of the two companies were announced.

“It will be interesting to see what the acquisition will do to ‘customer experience’ at symposium and the appearance of Gartner Analysts.  Both present interesting possibilities,” according to Jebediah Springfield  at Simpson and Simpson PLC. Springfield commented that Gartner’s IT events made a unique and unparalleled opportunity to distribute samples and sell products.

Magnus Magnus, president of branding strategies sees an additional benefit to the acquisition for both parties.  “Gartner has invested a lot in the term the “Nexus of Forces” and the Nexxus product line lets them take a virtual digital idea and make it analog and tangible.  At the same time, Unilever further complicates the hair care market as Gartner will now compete with Garnier (www.garnier.com) in the premium hair care market. The name confusion alone is worth the deal.”  Mr. Magnus predicts two immediate changes:

First, Gartner will change the name of its concept to Nexxus, “adding the extra X will make the IT based company seem more hip and relevant to the digital natives.”  Second Gartner will come out with a new line of products aligned with the Nexus now Nexxus themes.  “I can foresee Nexxus Cloud Conditioner that allows you to monitor the moisture in your hair over the web.   Combined with a new Social Media Shampoo that tweets whenever its applied or you receive a compliment on your hair.  The combination would be a truly disruptive personal  product.”  Magnus was unsure of the products that would represent the other forces.  He mumbled something about Big Data foot cream and Mobile Mousse as he walked away from the interview.

Either way, the announcement has shook up the technology world as other firms look to follow the consumerization trend.  Larry Ellison, founder of software giant Oracle was seen in talks with John Paul DeJoria the founder of the Paul Mitchell Hair Care Product Line.  Remarking on their resemblance to each other, the two are talking about other product extensions for example between Oracle and Patron Tequila, as it seems the two products often are consumed together.  Likewise, Meg Whitman, CEO of HP was rumored to be checking her shampoo for possible acquisition candidates.

Jim Creamer from CBNC’s Insane Bucks was reached for comment. “The Consumer market is 70% of the U.S. economy, connecting that economy with the increasingly digital world through cross branded products sounds like more than a hair brained scheme.”

More on this as it develops after today April 1, 2013.

Related April First Press Announcements

Gartner announces a new magic quadrant 

Gartner contemplates dropping the name Symposium in response to pending Greek IP strategy 

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Category: Fun     Tags: ,

The Decision Makers: A book review

by Mark P. McDonald  |  March 27, 2013  |  7 Comments

Business books normally concentrate on clarity, being concise and providing case studies.  The business novel, one that puts ideas into the context of a plot, are rare and too often devolve down into contrived situations, flat characters and preachy plots.  Not this book.  The best business novel around it Goldratt’s classic, the Goal.  Dennis Bakke’s The Decision Maker comes close to that standard and is highly recommended.

The Decision Maker is a business novel that presents new ideas on the way organizations work.  It’s a book that describes MedTech, a fictitious company where the new owners decide to treat people differently.  Rather than assuming people are human inputs into company processes, the protagonist assumes that their people are unique, creative and trustworthy to make decisions on their own rather than deferring decisions and responsibility to management.  Supported by an “advice process” the book then illustrates how this process works for good and for ill.

The book is a good read, fast paced, clear and illustrative of the ideas of a flatter, more decision oriented organization.  If you are looking to understand what it means to go beyond empowering people, then this is a good book to consider.

Overall, highly recommended as a way to begin to think differently about the nature of work, management, responsibility and accountability.    This does not mean that the book does not have its strengths and challenges, see below.  Overall it’s a good introduction of a powerful idea in a novel and engaging way.  Well worth your time to get the ball rolling, but not enough meat to call you into action.

Strengths 

The book provides the background story and support developing the ideas and principles of decision-making.  The principles are exercised across different types of decisions and different situations.

The employees and situations at MedTech are real enough to lend credibility to the situation and the story.

The ideas behind the decision making process are simple, clear and readily illustrated through telling a story rather than a dry business book recitation.

Challenges

There is no coach, no person who helps the reader understand what is behind the ideas which limits their credibility as the concepts appear to emerge from Jim’s mind in whole cloth.  This was a great strength of the Goal and it is a noticeable weakness here.

Everyone wins and all accountabilities are minor. Sure the company faces a significant issue, but the answer is simple and clear making the stress on the system and new ideas rather weak.  The fact that everything works out in the end and there are no real losers in the story weakens the power and practicality of the argument.

The ideas behind empowerment, democratizing decision making and driving employee engagement are more complex, compelling and challenging than the book presents.  Readers should think about the implications on their culture and company, as this book does not provide enough detail and discussion to drive implementation.

Related Links and a Favor

The Consumerization of Management, Part 1

The Consumerization of Management, Part 2

Consumerization compliments and completes the other forms of management

A personal favor, please.  If you found this review helpful, could you please follow  link to this review on Amazon.com, log into Amazon and vote for it.

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Category: Book Review Management Social Organization     Tags: , ,