Last year, I recommended embarking on a digital transformation project with a service company (that could complete the actual work) and explained that an expensive, fancy PowerPoint created by a management consulting firm would likely not be able to create any real, tangible value.
Today, we’ll focus on the types of leaders who can be catalysts for (rather than hinder) true digital transformation.
Why The ‘I’ Matters More Than The ‘T’
Businesses and people within them are becoming more and more dependent on their technology (T) (cue checking your iPhone). Today, technology is no longer a competitive advantage; rather, it is the baseline to operate a business — something that’s part of general office maintenance. As soon as the cloud exploded, the T no longer created a competitive advantage because all businesses now expect to have information in the palm of their hands.
Information (I) is becoming more important for organizations, with the role of linking all departments together and communicating with outside stakeholders more effectively.
As your business evolves, you should consider that the person who manages the information should have a seat at the director’s table to help to leverage technology within and across departments. The more departments communicate in real-time, the more individual players can contribute to the growth of the business by focusing on activities that add real value.
The good news is that in the last decade there has been an explosion of cloud solutions for midmarket companies. You just need to decide what information you need so that the best solution can be created for you in order to leverage multiple systems to create your organization’s unique mix.
CFO Vs. CTO
Here we will explore the general traits of the two C-level roles. These are not set in stone. Yes, you can have a CFO who has the mindset of a CTO or technical-minded COO. So treat this section as a guideline, not an attack on any type of person.
The role of the CFO has been largely unchanged for the last 30 years. They are a true pillar in any company, relied upon to maintain cash flow, conduct critical financial planning, manage financial risks on behalf of the company and more. The financial models and ratios used are largely unchanged. The balance sheet and the P&L statement have not changed in the last century. The truth is, this is not the problem. What is a problem, however, is the mindset that comes with the status quo being unchanged for such a long time. CFOs generally believe that the investment in technology for the company is an expense.
The CTO, on the other hand, is intended to lead the technology and/or engineering department, leveraging technology to enhance the offering of the company and streamlining business processes. The job title is new. The challenges are new, and the options for them to move forward are also new — and ever-evolving. The argument must be made that any investment into technology within the company should be considered an asset that should be amortized over time — just like patents, trademarks and copyrights.
The only constant in technology is that there is and always will be change. You may quickly see that if the task to change is given to the person with the least experience with change, things might not change.
The Catalyst For Growth
The reason I wanted to write this post was that in recent months, I noticed that many businesses that were having problems with their digital transformation projects were depending on the wrong decision-makers (perhaps the most important ones were simply “too busy”).
The real issue comes down to the mindset that technology is an expense, not an asset. If these companies treated it as an asset, they would pay attention and invest in developing the asset to help shape the future of their companies. Unfortunately, for the companies that are not successful, this often comes from the static mindset of the CFO who was hired to help the company grow.
Expecting your CFO to be the catalyst for your organizational growth is like expecting your doctor to recommend crystals for treating allergies. It may work, but the likelihood is not so positive. It seems logical enough, but I keep meeting business owners who expect their CFOs to magically be both CFOs in their heads and true CTOs in their hearts, driven to take chances and invest in the future of the companies.
My advice: Hire the CTO before the CFO if you want your organization to benefit from the investment of your digital transformation, or ensure the person in charge of IT is sitting with the grown-ups (not at the kiddie table). If you decide to hire a COO instead of a CTO, they have to be smart and hands-on when it comes to technology.
The bottom line is that you need to ensure your CEO understands the roles and responsibilities of the CFO and CTO positions (and their interdependence) and that technology is an investment on an asset, not an expense.
Now make the commitment to invest in your future: information!
Read the Forbes article here.