In This Issue:
Should the CIO Lead Strategy as Chief Strategy Officer?
At Dunkin' Brands Group, the company that owns Dunkin' Donuts and Baskin Robbins, CIO (Chief Information Officer) Jack Clare will now also be the company's Chief Strategy Officer, according to the Wall Street Journal's March 25, 2015 CIO Journal article "Dunkin' CIO to Lead Corporate Strategy." The article reports that "Along with leading the company's IT department, Mr. Clare will now oversee the company's long-term strategic planning process." It also says, "He will join the firm's Leadership Team ...who directly advise the CEO."
Digital technology has experienced explosive growth, and its role is expanding. But, a key question arises after reading the Wall Street Journal article: Should the CIO lead strategy as Chief Strategy Officer?
Maybe yes. Maybe no. The answer will depend on a various factors, including the individual background and skills of the CIO and what it means to lead strategy in a particular company.
With digital's ever increasing role, companies that adopt new technology in effective ways can often reap tremendous rewards. As a result, information technology issues continue to gain importance at top executive levels. And, the executive level will need to tap the kind of information technology expertise that a CIO can bring. Thus, a technology executive, such as the CIO, can be a valuable contributor at the highest levels of a company's leadership.
Along these lines, technology will become a more crucial component in business strategy development. This can involve areas such as dealing with potential threats of disruption, integrating digital technology like social media and apps into the business, tapping the tremendous value of Big Data, and dealing with future technological advances like the Internet of Things. Since changing technology can bring both opportunities and threats to a business, companies must determine to what degree and how the latest technology will be integrated into their strategies.
The role of technology in successful strategy can vary depending on the specific characteristics of the business. Since technological change can spawn vast new markets and even entirely new industries, many successful business strategies will be highly driven by new technology. On the other hand, some companies have remarkably successful strategies that are not as heavily driven by new technology, and may even emphasize aspects of older technology, such as bricks and mortar rather than ecommerce. Additionally, there are companies that too heavily embraced new technology and ended up with costly, ill-fitting strategies that brought devastating results. In all of these situations, however, the key point is that technology must be appropriately integrated into a company's strategy, and how to best do that depends upon the specifics of the business.
So, with their valuable technology expertise, CIOs are in an excellent position to make a substantial contribution to strategy development. However, this does not necessarily mean the CIO should lead strategy or be Chief Strategy Officer. Still, some CIOs may be well qualified to lead the strategy process when that leadership role primarily entails process facilitation. And, in some cases, CIOs may be well equipped to oversee a team of data scientists that contribute heavily to strategy. But, although CIOs can serve in a valuable advisory role or be major contributors to strategy, they may or may not be an appropriate choice to lead strategy.
Essentially, there are both pros and cons to making a CIO the Chief Strategy Officer. The big advantage: a CIO brings valuable expertise in information and technology that is becoming such a critical piece of many strategies today, as was discussed earlier in this newsletter. But, technology is not the only factor that drives successful strategy, even in today's increasingly digital world. So, although a CIO's deep background in technology can be so valuable, it may also bring disadvantages.
With a focus on technology, a CIO may be less well versed in various other strategic factors that can drive business growth. Furthermore, with a background so tied to technology, a CIO may be prone to overemphasize its role. As a result, there is the possibility of being overly ambitious with technology investments that fit the company poorly. And, in the quest for a business strategy that embraces changing technology, valuable opportunities that are not as technology driven might be missed.
Even in today's digital era, success can come from lower tech approaches. For example, although digital media has experienced explosive growth, there are still some underlying strengths regarding the marketing effectiveness of print.
The return of a J.C. Penney catalog, which was discussed in the past issue of this newsletter, is a good example. Penny brought back a smaller version of its previously discontinued catalog after learning that shoppers were often first attracted to print before eventually going online to buy.
Another example was described in the March 12, 2015 Wall Street Journal article "Retailers Can't Shake Their Circular Habit" by Suzanne Kapner. It points out that inserts in the print editions of newspapers are still a popular way to distribute coupons to consumers, even though print newspaper circulation is down considerably. The article explains that newspaper inserts, though costly, remain popular because consumers are much more likely to look at and use print coupons than digital coupons.
Both Penney's catalog and newspaper coupons are examples indicating that there are still signs of marketing effectiveness for print. This raises a question: is print being too readily abandoned in favor of digital? And, if a CIO is Chief Strategy Officer, will questions like this get too little attention and be overshadowed by the quest for digital based strategies?
Successful strategies incorporate new technology as is appropriate. But, they will include non-digital approaches, if appropriate, as well. A CIO who can integrate these two approaches may very well be successful as Chief Strategy Officer. On the other hand, if a CIO as Chief Strategy Officer tends to place such high value on the technical to the point of disregarding beneficial non-digital approaches, the company's strategy can suffer. So, the answer to the question of whether the CIO should lead strategy as Chief Strategy Officer is: it depends. Nonetheless, no matter who leads strategy, the kind of technology expertise that a CIO brings must be properly integrated with other elements of business strategy.
La Grange Park, IL