To meet customer and investor demands, and raise enterprise-wide performance, executives require the ability to establish a new performance frontier, encompassing the organisation itself as well as key suppliers and partners.
Enterprise-wide performance is the focus of dynamics. Executives change enterprise performance by creating new relationships among organisational units and information, technology, skills and other elements.
The 2007 Gartner EXP CIO Survey captured strong business demand over the next three years for new ways of working. Changes to attract customers, expand the use of information, and improve business processes all point to expectations that the way business works in 2007 will have to change by 2010.
The potential of dynamics
Dynamics create the potential for innovating new ways of working, using information in new ways and enhancing the enterprise’s change management capability. Enterprises undermine their capacity to change when they use strategic transformation techniques for non-strategic changes. This situation occurs when executives have only two ways to manage change: strategic transformation and tactical improvement.
When changes are too big to be tactical, they become strategic by default and require a burning platform. Executives using this approach find themselves regularly setting the enterprise afire, which is not attractive to customers or employees.
Dynamics give executives a way to describe and manage change programmes that reach beyond tactics but do not require mobilising the enterprise for transformation. Dynamics focus only on changing how people work, enabling executives to connect the scope of change with business issues readily recognised by the workforce. Filling this middle ground gives executives a change management approach appropriate to the scope of the change and reserves the burning platform for true strategic transformation.
Dynamics projects are distinguishable from strategy and tactics in their focus, scope and approach by the following characteristics: they change a company’s performance frontier; they solve a problem or enable an opportunity; they have an open scope; they centre on information and how it is used; they are innovative; they put greater emphasis on the operating model than the business case.
Understanding the distinctions between strategy, tactics and dynamics expands how executives can think about enterprise performance. Dynamics connect strategy with how the enterprise operates. Strategic decisions flow into dynamics changes and then tactics. Using dynamics, executive teams can manage changes to the way the enterprise works, defining the new shape of the enterprise and a way to implement on-the-business changes.
Where CIOs fit in
CIOs are prime candidates for leading enterprise dynamics, given their knowledge of enterprise operations, experience implementing change and access to the resources needed to monitor and manage operational performance.
Trust and credibility are two qualities that are especially important when incumbent CIOs look to reshape their relationships and responsibilities on the executive team. CIOs also will need to strengthen or build their relationships with the CEO and other key executives prior to gaining responsibility for enterprise dynamics.
In essence, a CIO who effectively can see, lead and make the operational changes involved in enterprise dynamics will possess the following: an enterprise focus; an integrated view of operations; an operational view of how things actually work; a multiyear focus; and change capabilities.
Changing the way the enterprise works requires working smarter with new skills, tools and responsibilities for the CIO. These responsibilities expand CIO responsibilities into areas traditionally outside of IT.
These changes also require CIOs to alter their job description as they delegate existing responsibilities, acquire new responsibilities and resources, and change their relationships in the enterprise and on the executive team.
Andrew Rowsell-Jones is vice president and research director for Gartner’s CIO Executive Programs.