Career Insights|5 Minutes
Why ‘Chief Information Officer’ Will Soon Be Renamed ‘Chief Experience Officer’
Under intense competitive pressure for customers and employees alike, most businesses today are pursuing aggressive digital transformation strategies. IDC predicted that nearly US $1.3 trillion was spent worldwide on digital transformation technologies – namely hardware, software, and services – in 2018, and tips that figure to nearly double in 2021 to reach more than US $2.1 trillion.
Yet despite the vast sums of money that companies are investing in this area a high proportion of these initiatives are doomed to failure – meaning that, one way or another, the expected benefits of these expensive projects (more flexible, adaptive, competitive workplaces) are ultimately unrealized.
With such high stakes, and strong evidence of current inefficiencies, it seems clear that a major rethink is in order.
While there are many reasons why transformation initiatives fail, a common theme can be found in where the ultimate responsibility falls – which in the case of digital initiatives is firmly on the head of the IT department. What’s frequently overlooked, however, is the lack of clear ownership behind the design of the solution itself, the responsibility to measure and anticipate impact in terms of business outcomes as opposed to technology provision.
Enter the Chief Experience Officer (CXO)
The Chief Information Officer’s (CIO’s) role has long been to oversee technology provision, to put it in place and to run it while the business figures out the value that is added by doing so. However, a change is on the horizon, one that is being driven by this need for a more holistic approach to digital change.
The Chief Experience Officer (CXO) is a new role that has come to the fore in recent years as companies hone their customer-focused experience efforts. However, with the growing awareness about the link between employee and customer experience, the role increasingly incorporates employee experience within its scope.
Given this innate focus on employee experience and business impact, this new breed of CXO is well placed to take ownership of the design of digital transformation projects that not only digitalize business processes but also have large potential to drive customer and employee engagement.
Why Companies Fail
A figure often cited is that 70% of company transformations fail. McKinsey shows that this proportion of large-scale change programs don’t reach their stated goals due to factors like “a lack of employee engagement, inadequate management support, poor or non-existent cross-functional collaboration, and a lack of accountability.”
Indeed, digital transformation is arguably the hardest transformation of them all. A Bain & Company survey of 1,000 companies found that just 5% of firms involved in digital transformation efforts reported they had achieved or exceeded their own expectations. According to Bain & Co: “Most leadership teams understand the opportunity but underinvest in the broad changes to the business model and culture that enable speed, learning and agility.”
While the traditional CIO/IT management structure has been vertical – from people to budget to processes – the move to a CXO-centric model introduces a more horizontal, cross-siloed approach as the CXO team encompasses not just engineers, but people from almost every business unit in the organization.
CXOs look at technology acquisition through the eyes of the employee and how it will benefit them. While the CXO might reach for a technology as an answer to a problem, it is no longer the starting point as it would be with a CIO, which is a big difference.
One Nexthink customer who recently moved from a CIO role to an expanded position of Chief of Technology and Experience explains that instead of delivering cloud migration or defining a software roadmap, he now spends more time developing personas, identifying acquisition targets, interacting with customers and participating in relevant industry forums rather than purely tech conferences.
A good CXO will understand both the technology and what the technology can do. In addition, they understand the employees’ and the customers’ needs and how to make them engage with the company. This is as hard to achieve for a CIO who is focused purely on technology as it is for a Chief Marketing Officer who understands the customer but has little knowledge of tech or internal company dynamics.
The CXO was barely even a concept five years ago. Following the current trajectory, however, we can anticipate one of two outcomes for most present-day CIOs:
- Either they will gradually become more cross-siloed in their approach, acquiring a more business-orientated focus (and the kind of ‘soft skills’ required to engage across the business) and likely renamed CXO as a consequence; or
- The scope of their roles will drive more narrowly and deeply into the operation of technology operations.
It’s conceivable the latter will probably be reflected in shifting titles: ‘tech directors’ or ‘heads of IT operations,’ etc. For successful organizations meanwhile, business and technology aims can never be mutually exclusive: it is not the technology that matters, only what that technology can deliver.
Ultimately, only CXOs (in name or practice) will be trusted to ensure this principle guides successful digital transformation projects.