Mobile Consumerism – The Center of Everything

It used to be that we, consumers, would have to figure the best way to deal with organizations from whom we wanted stuff – cars, insurance, clothes, groceries (gather those coupons!), doctors, hospitals, government agencies – but that has changed. The mobile consumer is now firmly in the driver’s seat.

I am a headhunter, and spend my time helping senior executives build teams that need to address a changing world. Most of the change is being driven by technology, and my passion is to get innovative technology leaders to advocate/enable/cajole organizations to transform themselves to meet these new challenges. The other side of what I do is to help build teams that address the new world where consumers are acknowledged to be the center – interacting with organizations that want their business. Please don’t be confused – EVERY organization is becoming a consumer driven, even organizations that think of themselves as B2B.

There is, however, an increasing demarcation. On the one hand – existing organizations are trying to meet the needs of the mobile enabled consumer, i.e. anyone with a smartphone. Let’s call the organizations wanting to serve the mobile enabled consumer “Outside In”, because the consumer is outside, figuring out how to “get in”. Conversely – new organizations are set up to place the consumer at the center, where the consumer decides who s/he wants to deal with, and on what terms (let’s call them “Inside Out”).

No industry is spared this new reality, but some are adapting quicker than others. Those “Outside In” organizations that sell to consumers already are ahead of the pack (e.g., clothing retailers). They are adept at understanding their customers by amassing large amounts of data internally and externally (Big Data) and targeting the consumer individually on his or her mobile device. The retailers who still have a large store presence (the magnet that drew in consumers with coupons in hand) are getting hurt by those who sell on line, mostly via mobile channels (they call it Omnichannel – but mobile increasingly dominates). For an example – compare Sears to Macys/Macys.com. The retailer that is really dominating is Amazon (an “Inside Out” business) where you can buy anything from your mobile device and have it delivered – wherever and whenever you want it. Who needs a store?

I have a particular interest in Healthcare as I believe technology will impact Healthcare more than any other industry in the next 10 years. Think of wearables, IoT (Internet of Things) data from hospitals/clinics/implants, electronic medical records (that are portable on your iPhone), telehealth (where you can consult a doctor via video conference), individualized healthcare based on your DNA, notifications (to ensure drug adherence) gamification, social media, 3D printing for med devices, and much more; it is truly mind boggling!

There are two basic ways that we, as consumers, can interface with healthcare. The traditional approach of employer provided insurance with the network of doctors and hospitals with whom we do our best to engage (Outside In). There are many variations to this theme, but there is another approach entirely; it is the “Inside Out” or the “Uberization” of healthcare. Uber lets you get a ride on your terms. There are providers/drivers, and when you want a service, Uber connects you with the driver, and also lets you select the quality of the ride (Share, UberX, Uber Limo, etc). You are at the center – and the service/product bids for your business; payment is known and automatic, quality is understood and there are quick feedback loops – open to the next consumer. Another example is AirBNB where similar parallels can be drawn. This “Inside out” trend, where the consumer sits in the middle and makes decisions is starting to happen in healthcare.

There will soon be a proliferation downloadable applications that will enable you to be at the center of your healthcare decision making – where doctors, hospitals, and anyone providing a health/wellness related service will bid for your business based on price and quality. We won’t get there overnight, as there are tremendous forces holding the status quo in place: regulation, reimbursement rules, government incentives, state regulations, sunk investments, tax incentives (why can an employer deduct the cost of healthcare and an individual cannot?), and many more.

The movement is inexorable; consumers with smartphones want to be in control of their lives. They are savvy, connected, inquisitive, and value driven. They don’t want to rely solely on a “system” they don’t understand, and are increasingly placing themselves at the center of things, and choosing with whom they wish to interact. Mobile, Big Data, Analytics, IoT, Social Networks, Secure Cloud-based Storage, an App for Everything – these are the technologies that will dominate the landscape for the next 5 – 10 years.

Mobile Consumerism is affecting every business. Are you an “Inside Out” or “Outside In” organization?

What are you doing? It’s your move!

The Most Important Leadership Quality

Is there one? There are innumerable books, masses of research, and a plethora of answers telling us about the hallmarks of successful leaders. I love Adam Bryant’s 5: passionate curiosity, battle-hardened confidence, team smarts, simple mindset and fearlessness.

Here are some other qualities you will see as you comb the web: honesty, communication, delegation, humor, confidence, commitment, creativity, intuition, inspirational, positive, motivational, persuasive, persistent, patient, organized, flexible, people oriented, IQ, EQ etc. there seems to be no end!

But is there something that underpins all this? Is there a single thing that provides a foundation for all the rest? Here is what I think. AUTHENTICITY.

To be authentic you must have grown as a person, made your own mistakes, had your own successes – and be open and candid with others about who you are. You must understand your own journey and be comfortable with your own strengths and weaknesses.

I am a head hunter and for me, determining if a leader is authentic, is the main thing. Testing for technical capability and particular skill can be relatively straight forward. You have done it, have the education, or work in a company with a reputation for being good at it; we can read it in your resume. But what about how you function – those qualities listed above – is that really you, or are you wearing a mask?

Getting a candidate to take off the mask and show who he or she really is – that is what all good head hunter’s strive to do. And mostly it’s about blood. Blood or scar tissue. I often ask candidates to talk about both successes and failures. Successes are great, but if you have never failed – you probably never took on big challenges where you really needed to step up and learn – not only about the task, but more importantly about yourself. I want someone to reflect on their own growth and development and to have an appreciation of self, such that they can be authentic with others. People get to know if you are genuine or authentic – either very quickly, or over time. And if you want to be able to exercise all those traits mentioned above I believe that you need to be authentic.

Advice: Take on all the challenges you can; stretch assignments, overseas gig’s, management tasks outside your specialty, the stuff others are scared of. Push to see who you are, be self-reflective and humble, and you will develop an authenticity that will set you apart.

Traits of Successful CIOs

There has been so much written on this topic that it’s hard to come up with anything “new”. Well, as far as leadership is concerned, there is not a lot of “new”. It’s about people, and leaders going back to Hannibal have exhibited many of the same traits – here is my view of those traits that set leaders apart. It is based on the search work I have done and leaders I have met, my experience over 10 years as a CEO, and some good stuff I have read. Great CIO’s typically:

  • Possess an Integrative mind. A CIO who can see and connect the dots.
  • Are Life-long learners. This factor is seen as the strongest predictor of success across any industry. These first two factors often accompany someone who has been successful in many environments and has a globally diverse experience base. The right candidate will understand the requirement of modifying behavior to achieve impact in differing market settings and cultures.
  • Create a compelling vision, focus the organization around that vision, and execute on it. Great communication skill goes hand in hand with this.
  • Build and motivate teams. Top CIOs are able to attract top talent and challenge them to perform at exceptional levels.  The most successful teams are often cross-functional and multi-cultural, and the leader is able to capture the collective intelligence of the organization in solving business problems. A buzz phrase here would be ‘encourage the heart’.
  • Drive a customer focused/game-changing project. Successful CIOs have typically been responsible for a major game changing corporate initiative. Sometimes they are lucky to be in the right place at the right time, but often the CIO has seen an opportunity to add value, and seized it. The Haas School of Business Renaissance CIO project identified a number of transformational CIOs who had enduring impact through key undertakings such as Dawn Lapore – online trading at Schwab; Max Hopper – Sabre online air reservation system; Rob Carter – online shipment tracking at FedEx. For current CIOs, opportunities exist to have big organizational impact with the emergence of technologies such as:
    • Cloud (SaaS, PaaS and IaaS).
    • Social (e.g., crowdsourcing for helpdesk and product development).
    • Mobile. Delivering organizational capability and products in a mobile world.
    • Big Data and Small Data (analytics for zero unplanned maintenance, product innovation, business performance improvement).
    • Consumerization and BYOD.  (Flexibility, customer satisfaction and cost management).
  • Develop a deep knowledge of the business.  This often drives candidate selection toward industry insiders.  However, there are notable successes where candidates from different industries have had enormous and enduring impact. I placed Phil Fasano at Kaiser Permanente. He came from Financial Services and brought organizational change skills and forward-thinking capability that have made him a standout leader. He has now been at Kaiser for six years, and not only has he revolutionized the way KP does business, but he is also having impact on a global scale. Phil recently published a book entitled “Transforming Healthcare, the Financial Impact of Technology, Electronic Tools and Data Mining”. Not bad for a guy who used to worry about your credit card balances!
  • Have strong influencing capability.   Top quality CIOs understand that they need to deliver a functional operating platform, but as important is their ability to work with business unit heads to help drive value.  A CIO must understand operational goals, and explain how technology can either enable or improve business outcomes. He or she can then push to the front of the bus and help with revenue generation activity.
  • Are trusting and trustworthy.  A capable CIO must develop strong relationships across the business.  We have found that leaders who have a strong EQ (emotional intelligence), and are principled in approach, have enduring impact.

Driving the Bottom Line

Tying into my “No Better Time” Blog (posted 5/14/13) addressing the top line, this Blog will focus on the bottom line.

How IT leaders drive the bottom line:

Another way to say this is how does the CIO get leverage from what he or she does? There is leverage from scale, and from being more efficient in the way the business is done (process harmonization).

Here are some thoughts on what to focus on as you leverage IT for bottom line management:

  • Keep the lights on. Sorry to start with this, but if you don’t offer a great service to the organization you won’t be taken seriously at the top. Your stuff has to work – all the time.
  • Get sourcing right. Negotiate effectively with vendors. I have seen a lot of contracts go wrong because CIOs were too hard on vendors. Vendors can really help. Let them make a fair buck.
  • Analyze IT demand and build a plan that delivers the capacity you need without getting trapped in technology dead ends. Cloud now offers amazing opportunities to manage this equation and deal with spike demand.
  • Get your IT standards in place. This is often about architecture and balancing control with innovation.
  • BYOD. May not save you as much as you expect, but the plain truth is that Consumerization is an opportunity that CIOs need to embrace. And let’s face it; the consumer-oriented products are way cooler than what the enterprise offers!
  • Harmonize process. There are great opportunities when a new platform is installed to harmonize business process and reap organizational efficiency. The CIO can be a major player in getting this right.
  • Embrace the Cloud. Cloud offerings in applications, infrastructure and platforms can have an enormous impact on an organization. Figure out what is suitable and make it happen; you can free up $ in base cost and offer some really cool stuff.
  • IT Governance. It is important, and will catch you out if not done right. Get the right level of business participation, have decent portfolio management – so the IT spend is understood and committed to, and then execute well.
  • Security. Increasingly important with Cloud, Consumerization, Social and Mobile. There are just so many more ways the bad guys can infiltrate. This keeps the CEO up at night, and if you get it wrong, you are out of a job!

There is, however, a balancing act that the CIO needs to understand that hinges around centralization vs. decentralization. Some IT shops want everything centralized for maximum security, cost management and control, but business users typically want IT decentralized for increased speed and flexibility. What’s a CIO to do? Sorry, there is no simple answer here. It all depends.

Randy Spratt at McKesson has a great perspective on this and here is what he is doing:

For the top line stuff – growing revenue – he has adopted a more decentralized strategy. So the new products and new markets initiatives that I referred to are very decentralized, then as those new products are adopted into the organization there is more control. This ensures that customer satisfaction and experience standards are met. When the products become more mainstream, they are standardized for process and operational efficiency and finally, when the products are commodities, the focus moves toward bottom line cost management. It’s a great way to think about lifecycles.

You probably don’t have Randy’s scale and scope so his example may not fit, but the positioning of your IT department on the continuum of “total control” to “anything goes” needs to be thought through carefully. The lesson to take from Randy is this – the centralization versus decentralization challenge is not uniform across an organization, its products and processes. You need to decide what approach makes the most strategic sense for your company right now.

Kim Stephenson of Intel has a really interesting quote around this – she says “there are no IT projects – only business projects”. This is a great mantra, and key to understanding your role as CIO. You are there to add business value.

No Better Time

I believe that there is “No Better Time” to be a CIO than now. If there is one role in the executive suite that will have impact in the next five years it is that of the IT leader. There has been a lot of discussion about what the “I” in CIO should stand for (Integration, Innovation, Intelligence, etc.) but more on that in another blog post.

The CIO can drive both the top and bottom lines of an organization – we just have to get our ideas out, and be effective players in the leadership team. It’s all about adding value.

This, and my next blog entries, will talk about:

1.       What you can do about the top line

2.       What you can do about the bottom line

3.       How to be effective on the leadership team – leadership traits of great CIOs, strategies for effectiveness, etc.

How IT leaders drive the top line – grow the business:

My fundamental premise is that the objective of any business is to find and keep customers. Yes – this needs to be done profitably, etc., but I want to keep it simple for now.  I know there are nuances to each sector; finance, healthcare, manufacturing, and technology are often very different, so please forgive me if all the thoughts don’t apply to you, but some will. Here they are – in no particular order:

Find customers.

  • Think about where you can add value using the simple matrix: Existing Products in Existing Markets then expand to New Products in Existing Markets, Existing Products in New Markets and New Products in New Markets.

axis graphic blog one

  • Spend time with customers. Talk to clients and your counterpart CIOs to understand their challenges. You are not coming with a “salesman” card, and can be really useful to your organization if you are listening to the customer and know your own business.
  • Eat your own lunch/drink your own Champagne. Many IT departments are test beds for their company’s new products – and then become key in selling those products externally. Particularly true for technology companies (maybe not so effective for restaurant or winery business – pun intended!!). If you don’t do this – see if there is a way to get on the revenue generating side of the business, so you are not just a cost center.
  • Develop analytics capability. This can uncover real value – see matrix above.  There is a lot of talk about how the CMO and CIO may be at odds. This may be the case if you are not leading. Go to the CMO, show what analytics can do for product, revenue stream enhancement, customer analysis, etc. The opportunities are enormous.
  • Big Data. Kind of the same point as above, but not quite. The above point was “Small Data” and many companies still have to figure out what to do with what they have. Get the architecture right, and then select a decent analytics partner. Once Small Data is conquered then move to Big Data. There is a lot of hype now, but the opportunities are amazing. Check out what Bill Ruh is doing with his GE group in Silicon Valley; which is one of the more compelling use cases for big data that I have seen.
  • Mobility. Many customers want the option of dealing with you from their smart devices. This is a great opportunity for IT to be a leader in tapping into new revenue streams.
  • Social. A lot is being written about how social business can drive both the top and bottom line. Think this through and get a plan in place. There are some amazing ways that social platforms are impacting organizations; because this is the way people get stuff done. I believe that this is one of the ways that the cost of healthcare can be reduced – by managing habits and choices via social media so that people live healthy lifestyles.
  • Be thoughtful about how you participate in acquisitions. Many organizations need to grow by acquisition, and the IT leader can have key strategic input in explaining (or motivating) how an acquisition can be synergistic from a product and market perspective. You will need to integrate the company being acquired – so think that part through clearly as well. Put a playbook in place.
  • Be a key facilitator around innovation. Depending on the nature of your organization you are either a key driver of this, or need to create the environment to allow innovation to take place. Much of today’s innovation is technology enabled – so you need to know your industry, understand the drivers impacting it, and then create a world that fosters innovation. This is a big topic, and one for another time, but there are two potential paths to success: bottom up or top down. I will unpack these in a future blog.

Keep Customers

  • Execute. Get the right platforms in place – then harmonize and leverage business processes to deliver to customers in the most effective way. More on this in the next blog.
  • Work across the business to ensure speed. Some pundits want to rename the CIO – Chief Acceleration Officer – silly perhaps, but the concept behind the name is excellent. Velocity is really important.
  • Customer service. IT can play a key role – using technology. Figure out how you can make IT a strategic weapon in the delivery of customer service.
  • Continuous product and quality improvement. Through analytics, innovation, etc.
  • Reduce cost.

The constant question the CIO should ask in both finding and keeping customers should be this – how can I add value?