Corporations have taken a big leap forward over the past decade by adding or advancing digital properties to its portfolio of assets in order to better leverage or extend its brand. Most of this has been under the extended responsibility to the CTO or CMO or both. Fortune 500 Companies have created and monetized web sites and digital products. During this time, you have noticed the emergence of start-up competitors that have leaped past big companies while the bigger companies just sit and watch.
For example, how did Amazon.com beat Barnes and Noble to the punch and why couldn’t Barnes and Noble react more quickly given their resources? In addition, companies like eBay and Craigslist have dominated major media assets such as local newspaper companies. Why should there even be a market for online real estate, automotive or job web sites that don’t come from the companies who own the product themselves? Travel companies?
Problem Statement
The problem is that the «big company» has not been positioned to manage a digital business. As Jack Welch had put it, the strategy or the «ah ha» idea is really only just 20%, but it is the execution that wins out. I firmly believe that the «big company» has not been positioned properly for the execution – regardless of its digital strategy.
Previous Options
Previously, options were to hire a more experienced CMO, invest in consultants and interactive agencies, or perhaps an acquisition.
CIO Solution
Chief Internet Officer
Benefit 1- Organization Management
A CIO should be able to provide the insight as to how to best structure an organization to support an e-business. A CIO should have run and/or built a start-up and have been involved in a Corporate start-up. Having such frame of reference will allow the CIO to know what they need the organization structure to look like in order to succeed and what they need to do to make the appropriate changes. For example, it is important to re-evaluate ‘functional’ or ‘matrix’ designs and support more business unit-like designs. In addition, it is important to evaluate how product, marketing and technology are structured as well as the process within each. In today’s world of Agile development and stronger performing technologies and methods, the organization should not be driven by RUP approaches, business analysis and such.
Benefit 2 – Strength of Distribution
The CIO can clearly advantage a larger company by leveraging its assets to acquire distribution. There seems to be a middle ground today between a CMO and CTO where the CMO is skilled at «marketing» and the CTO is skilled at «technology development». Distribution blends both skills and is often overlooked. Large companies spend too much money on advertising and media agencies when they could merely be deploying more web pages and creating partner relationships to leverage strength of distribution.
Benefit 3 – Architecture – Information and Technology
Perhaps the most overlooked of all is information and technology architecture. Where the CIO position most benefits an organization is the ability to assist with IA and Technology and meet project demands (this benefit blends a bit with «speed to market»). On the IA side, many companies utilize large sets of data to conduct their business both internal and external.
The ability to account for IA is a skill that needs to be accommodated for in Marketing plans that is often overlooked. With respect to Technology architecture, it is often overlooked how much larger companies are not properly set up to conduct an e-business – even today. As CMO’s prepare to launch new initiatives on top of older technology architectures, they could be building a house of cards that may not be supportable long term or that may be causing hardship to support internally or to push to production. A CIO should have the insight on how to best match resources and strategy with technology architecture.
Benefit 4 – Speed to Market
Speed to market is the final benefit. Not to give away any secrets in the this one as it truly is a ‘secret sauce’ for many others in my field but the ‘process’ deployed internally to produce product and marketing initiatives is essential. Today, there are dozens of variations of Agile methodologies from which to select that will improve a business’ speed to market.
Implementation
Need to target a candidate for the CIO position. Prior to the filling the role, the Company must take the internal political will necessary for the CIO to execute. As such the following needs to occur:
1. Generate the appropriate the political corporate will for the CIO to succeed
a. Allow the CIO to re-arrange the organizational structure as necessary to support the Internet
b. Allow the CIO to separate consumer digital initiatives with separate infrastructure policies
c. Allow the CIO to manage digital initiatives to a business plan rather than a budget
2. Source a candidate with the appropriate skill sets
a. Remember, nobody can have 20 years of Internet experience. Do the math. It wasn’t until the mid-90’s that Internet/Digital businesses took shape. Even then, few people entered the category. Ten years of experience is senior.
b. The candidate needs to be both well-rounded and have managed a P&L. By well-rounded, they need to be strongest at online sales and marketing but also have managed product development, web development and have a strong understanding of finance and operations.
c. The candidate should have been in BOTH a corporate start up leadership role and pure start leadership role.
The CIO is the next C-level digital leadership position. With this position, large companies, or even mid-size companies looking to grow their digital business, can truly leverage its e-business more effectively.