BG: What are the limitations of this “digital services” approach, and how can CIOs mitigate them?
MS: I don’t think there is an absolute right or wrong on this, just as there is no absolute right or wrong way to organize the rest of the
company’s org chart. But I think the correct question to ask is whether it makes sense organizationally for the two functions to report
to different bosses, which ultimately is the only difference. The wrong reason for separating the two, in my opinion, is that IT lacks
the skills or the culture to deliver digital services. If that is the problem, then the solution is not to create a separate organization, but
to hire the right talent into IT and change the culture.
On the other hand, there are many advantages to merging traditional IT and digital services into a single organization. Good trade-
offs can be made between the two with the company’s investment dollars, for example. Integration can be improved, as Conway’s
Law would suggest. Essentially, all IT systems could be designed from the outside in—that is, in a customer-centric way.
BG: One of my favorite models of technology in
organizations comes from Professor Venkat. His two-
by-two approach is shown here. The majority of CIOs
are fully occupied in the bottom left quadrant. Some
have made inroads into the lower right by helping
the business improve and deliver more profitably in
its current markets. Very few are actively involved
in growth and experimentation. Have you seen any
pursuing the solutions of tomorrow? Is there any other
way to carve up these responsibilities?
MS: I think the best model we have for finding tomorrow’s growth areas is in the book The Lean Startup by Eric Ries. We don’t know what
tomorrow’s growth areas are, and we will only discover them through experimentation and validated learning. In order for this to work,
we need two things from IT. The first is extreme responsiveness—also known as agility or leanness. In terms of cycle time, a Lean Startup
approach requires fielding a product quickly and adjusting or pivoting as you learn. The organization cannot do this if IT cannot keep up—and
IT usually cannot keep up.
The second thing we need is for IT to participate in value discovery and delivery alongside the rest of the business. “The business” probably
doesn’t know where tomorrow’s growth will be. IT and the rest of the organization must collaborate to develop hypotheses and test them,
learning and adjusting along the way. The arms-length relationship between IT and the business does not work.
The obvious examples of success are top-performing tech startups—the unicorns of Silicon Valley. But Ries also cites innovation in a variety
of enterprises, including the U.S. government.
Incidentally, I believe that Lean Startup principles hold throughout enterprise IT as well. We used to think that “the business” knew what it
needed, and we used the information they gave us in a requirements document. Now we know that “the business” has nothing more than a
hypothesis about what will deliver its business objectives. That hypothesis must be validated through fast delivery and continual learning.
BG: I hear you have another book coming out with a challenging insight into the future role of the CIO. Can you tell us a little more about
the book (and when we can get our hands on it)?
MS: Sure. The new book is called A Seat at the Table: IT Leadership in the Age of Agility, and it will be available at the beginning of
September. It grew out of a chapter in my last book, The Art of Business Value, where I asked the question: What is the role of the CIO in
defining and delivering business value? In this book I ask two follow-up questions: How can IT harness Agility to achieve the best value for
the enterprise and how can IT redefine its relationship with the enterprise to maximize this value and in the process, earn a seat at the
table. The answers arise out of my conviction that Agile, Lean, and DevOps are radical game-changers, a fundamentally different way to
think about the role of IT leaders and how IT fits into the enterprise. Ultimately I think that the IT leader must have the courage to throw
off many of the attitudes and assumptions that have left the CIO struggling to gain a seat at the table.