D3

My take
Pat Gelsinger, CEO
VMware

I meet with CIOs every week, hundreds each year. I meet with them to learn about their journeys and to support them as they pursue their goals. The roles these individuals play in their companies are evolving rapidly. Though some remain stuck in a “keep the lights on and stick to the budget” mind-set, many now embrace the role of service provider: They build and support burgeoning portfolios of IT services. Still others are emerging as strategists and decision makers—a logical step for individuals who, after all, know more about technology than anyone else on the CEO’s staff. Increasingly, these forward-thinking CIOs are applying their business and technology acumen to monetize IT assets, drive innovation, and create value throughout the enterprise.
CIOs are adopting a variety of tactics to expand and redefine their roles. We’re seeing some establish distinct teams within IT dedicated solely to innovating, while others collaborate with internal line-of-business experts within the confines of existing IT infrastructure to create business value. Notably, we’ve also seen companies set up entirely new organizational frameworks in which emerging technology–based leadership roles such as the chief digital officer report to and collaborate with the CIO, who, in turn, assumes the role of strategist and integrator.
What’s driving this evolution? Simply put, disruptive technologies. Mobile, cloud, analytics, and a host of other solutions are enabling radical changes in the way companies develop and market new products and services. Today, the Internet and cloud can offer start-ups the infrastructure they need to create new applications and potentially reach billions of customers—all at a low cost.
Moreover, the ability to innovate rapidly and affordably is not the exclusive purview of tech startups. Most companies with traditional business models probably already have a few radical developers on staff—they’re the ones who made the system break down over the weekend by “trying something out.” When organized into small entrepreneurial teams and given sufficient guidance, CIO sponsorship, and a few cloud-based development tools, these creative individuals can focus their energies on projects that deliver highly disruptive value.
VMware adopted this approach with the development of EVO:RAIL, VMware’s first hyper-converged infrastructure appliance and a scalable, softwaredefined data-center building block that provides the infrastructure needed to support a variety of IT environments. To create this product, we put together a small team of developers with a highly creative team leader at the helm. We also provided strong top-down support throughout the project. The results were, by any definition, a success: Nine months after the first line of code was written, we took EVO:RAIL to market.
Clearly, rapid-fire development will not work with every project. Yet there is a noticeable shift underway toward the deployment of more agile development techniques. Likewise, companies are increasingly using application program interfaces to drive new revenue streams. Others are taking steps to modernize their cores to fuel the development of new services and offerings. Their efforts are driven largely by the need to keep pace with innovative competitors. At VMware, we are working to enhance the user experience.
Having become accustomed
to the intuitive experiences they enjoy with smartphones and tablets, our customers expect us to provide comparable interfaces and experiences. To meet this expectation, we are taking a markedly different approach to development and design, one that emphasizes both art and technology. Our CIO has assembled development teams composed of artists who intuit the experiences and capabilities users want, and hard-core technologists who translate the artists’ designs into interfaces, customer platforms, and other user experience systems. These two groups bring different skill sets to the task at hand, but each is equally critical to our success.
As CIOs redefine and grow their roles to meet the rapidly evolving demands of business and technology, unorthodox approaches with strong top-down support will help fuel the innovation companies need to succeed in the new competitive landscape.
Tech Trends 2015: The fusion of business and IT
My take
Stephen Gillett
Business and technology C-suite executive
CIOs can play a vital role in any business transformation, but doing so typically requires that they first build a solid foundation of IT knowledge and establish a reputation for dependably keeping the operation running. Over the course of my career, I’ve held a range of positions within IT, working my way up the ranks, which helped me gain valuable experience across many IT fundamentals. As CIO at Starbucks, I took my first step outside of the traditional boundaries of IT by launching a digital ventures unit. In addition to leveraging ongoing digital efforts, this group nurtured and executed new ideas that historically fell outside the charters of more traditional departments. I joined Best Buy in
2012 as the president of digital marketing and operations, and applied some of the lessons I had learned about engaging digital marketing and IT together to adjust to changing customer needs.
My past experiences prepared me for the responsibilities I had in my most recent role as COO
of Symantec. When we talked
about business transformation at
Symantec, we talked about more than just developing new product
versions with better features than
those offered by our competitors. True
transformation was about the customer:
We wanted to deliver more rewarding experiences that reflected the informed, peer-
influenced way the customer was increasingly making purchasing decisions. Organizational silos can complicate customer-centric missions by giving rise to unnecessary technical complexity and misaligned or overlapping executive charters. Because of this, we worked to remove existing silos and prevent new ones from developing. Both the CIO and CMO reported to me as COO, as did executives who own data, brand, digital, and other critical domains. Our shared mission was to bring together whatever strategies, assets, insights, and technologies were necessary to surpass our customers’ expectations and develop integrated go-to-market systems and customer programs.
Acting on lessons I learned in previous roles, we took a “tiger team” approach and dedicated resources to trend sensing, experimentation, and rapid prototyping. This allowed us to explore what was happening on the edge of our industry—across processes, tools, technology, and talent—and bring it back to the core. CIOs can lead similar charges in their respective organizations as long as their goals and perspectives remain anchored by business and customer needs. They should also be prepared to advocate for these initiatives and educate others on the value such projects can bring to the business.
My advice to CIOs is to identify where you want to go and then take incremental steps toward realizing that vision. If you are the captain of a ship at sea, likely the worst thing you can do is turn on its center 180 degrees—you’ll capsize. Making corrections to the rudder more slightly gives the boat time to adjust— and gives you time to chart new destinations. Pick one or two projects you know are huge thorns in the sides of your customers or your employees, and fix those first. We started out at Symantec by improving mailbox sizes, creating new IT support experiences, and fixing cell phone reception on campus. We moved on to improving VPN quality and refreshing end-user computing standards by embracing “bring your own device,” while simultaneously building momentum to complete an ERP implementation. By solving small problems first, we were able to build up the organizational IT currency we needed to spend on bigger problems and initiatives.
When CIOs ask me about how they can get a seat at the table for big transformation efforts, I ask them about the quality of their IT organizations. Would your business units rate you an A for the quality of their IT experience? If you try to skip straight to digital innovation but aren’t delivering on the fundamentals, you shouldn’t be surprised at the lack of patience and support you may find within your company. A sign that you have built up your currency sufficiently is when you are pulled into meetings that have nothing to do with your role as CIO because people
“just want your thinking on this”—which means a door is opening for you to have a larger stake in company strategy.

Cyber implications
I
N many industries, board members, C-suite executives, and line-of-business presidents did not grow up in the world of IT. The CIO owns a crucial part of the business, albeit one in which the extended
leadership team may not be particularly well versed. But with breaches becoming increasingly frequent across industries, senior stakeholders are asking pointed questions of their CIOs—and expecting that their organizations be kept safe and secure.
CIOs who emphasize cyber risk and privacy, and those who can explain IT’s priorities in terms of governance and risk management priorities that speak to the board’s concerns, can help create strong linkages between IT, the other functions, and the lines of business. No organization is hacker-proof, and cyber attacks are inextricably linked to the IT footprint.8 Often, CIOs are considered at least partially to blame for incidents. Strengthening cyber security is another step CIOs can take toward becoming chief integration officers in a space where leadership is desperately needed.
Part of the journey is taking a proactive view of information and technology risk—particularly as it relates to strategic business initiatives. Projects that are important from a growth and performance perspective may also subject the organization to high levels of cyber risk. In the haste to achieve toplevel goals, timeframes for these projects are often compressed. Unfortunately, many shops treat security and privacy as compliance tasks—required hoops to jump through to clear project stage gates. Security analysts are put in the difficult position of enforcing standards against hypothetical controls and policies, forcing an antagonistic relationship with developers and business sponsors trying to drive new solutions. As CIOs look to integrate the business and IT, as well as to integrate the development and operations teams within IT, they should make the chief information security officer and his or her team active participants throughout the project life cycle—from planning and design through implementation, testing, and deployment.
The CIO and his or her extended IT department are in a rare position to orchestrate awareness of and appropriate responses to cyber threats. With an integrated view of project objectives and technology implications, conversations can be rooted in risk and return. Instead of taking extreme positions to protect against imaginable risk, organizations should aim for probable and acceptable risk—with the CIO helping business units, legal, finance, sales, marketing, and executive sponsors understand exposures, trade-offs, and impacts. Organizational mind-sets may need to evolve, as risk tolerance is rooted in human judgment and perceptions about possible outcomes. Leadership should approach risk issues as overarching business concerns, not simply as project-level timeline and cost-and-benefit matters. CIOs can force the discussion and help champion the requisite integrated response.
In doing so, chief integration officers can combat a growing fallacy that having a mature approach to cyber security is incompatible with rapid innovation and experimentation. That might be true with a compliance-heavy, reactive mind-set. But by embedding cyber defense as a discipline, and by continuously orchestrating cyber security decisions as part of a broader risk management competency, cyber security can become a value driver—directly linked to shareholder value.

Where do you start?
There are concrete steps aspiring chief integration officers can take to realize their potential. Start with taking stock of IT’s current political capital, reputation, and maturity. Stakeholder by stakeholder, reflect on their priorities, objectives, and outcomes, and understand how IT is involved in realizing their mission. Then consider the following:
• Line of sight. Visibility into the balance sheet of IT is a requirement—not just the inventory but the strategic positioning, risk profile, and ROI of the asset pool. Consider budgets, programs, and projects; hardware and software; vendor relationships and contracts; the talent pool, organizational structure, and operating model; and business partner and other ecosystem influencers. Compare stakeholder priorities and the business’s broader goals with where time and resources are being directed, and make potentially hard choices to bring IT’s assets into alignment with the business. Invest in tools and processes to make this line of sight systemic and not a point-in-time study—allowing for ongoing monitoring of balance-sheet performance to support a living IT strategy.
• Mind the store. Invest in the underlying capabilities of IT so that the lights are not only kept on but continuously improving. Many potential areas of investment live under the DevOps banner: environment provisioning and deployment, requirements management and traceability, continuous integration and build, testing automation, release and configuration management, system monitoring, business activity monitoring, issue and incident management, and others. Tools for automating and integrating individual capabilities continue to mature.
But organizational change dynamics will likely be the biggest challenge. Even so, it’s worth it—not only for improving tactical departmental efficiency and efficacy, but also to raise the IT department’s performance and reputation.
• All together now. Engage directly with line-of-business and functional leaders to help direct their priorities, goals, and dependencies toward IT. Solicit feedback on how to reimagine your IT vision, operating, and delivery model. Create a cadence of scheduled sit-downs to understand evolving needs, and provide transparency on progress toward IT’s new ambitions.
• Ecosystem. Knock down organizational boundaries wherever you can. Tap into your employees’ collective ideas, passions, and interests. Create crowd-based competitions to harness external experience for both bounded and open-ended problems. Foster new relationships with incubators, startups, and labs with an eye to obtaining not just ideas but access to talent. Set explicit expectations with technology vendors and services partners to bring, shape, and potentially share risk in new ideas and offerings. Finally, consider if cross-industry consortia or intra-industry collaborations are feasible. Integrate the minds, cycles, and capital of a broad range of players to amplify returns.
• Show, don’t tell. As new ideas are being explored, thinking should eclipse constraints based on previous expectations or legacy technologies. Interactive demos and prototypes can spark new ways of thinking, turning explanatory briefings into hands-on discovery. They also lend themselves better to helping people grasp the potential complexities and delivery implications of new and emerging techniques. The goal should be to bring the art of the possible to the business, informed by the realm of the feasible.
• Industrialize innovation. Consider an innovation funnel with layers of ideation, prototyping, and incubating that narrow down the potential field. Ecosystems can play an important role throughout— especially at the intersections of academia, start-ups, vendors, partners, government, and other corporate entities. Align thirdparty incentives with your organization’s goals, helping to identify, shape, and scale initiatives. Consider coinvestment and risksharing models where outsiders fund and potentially run some of your endeavors. Relentlessly drive price concessions for commoditized services and offerings, but consider adjusting budgeting, procurement, and contracting principles to encourage a subset of strategic partners to put skin in the game for higher-value, riskier efforts. Evolve sourcing strategies to consider “innovators of record” with a longer-term commitment to cultivating a living backlog of projects and initiatives.
• Talent. CIOs are only as good as their teams. The changes required to become a chief integration officer represent some seismic shifts from traditional IT: new skills, new capabilities and disciplines, new ways of organizing, and new ways of working. Define the new standard for the IT workers of the future, and create talent development programs to recruit, retain, and develop them.

Bottom line
TODAY’S CIOs have an opportunity to be the beating heart of change in a world being reconfigured by technology. Every industry in every geography across every function will likely
be affected. CIOs can drive tomorrow’s possibilities from today’s realities, effectively linking business strategies to IT priorities. And they can serve as the lynchpin for digital, analytics, and innovation efforts that affect every corner of the business and are anything but independent, isolated endeavors. Chief integration officers can look to control the collisions of these potentially competing priorities and harness their energies for holistic, strategic, and sustainable results.