According to our 2023 Digital Leadership Report, digital leader influence is on the rise. Nash Squared CEO, Bev White, looks at the benefits of having a technology representative on the board. This article first appeared on Computing.com.
In this age of digitisation, technology is fundamental to the success of businesses. It enables them to operate more smartly, interact with their customers in more seamless ways, and drive up staff productivity. Since Covid, this has become supercharged with almost all organisations on some form of digital transformation journey.
It would follow, therefore, that having a technologist on the Board or executive committee is almost a pre-requisite for success. However, this is not in fact the case at a significant minority of businesses.
At Nash Squared, we have been tracking CIO (or other technology/digital leaders, such as CTOs) membership on the Board or executive committee for many years through our Digital Leadership Report research. This report has shown that digital leader board/executive management team membership globally hit a peak in 2017 in 71% of organisations. It then began to drop, reaching a low of just 61% in 2020. However, our 25th edition of this report shows that it is now on the rise again - and this year has almost returned to 2017 levels, standing at 68%.
Why the fluctuations? Technology leader influence tends to grow when there are new technology challenges emerging or new opportunities that require a technologist's viewpoint from the outset. In the years of decline from 2017-2020, we saw technology becoming increasingly owned and operated from outside the traditional technology team. But since 2020 when the pandemic started and then the post-pandemic recovery began, harnessing technology and bringing it right into the centre of how the organisation operates has seen technology leaders sitting at the heart of strategy again.
Now, of course, we also have the increasing spread of automation and AI which is leading CEOs and their boards/executive committees to turn to the CIO for guidance and operationalisation. More recently still, generative AI such as ChatGPT, Bard and Alphacode has become the hot topic - what does this mean for a business, how can it work for them, and what benefits and outcomes could it deliver?
A good technologist understands the business they work at and the use cases through which technology can help the organisation deliver on its strategic ambitions. In this year's Digital Leadership Report, we see more clearly than ever the evidence that having a technology leader at the top table bolsters key performance metrics. We find that globally this results in a 20% uplift in adopting new technology and a 24% advantage in attracting and retaining talent.
These statistics are significant. Adopting new technology is the key to unlocking higher productivity, new ways of doing things and, ultimately, innovation. Attracting and retaining talent has become a battle on everybody's minds in today's market. My intuition is that having a technologist on the board/executive committee leads to more successful adoption of technology tools and automations that improve employees' working experience - taking away tedious manual tasks and leaving more time for value-adding activity.
I don't think there's any doubt that large organisations today need and should have a technology leader at the top table. For mid-market companies, it may be less clear-cut and particularly for small businesses. Some may simply not be able to afford one. But I would urge them to explore other options such as having a fractional CIO who spends a given amount of time each month working with the business. There can be a significant additional advantage to this approach - a fractional CIO is likely to work with businesses across a range of industries and sectors and so can bring fresh perspectives and new ideas in.
Needless to say, having a technologist on the board/executive committee is only the beginning: they then need to really prove their worth and generate performance benefits. So what qualities make an effective CIO or equivalent?
Firstly, they need to genuinely understand the business and, from that, how technology can be applied to optimise it. Without that understanding, they're little more than a theorist. It goes without saying that they also need a detailed and up-to-date technical understanding - aware of all the tech that is emerging and developing, and how it could be deployed in the organisation. They also need to be an excellent stakeholder manager - at ease at the top table, able to connect with their executive peers and communicate in business, rather than merely technical, language.
It is that interplay between knowing the business, knowing the technology, and communicating how the two can be aligned that defines an effective digital leader. As digitisation takes us to new and exciting places, I don't think many businesses can afford to be without one operating at the highest level.
-ENDS-
The author is Bev White, CEO of Nash Squared. The Nash Squared Digital Leadership Report 2023 is based on the world's largest and longest running annual survey of technology/digital leadership. Over the last 25 years, the research has taken in the views of over 50,000 technology leaders. To register to receive a copy of the report, click here