CEO's Key to IT Transformation & Organizational Agility

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Published in 5 Journals
This article has been published as a preprint paper in over 4 international management journals of SSRN like Social Sciences Education eJournal, Information Systems: Behavioral & Social Methods eJournal, Models of Leadership eJournal, Change Management Strategy eJournal, etc.
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Secret of Agility - Embracing Change

It is widely acknowledged that the ability to adapt to change is a crucial factor for companies to succeed in today's dynamic business landscape. However, navigating change is no simple task. Effectively leading change requires authority, and the CEO holds that authority over every individual in the organization. The CEO is ideally positioned to drive organizational change and create an agile organization. Thus, the CEO must take an active role in spearheading change initiatives and fostering agility within the organization.

As a CEO, you very well know that organisations need to be agile in today's global dynamic environment to survive and grow. Agility entails the ability to make rapid changes in organization structure and organizational processes keeping pace with rapid changes in technology and customer needs. However, a change can be said to be successfully implemented only if it percolates down to the last employee, otherwise cracks appear. While technology evolves rapidly, the mindset and attitudes of people tend to change at a slower pace. Moreover, there is a natural resistance to change.

The key to organizational success lies in CEOs embracing change and leveraging IT as a strategic asset for growth and innovation

It becomes imperative for you as the leader not only to drive the change, but also to manage change. Managing change entails facilitating adoption of the change throughout the organisation with minimal resistance. You need the skills to continually manage change and maintain agility. Despite undergoing various change management trainings and seeking advice from experts, you may still find yourself grappling with the complexities of change. You may wonder what might be lacking in your change management training.

Theory of Change Management Needs a Change

There is a crucial aspect missing in traditional change management theory and trainings.

Here are two simple questions as clues to help guess what is missing:

Firstly, what is the primary driver of change in today's world? No prizes for guessing, it is Information Technology (IT).

Secondly, what is the most prominent impediment to change? No prizes for guessing again - it is people, particularly their attitudes and behaviors. I call it "the inertia of the mind".

CEOs must equip themselves with the skills needed to navigate IT-related challenges effectively

These questions provide sufficient hint to guess what was missing in conventional change management training. Though IT stands as the foremost driver of change today, these trainings never taught you how to manage IT-Driven Change. Change management trainings cover various other forms of change, like those stemming from globalization, mergers or changes in government policies, yet it is an irony that they largely overlook the critical aspect of managing changes initiated by the introduction of IT and digital tools.

As a result, managing people has a new connotation today - It is now imperative to learn how to navigate the resistance of individuals who are themselves grappling with the impacts of IT-Driven Change.

Although it may not be obvious, managing IT-Driven change demands a a very specialized skill set and a shift in mindset, aspects that are often ignored in conventional change management curriculums.

The challenge also lies in the fact that many change management experts themselves have not kept pace with the rapid advancements in technology, particularly Information Technology. This gap underscores the necessity for these experts to update their knowledge and strategies to align with the transformative effects of evolving technologies. [R9, Change Management Needs a Change]

Managing IT-Driven Change

The long-awaited solution to CEOs' reluctance to engage in IT projects has been found

It is evident that organizational agility hinges significantly on people and their willingness to embrace change. Given that Information Technology (IT) serves as the primary catalyst for change in today's landscape, CEOs must take deliberate steps to cultivate a positive attitude towards IT and IT-Driven Change. They also need to make special efforts to change their employees' attitude towards IT and IT-driven change to foster a successful and agile organization.

While IT drives the change, people naturally and strongly resist the change. In an IT-Driven corporate world, it is paramount for CEOs to learn not just how to manage change, but to specifically manage IT-Driven Change. You also need to know how to manage people's resistance, not only to change in general, but but specifically to changes initiated by IT, as it is a different ball-game altogether.

Navigating through change can be unsettling. The problem is compounded by fear of technology among common people as well as leaders. Many CEOs and managers often express discomfort with IT. "I just don't understand this technology" is a very common sentiment shared among senior executives. IT scenario may look very euphoric, but the ground reality in businesses paints a different picture. Research indicates that the failure rate for IT/ERP implementations stands at approximately 70%. I am convinced that most often, the failure is not because of technical issues, but due to the lack of right mindset and attitude. There is a critical need for a shift in mindset, and mindsets don't change so easily.

Problem: Low CEO Participation in IT

The low involvement of CEOs in Information Technology (IT) initiatives poses a significant challenge, especially considering that IT plays a pivotal role in driving organizational change. Research indicates that this lack of support from top management is a leading cause of IT project failures. The high failure rates observed in IT and ERP projects should serve as a wake-up call for CEOs, as an IT failure represents a missed opportunity for businesses to be so much more versatile and agile. It also impacts the CEO's success as a leader responsible for steering the organization towards growth.

Recently, I participated in an international conference focused on exploring the root causes of IT failures at a prestigious Management Institute. Various academicians and scholars from institutes around the world presented their findings. The common factor that evolved in all talks was "lack of Top Management involvement in IT Projects" as the primary cause of IT project failures.

Navigating IT-driven change demands not just technical expertise but a profound understanding of change management and people's resistance

During discussions with the experts, I raised the point that inadequate involvement of top management as a primary cause of IT project failures is now old story which we have been hearing for years, almost since the start of my career. But what next? What are we doing to find a solution to this problem which has been identified long back? What are academicians doing to solve this longstanding issue and find a way to encourage greater CEO participation in IT initiatives? Is there ongoing research exploring why CEOs are hesitant to engage in IT matters despite recognizing the high stakes involved? Is it due to a lack of interest or a lack of understanding? Most importantly, what strategies can be implemented to encourage and ensure CEOs' active involvement? After all, it is a question of their own success and failure. The academicians seemed to have no answer.

I searched in research papers and could not find any substantial work done in this area. All research appears to have got stuck at identifying the cause of the problem, but has not gone beyond to find a viable solution.

There is a clear need for comprehensive research and actionable strategies to address the challenges of low CEO participation in IT and foster a culture of active engagement in technological advancements within organizations.

It is imperative to delve deeper and explore the reasons behind this reluctance to engage with IT. What exactly causes their discomfort with IT? Is it rooted in a fear of IT, perhaps due to a perceived lack of understanding or expertise? Is there a mental barrier that prevents CEOs from actively participating in IT initiatives, and if so, can this barrier be overcome? Are there specific training programs or skills that can help CEOs overcome their reservations and become more involved in IT projects? Furthermore, if their hesitation is fuelled by resistance or fear, can strategies be devised to alleviate these concerns and encourage their active participation?

Managing IT-driven change demands a specialized skill set and a shift in mindset, often overlooked in traditional change management curriculums

The author has tried to go beyond this roadblock during his long stint as a Chief Information Officer (CIO). With his very close interactions with CEOs during IT/ERP implementations, he has found that in most cases, this reluctance to engage with IT projects stems from a sense of awe and fear regarding IT, coupled with a belief that they lack sufficient knowledge in this complex domain. Many CEOs perceive IT as a vast and intricate field, leading to confusion about where to begin. There is an innate resistance and fear of learning IT.

This subconscious feeling of inadequacy often hinders their active involvement. Additionally, there is a fear of appearing incompetent, which further deters CEOs from participating in IT-related discussions and meetings. Consequently, many CEOs prefer delegating IT responsibilities to their Chief Operating Officers (COOs) or Chief Finance Officers (CFOs), avoiding direct engagement in IT matters.

Need for Playing the Lead Role

IT Folks Need CEO's Help

CEOs, with their position of authority, hold a pivotal role as drivers of change within organizations. Ironically, while the IT department serves as the engine of change, it lacks direct authority over those who must embrace these changes for IT initiatives to succeed.

In such a situation, the IT department looks to CEOs for support in driving change by leveraging their authority and thereby facilitating smoother transitions. However, many CEOs tend to avoid this responsibility and delegate IT matters to junior officers due to a lack of appropriate skills and, to some extent, a fear of technology.

IT Users Too Need CEO's Help

The condition in departments utilizing IT is equally demanding, needing CEO's attention.

Employees in these departments are experiencing low morale, struggling with unfamiliarity with new technology, and grappling with the fear of dealing with complex technology. They also face the looming threat of obsolescence with advent of new technologies. To make matters worse, their biggest fear is the possibility of job loss due to automation. Consequently, their resistance to IT-driven change is not only natural but also significantly strong.

This resistance sometimes escalates into political maneuvers aimed at disrupting and sabotaging automation projects. Under such a tense environment, conflicts and blame game between IT department and the actual user departments are quite common. Minor conflicts often lead to explosive situation which could derail the projects. (Ref 10 has a real story of how one CEO during my career handled the conflict in a mature way and avoided a crisis.)

It is essential for CEOs to recognize and address these apprehensions and attitudes that hinder agility and change. They need to alleviate stress by offering assurances. CEOs must equip themselves with the skills needed to navigate these challenges effectively.

Unfortunately, many of these issues within both IT departments and end-user departments remain unattended as CEOs maintain a distance from IT.

Need for Specialized Trainings

End User Training

Training at various levels becomes quite a contentious issue during the IT project phase. There is a need for training among IT staff, operational staff who are end-users, change drivers within departments, and, of course, the CEO.

While the training needs for IT staff are clear and are usually managed effectively, there is confusion regarding the scope and content of training for non-IT personnel.

Behavioral IT^® equips CEOs with the right blend of skills for navigating IT-driven transformations and fostering organizational agility

Often during ERP implementations, I have encouraged CEOs to take a seat at a regular clerk's workstation and perform tasks like data entry on a computer, just as a clerk or executive would. Interestingly, many CEOs find these tasks straightforward and not as intimidating as they are made to appear by vested interests. It becomes evident that using a computer for daily tasks doesn't require specialized technical skills; rather, it's about knowing how to operate a technology tool efficiently (especially since most applications today are user-friendly).

Once the CEO realizes this through firsthand experience, managing resistance becomes a lot easier. There is often a strong demand for training among the end-users of IT systems. Lack of training is often blamed for failures. Combined with concerns about job security, the low morale and anxiety among end-users highlight the need for reassurance and support more than technical training. Comforting them and addressing their anxieties becomes crucial to alleviate the turmoil caused by change.

Similarly, CEOs too don't necessarily need in-depth IT knowledge but need to focus on managing change and resistance effectively. They realize through this hands-on exercise that while technical expertise isn't mandatory, having strong change management skills is vital for navigating IT-driven transformations and overcoming resistance to change.

Skills Required by CEOs and Top Leadership Team

If not technical expertise, what skills do CEO's need to be good IT Change Managers?

CEO and senior leadership need skills to manage IT-driven change and its impact on individuals. The leadership team, often dubbed the "Change Drivers" team, plays an equal role alongside the IT team in shaping the success of IT initiatives. The lack of emphasis on enhancing these leadership skills coupled with the innate fear of IT become barriers to CEOs' active participation contributing significantly to the high failure rates, around 70%, observed in IT projects.

Good News! The Barrier Has Been Breached

It is important to understand that these barriers are not insurmountable. As a practitioner in the field, Prem has devised strategies (and put them into practice in real-world scenarios) to address CEOs' fears and empower them to act as a catalyst for change rather than a barrier. Prem has devised effective methods and training programs to enhance CEOs' understanding of IT concepts and boost their confidence in navigating IT-related challenges. The longstanding barriers have been breached. The long- awaited solution to the issue of CEOs' reluctance to actively engage in IT projects has been found. This solution has the potential to significantly drive organizational transformation and leverage IT as a strategic asset.

There is some encouraging news for the CEO's and managers - they don't need to learn the hard skills of IT which they dread. There exists a specialized training program designed to cultivate a new skill in change management, one that was previously overlooked and untaught.

Enter Behavioral IT^®!

CEOs now have the opportunity to refine their skills in managing resistance to IT-Driven Change, thereby fostering organizational agility. CEOs and managers don't need to master technical IT knowledge; they simply need to understand Behavioral IT^®. Behavioral IT^® is a soft skill tailored specifically for managing IT-driven change. Behavioral IT^® is easy for them to grasp as it builds upon their existing abilities in managing people and change. Unfortunately, so far, nobody taught them how to manage IT-Driven change and how to manage people's resistance to IT-Driven Change. Behavioral IT bridges that gap. CEOs can now hone their skills to manage this resistance to IT-Driven Change and ensure an agile organization.

In addition to teaching how to manage IT-Driven Change, Behavioral IT^® dispels common myths surrounding technology. These myths often create unrealistic expectations from IT systems, leading to conflicts and failures within organizations. For instance, while computers are often hailed as super machines, Behavioral IT^® sheds light on their actual capabilities, setting realistic expectations.

Behavioral IT^® equips CEOs with just the right blend of technical, social, psychological, behavioral, and change management skills to fill the leadership skills gap for navigating IT-driven transformations. It empowers leaders to drive organizational agility and swift market responses. Behavioral IT^® can be considered as the soft skills toolkit necessary for managing modern businesses. It provides CEOs with practical Dos and Don'ts that prove invaluable in the delicate environment of IT implementations. More details of Behavioral IT are available in the references [Ref1 to Ref4]. For those interested, detailed information about Behavioral IT^® is available in the references [Ref1 to Ref4].

Additionally, the author has curated a training program focusing solely on the soft skills CEOs need to excel as IT-Driven Change Managers [Ref11 Seminar..]. This training encapsulates straightforward yet powerful ideas that are being overlooked in traditional trainings and professional forums. There training covers the need of mindset change from industrial age mindset to information age one. A fundamental shift in mindset is essential, transitioning from an industrial-age mindset to one suited for the information age [Ref12, Managers' Guide..]. However, changing mindsets is a complex process that requires targeted training and development efforts.

For further insights into Behavioral IT^®, readers can explore this paper in SSRN Journal (and also here) and access the contents of the Behavioral IT seminar here.

References

Prem Kamble, Behavioral IT^® - Managers Don't Need IT Skills - They Need 'Behavioral IT' Skills
Prem Kamble, Behavioral IT^® - A Multi-disciplinary Approach to Address the IT Woes of Businesses & Top Professionals in an IT-Driven World, also available here
Prem Kamble, Behavioral IT^®: Is the IT Scenario Really So Rosy?, also available here
Prem Kamble, Behavioral IT^® - Coping with IT Disruptions, also available here
Prem Kamble, Behavioral IT: Managers' Success Key in an IT-Driven Corporate World also available here
Prem Kamble, Bringing Computers In, Times of India
Prem Kamble, Computing: A Field Job, Computers Today
Prem Kamble, Indian Computing: Issues at Stake, Computers Today
Prem Kamble, Change Management Needs a Change, Wordpress Blog
Prem Kamble, My Experience with the Best and the Worst CEO for Computerization, Wordpress Blog
Prem Kamble, - Seminar for Top Management on Behavioral IT
Prem Kamble, Managers' Guide to Evolve from Machine Age to Information Age

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