IT decision-makers in the conflict between process optimisation and innovation

  • CIOs and CDOs increasingly have to assume the leadership position of their departments and drive things forward.
  • Leadership skills need to be rethought and realigned. 
  • In line with this topic, the “Digital Leader Summit” is expected to take place in spring 2021.
  • Digital Leader Weekly – on September 9th the summer break will end 

After the period of digital euphoria and experimentation with new technologies without restrictive preconditions, many companies have come back to reality. In light of a materialised recession, CIOs and CDOs are also forced to deal more intensively with cost-cutting measures and process optimisation. Simultaneously, the demand for innovation remains undisputed, in order to continue to guarantee competitiveness in contested markets. 

How can digital and IT professionals resolve this conflict between demands for cost reduction while maintaining the capacity for innovation? Which technologies can facilitate process optimisation and contribute to Digital Operation Excellence? How must leadership be structured in order to promote self-organised and creative teams that actively contribute to the innovativeness of the company/IT?

The triad – financial, digital/ technical, and sustainable value

The crux that already concerns companies today is to manage the balancing act between business criticality, technical decisions, and the cognition of social responsibility. The motto “Drive innovation AND save costs” is particularly relevant in difficult economic times. 

This means that digital transformation professionals not only have to develop new, innovative concepts with their team, but also need to optimise existing processes together with their IT department and other business units to contribute to the continued positive commercial success. What characteristics distinguish teams that are able to maintain innovation in companies? 

  • A range of perspectives and willingness to work together 
  • Empathy and objectivity 
  • Diversity also in the sense of skills and knowledge background 
  • Psychological security and healthy friction
  • Promotion of the entrepreneurial spirit of each team member

In addition to the topic of innovation, business aspects, in particular, play an important role in the digital age. The optimal utilisation of hardware, application programmes, organisation of data and risk management, to name just a few IT-related issues. For CDOs/CIOs, CFOs, and IT management, the question thereby arises as to which strategies and technologies they will use to get a grip on the complexity of the infrastructure and, at the same time, the requirements for higher innovation speed (time to market), scalability, and agility, and, in the best case, to reduce costs. 

If the cost reduction through digitalization has not yet been addressed in a company, this now results in corporations facing a mountain of options. 

For this reason, here are a few suggestions for a possible approach:

  • Find the right entry points with cost analyses (cost structure analyses and IT cost benchmarking) 
  • Carry out regular efficiency and optimisation analyses 
  • Simplify processes e.g. through automation
  • Lean management and operational excellence methods
  • Measure IT gains and cost ratios (hardware, software, services, and support per workstation)
  • Establish IT controlling that measures the costs of ongoing operations and the costs of project-related development.

To simultaneously do justice to the role as a “member of society” and to not only consider digitalization  activities from a purely economic perspective, it is paramount for companies to be able to answer the question of “purpose” – CIOs and CDOs, with the help of their teams, can provide links for digital innovations that are oriented towards the fulfillment of a “corporate purpose.” 

When it comes to finding and implementing the “corporate purpose,” IT and business units can contribute significantly to entrepreneurial, but above all to social development and progress. Companies that recognise this potential early on can develop value-oriented corporate strategies and differentiate themselves from mainstream digitalization  and the competition through an individual “digital purpose.”

To realise this triad, companies need management personalities who bring with them an expanded range of skills in the digital age. 

Digital leadership – skills and management behaviour

Digitalization not only breathes life into the digital processes of companies through the use of new technologies. Rather, digitalization has an enormous influence on the composition of human relationships, communication structures, and thus ultimately on leadership and leadership models in companies. This results in the need to accept the human challenges of digitalization and to redesign leadership styles. Personnel development strategies as well as the understanding and shaping of leadership skills must be rethought and realigned. 

In a digital world (especially in times of home office & co.), the focus is primarily on innovative teams that think outside the box, instead of subordinating themselves hierarchically by optimising individual employees. These innovative teams have a relationship-oriented, trust-based, and communicative style of leadership. The basic leadership style must be appreciative and aim to strengthen the relationships with the individuals in the team, as well as within the entire team as a whole. Usually, this can only be achieved through close relationship-oriented and personality-related leadership.

Determining the right leadership behaviour and digital leadership style seems to be impossible due to the complexity of the digital world of work. It largely depends on

  • characteristics orientation,
  • value orientation,
  • relationship orientation, 
  • as well as situation dependency,

which are all gaining in importance in the digital world of work. Leadership styles that take many dimensions into account are thus the focus. Complex leadership behaviour is required, because value-oriented leadership also means that transformational leadership based on shared visions and values becomes more important.

The following skills are required to justify this leadership style in the digital age: 

  • Promote changes (media and IT skills) 
  • Feedback culture 
  • Strengthen co-creation and a sense of togetherness 
  • Employee development and strengthening of self-organisation  
  • Decision-making skills 
  • Trust 
  • Communication 
  • KPIs
  • Rule orientation 
  • Orientation assistance 

Redesign leadership for a digital tomorrow – Digital Leader Summit 2021 

CIOs and CDOs increasingly have to assume the leadership position of their departments and drive things forward. Excellent digital leaders empower their employees to bring innovation into the company independently and at the same time ensure a cost-conscious and resource-saving mindset: from cultivating the bottom-up approach, through to creating safe spaces for entrepreneurial thinking in the sense of intrapreneurship. 

We will discuss these and many other topics, in particular leadership, culture and organisation, as well as technology and innovation topics, at the upcoming Digital Leader Summit. Since we unfortunately had to postpone our Digital Leader Summit in Berchtesgaden this year, the DLS is expected to take place next spring. The date will be published in due time. 

Fifty selected, high-ranking digital and IT professionals from DAX companies, medium-sized companies, and technology consortiums will come together again to enjoy an exchange of experiences with colleagues from other companies and industries in a pleasant, alpine atmosphere.

Discuss the following topics with selected CIOs, CDOs, and our experts and analysts: 

#Digital Ecosystems and Co-Creation Mindset
#Digital Business and Product Design
#Data Business and Artificial Intelligence
#Platform and Cloud Operations
#Agile IT Organisation and Digital Work Culture
#Digital Leadership and Career Development

We have also launched the Digital Leader Weekly. Because of the positive feedback we have received on this format, we have decided to continue it so that we can stay in touch with our community on a regular basis.

With a weekly video conference (every Wednesday from 3 p.m. to 4 p.m. after the summer break as of September 9th) held for our Community, we enable the confidential exchange of knowledge between digital professionals from the Digital Leader Community and our experts and analysts from Cloudflight.

The discussion on a given topic is initiated by an idea from a member of the community. Speakers included CDOs – Lanxess, Director IT Infrastructure – Daimler, Group CDO – BASF, extreme athletes and motivational speakers, as well as founders and scientists.

We will get going again with exciting topics and interesting ideas after the summer break on September 9th.


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