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How leading CIOs are addressing the digital skills gap

08 Dec 15

Digital business is growing across all industries.

As analog revenues flatten and decline for many industries, businesses are shifting to a new source of growth: digital revenue from digital business.

Our estimates indicate that 125,000 large organisations will have launched digital business initiatives by year’s end. To put that into context, that’s over half of all large enterprises.

This presents a huge challenge for CIOs who must now retool their IT organisations with the knowledge, skills and experience needed to lead digital initiatives. The question for CIOs is how do you transform your team over time while still meeting the digital demands of the business today?

Playing the Short Game, Faster

Digital business demands that CIOs and their IT organisations develop digital technology skills such as cloud, mobile, big data and social analytics (a combination Gartner calls the Nexus of Forces), as well as acquire new digital business skills such as design thinking, data sciences, digital business design and user-centric design to drive transformation and sustain long-term performance — and fast.

In the short term, CIOs can use IT consultants, contractors and outsourcing services to meet this challenge. But this is not sustainable, productive nor differentiating beyond the immediate benefit of speed. CIOs must simultaneously focus on reskilling and upskilling to source, acquire and develop the knowledge, skills and competencies needed within their own team in order to execute a digital business strategy.

To build digital skills capabilities internally at the desired pace to stay competitive, CIOs need to work with their HR colleagues to lead a significant overhaul of learning and training programs. Traditional approaches such as computer-based training and certifications still have a role to play, but CIOs must think differently to transfer digital knowledge quicker and deliver results faster.

This is where reverse mentoring comes into play. This is a technique we see gaining traction among leading CIOs. First pioneered by GE and adopted since at scale by companies such as P&G, Johnson & Johnson and GM, it focuses on pairing mature senior employees with individuals entering the workplace for mutual benefit.

Millennials possessing the dexterity and knowledge required for digital business become great resources for educating more tenured staff members on new technologies. In return, younger staff benefit from knowledge and capabilities imparted by senior staff, such as business acumen, protocol and decision-making skills that often come with time and experience.

Playing the Long Game, Better

Hiring consultants or contractors in the short term and developing your own team’s skills in the medium term helps CIOs drive digital transformation, but the future will be won by leaders who think and act even bigger.

To accelerate the creation of a new digital technology platform, leading CIOs are advocating a radical new approach; their organisations are operating as venture investors.

They are not prepared to simply wait for their existing suppliers to build digital capabilities. Instead, leading CIOs identify and invest directly in small technology startups, buy a stake in their future, guide their direction based on the needs of the CIO’s organisation, and then acquire and integrate those startups into the acquiring business when the time is right to reap the maximum benefit.

These “techquisition” CIOs first appeared in FinTech companies. We now see this trend adopted by industrial firms, which invest in automation software, and by retailers, which acquire vendors that possess unique algorithms designed to create differentiated customer experiences.

These CIOs are using techquisitions to add new skills, capabilities and competencies to their teams to stay not only relevant to their organisations, but to win from within.

Playing to Win, Bigger

Addressing the pace, scale and complexity of the skills and experience gap in your organisation is not going to be solved by implementing one initiative “or” another; CIOs must drive multiple people-focused initiatives — including competing and/or unconventional programs — to succeed in an entirely new digital business environment.

The pace of change is too fast, the opportunity is too large and the risk of failure is far too great.

Article by Peter Sondergaard, Gartner senior vice president and global head of research

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