“CEOs must embrace technology or they’ll watch their company fail.” Harsh, I know. It’s what I told my 73-year-old dad in a recent conversation about my research on the relationship between CEOs and technology. Dad asked if I could say it a little softer.
I looked him dead in the eye and said, “No!”
Then I cited some of the research I’ve been working on. I asked him to think about the S&P 500. I told him that in the late ‘50s and early ‘60s, the average time a company would spend ranked on the index was around 50 years. I told him that by 2025, 50 years would dwindle to 15. Gulp! I told him that three out of four companies currently on this list will not be there in 15 years (see The Corporate Ladder is Disappearing).I said technology was the biggest driver of that trend.
I could see my father’s perspective change in an instant. Facts have a way of doing that. Even my stubborn, traditionalist, 73-year-old father could see it’s time for change. At least, it is if you’re a CEO who wants his company to survive another 15 years.
Of course, business has always been changing. In the book The Millionaire Next Door, for example, Stanley Thomas tells us the number of men’s and boys’ clothing and furnishings stores more than doubled from 1984 to 1992. In 1984, 100 dropped from first to 57th among the 171 sole proprietorships studied. In that same time, coal mining moved from 14 to 165. Today, they don’t even make the chart.
The rising waters of business disruption in 2017
But the disruption we are seeing today is different. Technology now represents over half of the top 25 brands in the world. Whole industries are collapsing in the blink of an eye.
This undeniable river of disruption is flooding over its banks. The flood is moving downstream and forcing the older C-suite to either sandbag or move to higher ground. Imagine a news reporter interviewing “that guy” who refuses to leave saying, “We ain’t going anywhere,” despite the flood of the century’s imminent onset. The viewers at home just shake their head in dismay.
Now imagine Millennials shaking their head that same way. They do when they see a CEO fumble her way around her computer. Or better yet, watching the CEO having to make a decision on the company’s future…. “If we just keep stacking sandbags we should be fine.” SMH
For CEOs (and senior executives for that matter), it is time to make a change or get swept away. Do I.T. or die.
But how does an executive who created his personal and company’s success without the use of technology suddenly become an I.T. expert? Let’s face it, it’s hard to teach an old dog new tricks. After all, the average age of a CEO is 57. The average age of a Silicon Valley start-up CEO is twenty-something.
The first step is to admit you have a problem. OK, I stole that “step” from a successful problem solving methodology. “Hi, I’m a CEO and I don’t like or understand technology.” “Hi CEO.” But I’m talking about the fundamental root of the issue.
No one blames you for not liking I.T. We understand. But things have to change. “Talk to my I.T. department” is no longer a reasonable response to tech related business problems. And here is the rub: Almost all business problems are tech related in some form or fashion.
The CEO has to take measures to understand the basics of I.T. They need to use the company’s CRM. They need to use their company’s core applications. They don’t have to be experts, they just have to lead by example.
A case of a CEO learning the hard way
I know a CEO who purchased an absurdly expensive I.T. solution that was going to keep the company’s systems running in the event of a disaster. When (it’s always a matter of when, not if) disaster struck, their systems shut down. Dead in the water.
The financial cost to the company was major. The reason why the failover didn’t work was relatively simple. It was not the CEO’s fault, but it was certainly his responsibility. Operating out of a positon of ignorance, the CEO just blindly let the I.T. guys “do their thing.” His lesson was painful. He learned the hard way.
The same CEO commissioned another firm to design a more reliable disaster recovery (DR) solution. This time he had the I.T. firm show him a design that he could understand. That was also very painful, but in a much different way, and a lot more cost effective.
I applaud that CEO effort. It was obvious to everyone he was a fish out of water during the process, but he just needed to get his head wrapped around I.T. His effort to embrace technology was invaluable on many levels.
- The CEO has a better understanding of how I.T. works in his business
- The I.T. service firm knows the CEO is on top of the solutions
- The CEO’s company sees the leader taking an active role on advanced I.T.
Takeaway for CEOs to embrace technology
Today, CEOs need to better understand the systems that drive their business. They need to surround themselves with I.T. experts who also understand the business. Together they can work to future-proof the company.
That is just the first step in getting up to speed. Next, you need to get involved with the advanced technology that helps you know your customers better than your competition. Implement systems that allow you to process that information faster because the next horizon is another major leap… quit reacting and start predicting the future. That might be the only way to ensure your business has a place in it.
At the end of my conversation with my dad, he said “I yearn for the days of pen and paper”. I thought, “It’s a good thing he’s retired.”
Don’t miss the rest of the series: follow me on LinkedIn or Twitter to see new posts.
