Digital Transformation Blog

Technology is more important than ever to successful mergers and acquisitions. StrataFusion Partner Jim Murphy provides deep expertise to navigate complex M&A scenarios. Here are some of the key questions CIOs and IT should be focused on to navigate the M&A journey. Your company decides that it is interested in making an acquisition. Now what? It’s a rare CIO that hasn’t had to deal with supporting merger activity at some point in their career, but caution should be exercised before assuming that a prior playbook is a fit for what may be in front of you. No two mergers or acquisitions are exactly alike. While the need for speed is great, first take a moment to be sure that you understand what type of M&A activity you’re facing so that you know how best to get things moving in the right direction. There is no accepted industry standard to characterize the different types of M&A, but there are some basic questions that need to be answered up front to help determine your strategy. First, it’s about understanding the business landscape . Is the acquisition to supplement product, customers, supply chain, IP, personnel, or assets? Is the move to take on a competitor? Is it about expanding into an adjacent market? Or is it about trying to address scale? Next, and more specific to IT, what applications critical to business value does the acquired company run? What can potentially be replaced with what you’ve got in an ‘adopt and go’ manner? How strong is their IT staff and are they respected by their business partners? How is their infrastructure and is their cloud strategy consistent with yours? Finally, in what locations do they operate? How solid is their security and compliance management? What risks might they introduce for you? Is there an opportunity to improve your overall architecture or are the risks so great that you’ll need to lock down and reduce your current POR? Once you’ve digested questions like these, and many more, you can determine your strategy and guiding principles. Congratulations! You’ve completed step one and can now start the work of setting priorities and fleshing out a plan. M&A activities are complex, critical and have high visibility. Often, the timelines are set, the scope has many non-negotiable deliverables and the budget is less then you’ll want. The good news is that there is a wealth of knowledge you can tap into. Getting help to ensure that the very first steps are in the right direction can be your most important planning decision.

Earlier this week I moderated a lively panel of CEOs at the HMG Strategy CIO Executive Leadership Summit in San Francisco, exploring what Boards need from CIOs and c-suite technology executives. Are you exploring what it takes to join a Board of Directors? Here are a few tips from our panel. Most boards have two major reasons for seeking an IT professional on their board. They want strategic and operational risk assessment and mitigation, including cybersecurity. They also want business strategy, including technology and business model disruption across the enterprise/industry. Focus on the three Cs: Credentials, Communications, and Contacts. Having business-related credentials (MBA/Ph.D.) to denote more than a technical background. Write books, seek out public speaking engagements, make strategic contacts and develop relationships. Boards are looking to optimize stewardship of a strategy to leverage technology in two frames: internal transformation (modernize, understand, protect and enable the business) and external transformation (innovate products, services, customer engagement). Boards are charged with balancing the intrinsically competing priorities of minimizing risk while maximizing long term opportunity and profitability. The most useful and insightful contributions that anyone can make to a board discussion around technology are those that zero right in on the fulcrum issues between those competing priorities. All businesses, whether established operations or start-up potential disruptors, face repeated build vs buy decisions. A CIO that has a clear vision of where a company’s real and valuable innovation is likely to occur, and who marshals resources (time, focus, money) to prioritize internal development in those areas, while guiding the efficient acquisition of everything else, is a CIO that can help a Board crystalize strategy. Tech leaders with a broad knowledge of business and technology trends, who can speak in an easy to understand and compelling way, have a unique opportunity to help boards understand the issues and opportunities for companies in technology-related businesses. They can help anticipate and lead disruptive change, which typically requires a fairly deep understanding of multiple technical disciplines and a good sense of business fundamentals and strategy.  Good advice.

Benchmarking can help crystalize targeted outcomes by identifying what measurements are most important and showing progress against both internal and external guideposts. Whether they are used to compare to a competitor, track current performance, or understand the impacts of an industry trend, benchmarking can serve as a catalyst for achieving transformation goals. How can IT leaders can drive successful digital transformation through benchmarking? Engage Your People Ensure that your transformation benchmarking is heavily informed by the people who will actually lead and work on transformation initiatives. While external benchmarks are valuable guideposts, your people and teams know best what your organization can handle. Be Clear on Timing Benchmark early in transformation scope planning. Delaying benchmarking until you are at the doorstep of implementation risks missing key signals that can come from benchmarking at the outset of business process redesign and the insight that comes from systematically testing and monitoring early stage transformation efforts. Support the Leadership Conversation Use measures to facilitate a regular executive conversation on your company’s strategic digital health. The right high-level measures give feedback on the pace of transformation that elevates the dialog above the quarterly tug of war. The ability to continue collaborative conversations beyond your last strategic off-site can improve your partnering dynamic and keep the focus where it belongs – digital competition. When these benchmarking steps are addressed appropriately, several enablers of transformation success are bolstered: Clear, shared and measurable expectations and progress milestones are set Feedback loops focused on tangible, actionable points are established Course correction earlier in the process appropriately adjusts future targets Effective communication that demonstrates progress and motivates people and teams We have more to cover in our ongoing benchmarking series. For now, we would love to hear from you about what role benchmarking plays in your organizations, where you run into challenges and how you are solving for success. This is the second installment in StrataFusion’s benchmarking series .

This is the second installment of a two-part series. Read Part 1 here . These focus areas set the stage to build effective teams and provide challenging career opportunities. How can you ensure your culture is working for you and getting the right results? Emphasize team building. Acquire and grow talent through interdepartmental teams. Commit to professional development so you have time to recruit from within and train employees from other areas when an initiative provides opportunity. Leverage internships to tap into bright game-changers with new perspectives around usability, innovation for applications and technology – disruption is good! Bump up the bonus structure for employees who successfully recruit new talent. Capitalize on Agile techniques to broaden job responsibilities. Dev Ops can be an open recruiting and training area for employees who want to broaden their base even if they stay in their existing department. Support career growth: Retain high-potential talent by providing maximum growth opportunities. Ensure that new employees are on-boarded, have clear role definition, are trained and have a mentor. Identify and manage poor fits quickly and fairly. Allow rotations into and out of IT to reinforce the value of business experience. Give feedback and career coaching regularly to ensure employees are developing, have a plan and know their value. Insist on regular training, development and new experiences, and provide the time and space for it. Set up a training sabbatical structure every few years if budget allows. A world-class culture is one of the most effective recruiting tools you can have because the best ambassadors are your employees. Be sure to reward behavior that aligns with company values and recognize results that support the business strategies and culture. Gartner reports that as digitalization expands beyond IT into more areas of business, demand for people with specialized technology skills will continue to increase. Competing for talent is expected to get more intense. As the battle for talent escalates, companies must focus on culture and opportunities to recruit great candidates and retain top performers. To assist with your talent quest, be sure to check out Merritt College Cybersecurity Career Day on Nov. 2. The event will offer CISO and Instructor panels, as well as a keynote address from Cisco’s Chief Privacy Officer Michelle Dennedy .

The Secret to Sustaining an Empowered Culture At StrataFusion, we like to share what we are seeing and learning at Information Technology and Services organizations that are in sync with the business and delivering great results. One of the best predictors of success is a vibrant culture. In the systems Three Keys to Unlock World Class IT Culture Articulate your message . First and foremost, ensure your IT strategy, project portfolio and focus areas are directly and dynamically tied to business imperatives and goals that your team understands. Encourage participation . The perspectives people bring to the table are crucial for success, and a feedback loop instills collaboration and enriches contribution. Value diverse knowledge sources by bringing in team members from other business areas to cross-pollinate and innovate. Invest in your people . Winning the talent war is a never-ending journey. Organizations must hire and continuously provide training and development opportunities to people who are energetic, tolerate ambiguity and are excited to learn new approaches and skills. The Power of Culture Culture plays a bigger role in IT success than many leaders think. It’s an attention-getter that shines through in your best people, as they also recruit the highest potential new employees. Culture must clearly articulate authentic company values, and these enrich your product and services. A strong culture is built on a foundation of trust. This means maintaining an environment that challenges the status quo and offers learning experiences – from success and failures – to clear the way for risk and rewards. It also means enabling teamwork and promoting diversity, because everyone brings a unique skill set and point of view to the table. How can you strengthen culture? Hire, train and then empower employees to work with accountability. Take an agile approach and provide maximum flexibility to meet business needs. Reward self-management successes and discourage micro-managers. Never neglect communication of good or bad news so people understand the organization’s goals, IT strategy, plan and results. It’s crucial to update progress frequently and get input about how your team can tangibly support it. Today’s IT teams have innovative ideas to bring to business collaboration, so take advantage of it. When you are truly committed to cultivating a culture of growth, the payoff is huge. This is the first blog installment in a series on building world-class IT. The next installment will focus on building teams and careers.