I ran across an article in the Wall Street Journal, Hackers and a Shrinking Talent Pool: Top CEO Concerns for 2018. It said that last year, 919 chief executives resigned, retired or were fired in North American companies. According to research, it’s the highest number in the last year decade.
Apparently these extreme numbers have prompted directors to make unreasonable demands of the chiefs who remain: “the expectations that boards have for CEOs is that they can do anything. In some cases they’re looking for a unicorn.”
Since unicorns don’t actually exist, I’m thankful DevelopIntelligence doesn’t have a board, so we aren’t forced to make decisions focused on returning dollars as quickly as possible to our investors while disregarding the long-term success of our client relationships.
In some cases, it’s completely reasonable for a Board or an activist investor to put pressure on a company to become a technology company. Take a rental car companies for example – they still use dot matrix printers to print up your rental car agreement. That’s an industry that needs to reframe it’s thoughts on technology – shifting their paradigm from IT as a cost-center to an technology as a market maker.
However, that’s not always the case. Don’t get me wrong, technology isn’t something most companies can do without if they want to thrive. But there’s a recurring theme of “let’s turn ourselves into a tech company,” and it’s flawed. Take the same car rental company as an example. A board will go to that CEO and say, “hey, you need to turn this into a technology company.”
The CEO will then try and execute, but the unicorn piece is, that CEO may not actually know how. Or, maybe they don’t have an idea that allows them to be a technology company that delivers cars. By not facing their limitations, but not seeking help to mitigate their leadership shortcomings, they’re setting themselves up for failure.
Now, let’s say you’re a traditional brick and mortar clothing retailer like JC Penney’s, Kohls or Nordstrom. More than likely you weren’t thinking about Amazon as a competitor because a few years ago they were still selling books, CDs and DVDs. Now that Amazon sells pretty much anything you can think of, the Kohls of the world have to play catch up, and they’re already behind.
It’s not that companies are averse to change, it’s that non-technology-based organizations are arriving to the party later than they should be, and it’s hurting them. Then, far too many companies still look at technology as a cost center. The IT department is viewed as a way to save money rather than a way to make money.
That’s the wrong attitude. It leads organizations to hang on to technology longer than they should because they’re trying to amortize it over a period of time. Or, they don’t adopt new technology because it’s not proven, and they don’t know what the ROI is.
Companies that see technology as a way to make money and to disrupt their industry are going to be more successful. However, it’s worth noting that those more traditional companies must also be smart enough not to lose sight of who they are – they must never endanger the foundation of their brand – because that brand is tightly linked to how they retain their existing customer base and attract new ones.
I view it all as a race. A race where I know – almost – all of my competitors. The question is, how can I innovate faster than my competitors so that I don’t have to win the race by 100 meters, but I still win?
The answer to that question is innovation. At the end of the day, if an organization doesn’t have a culture of innovation it’s not going to win. An innovative culture will let people experiment with new technologies that aren’t proven. It will promote collaboration and knock down silos. In the software world, it will build a more agile work environment. Training is also a key part of this kind of culture, but even though DevelopIntelligence is a training company, I won’t say that training is the silver bullet.
In addition to experimentation, less of that “walled garden” approach and cultivating the ability to pivot and change more quickly, companies have to make it okay to fail. The reason most tech companies can grow so quickly is because failing is part of their culture: They make it okay to fail as long as you learn from it.
According to the aforementioned article, companies are also challenged trying to build more sophisticated tech platforms. For instance, in an effort to be the technology leader in their industry, “some financial-services giants now have more software engineers than bankers and traders on their payrolls.” But where are most companies going to find the people to fill those jobs?
Currently, that talent doesn’t exist. Though that’s not as tragic as it may sound. Or, it wouldn’t be if companies were willing to retrain the people they have, rather than trying to buy the talent they need in a market that doesn’t have it.
Training is like an untapped resource that companies continuously overlook as a viable strategy to help them create great technical talent within their existing workforce. And that’s a shame because technology is not a cost center. It’s a way to stake your claim on your respective industry and make some money while you’re at it.