It is also imperative that a CEO visualize the big picture and uphold that vision for the rest of the company. Spending too much time in the nitty gritty code can get one bogged down with details. According to Steve Wozniak , Steve Jobs never wrote code or created original designs.
Another limitation to having a CEO who spends their time coding is that their communication prowess can get rusty. For some people, the more they code, the less they can effectively express their thoughts.
Leaders need to possess solid networking skills when representing their company, and spending all day coding does not help in developing those traits. While he never studied computer science , his humorous and inspirational personality has turned him into one of the most engaging leaders in Silicon Valley.
If a CEO wants to have a strong chance of success in the startup game, they need to have an understanding of both technical and business skillsets. Maintaining a knowledge of the technical side gives CEOs an edge in hiring, vision, and management. As the company expands, priorities change, and they have to be able to pivot into more of a managerial role. Being adept at balancing both the business and technical tasks at the appropriate times is the only way to poise a startup for success.
Skip Article Header. Skip to: Start of Article. The differences between approaches are clear: Cost Model: The cost model requires a commitment to maintaining an operating environment that relies on mature hardware, software and network architecture, with proven products that are stable and well understood by the staff.
Value Model: The value model is predicated on meeting the specific needs of the business community, often trading cost efficiency for new capability-building activities. In this model, business executives either wield a great deal of influence or control their own I. Hybrid Model: The hybrid model evolves when corporations try to optimize on both the cost and value dimensions.
The operating components and the capability-building resources are often separated, sometimes with different managers leading each. Over the past few years, we have seen more companies trying to use the hybrid model. This reflects the evolving partnership between the I. Few corporations follow the pure value approach to I. Reiner joined G. Reiner's charge is "to make information technology a competitive advantage for G.
We are seeing more and more examples of major corporations repositioning their I. As we track the growth of the Internet and the recent penetration of electronic commerce in many sectors, it is clear that the way many corporations do business will change significantly. Using new and different channels will change not only the way they do business with customers, but also their cost structures.
This changing business environment requires different business models, processes and relationships. One size may not fit all, but the imperative fits everyone: C. Probably the earliest and certainly the most prominent example of a C. Quite simply, for most corporations, we see little room for debate: I. And the C. Going forward, the corporate I. Make I. The biggest decision the C. The visibility alone will help keep the management team focused on every opportunity to build competitive advantage as well as on improving returns on the corporation's I.
Manage for value creation. The key here lies in recognizing that this decision drives the entire opportunity to build competitive advantage with I. Managing for value requires that I. Manage I. After determining the overall investment strategy and the proper role of I. Deploy the best I. This decision must be explicit and tied to the corporation's potential to build competitive advantage with I.
There are three options: the cost model, the value model or a hybrid model that draws on the key objectives of both. We believe most C. While a corporation's potential for leveraging I. To capitalize on these opportunities, C. The early winners have already figured out that tomorrow's opportunities for competitive advantage will be driven by information and the ability to use it, in real time, across an increasingly complex, global landscape.
At the Capital One Financial Corporation, one of the largest providers of MasterCard and Visa credit cards in the world, information technology is completely intertwined with the business and has been since the company's founders embarked on a mission to market credit cards to different types of customers just over a decade ago. Based in Falls Church, Va. By using proprietary integrated systems to manage large volumes of data, the company continually tests new product offerings and pricing combinations on an array of products, including numerous Platinum and Gold credit cards as well as secured and customized credit cards for consumers with limited credit history.
As of June , Capital One had more than The company had its beginnings in when two former banking-industry consultants, Nigel Morris and Richard Fairbank, concluded that the field was wide open for credit-card companies that could anticipate credit terms that would appeal to very targeted sets of customers.
While pitching this marketing concept to banks across the country, they also met with representatives from the Oracle Corporation to discuss distributed relational database technology.
Their vision was a system into which they could pour all kinds of information -- credit-card bureau data, demographics, purchased lists -- then have the system crunch through hundreds of what-if scenarios to spit out carefully screened lists of consumers. Within 18 months, Mr.
Morris and Mr. Fairbank had signed a deal with Signet Bank to market targeted credit cards. Their concept paid off more quickly than they anticipated: In one year, they doubled the number of Signet cardholders to 2 million. The real challenge came in , when Signet spun off its credit-card division to form Capital One Financial.
Although the information-enabled marketing strategy continued to prove successful, the systems supporting the strategy had become woefully inadequate over the years. Critical information management had been outsourced, and legacy mainframe systems were outdated. To make matters worse, the I. Enter new chief information officer Jim Donehey, formerly executive director of I. Donehey recognized that Capital One's systems were held together with masking tape and bubble gum, but he also saw the tremendous opportunity.
Over the next several years, Mr. Donehey, along with Mr. Morris, the chief operating officer, and Mr. Fairbank, the chief executive, led a billion-dollar-plus investment in I. The threesome immediately got rid of the traditional, compartmentalized I. Scrapping the service-station model of I. This triumvirate's mission was to break up departmental logjams and let development managers focus on overarching business rationales.
To increase the flow of ideas, Mr. Donehey eliminated the position of head of application development and created the new position of business information officer, who would deliver the best solution for the business rather than shopping the latest technology around to the different departments.
After they broke down organizational barriers, Capital One's senior executives turned their attention to the metrics used to analyze I. Instead of relying on orthodox return-on-investment figures, which do not give any sense of the size of the investments being evaluated, they decided to use net-present-value calculations.
This helped the executives better understand how to invest to maximize their resources; the method proved so successful that it has since become the company-wide standard metric. At the same time, the company invested tens of millions of dollars in replacing and modernizing legacy systems so business strategy would be supported more effectively.
Now, more than production databases plow through more than 7, live product tests each year. More than 10 million accounts, averaging 14 transactions a month apiece, are serviced daily. In September , Capital One went live with an object-based business application, and over the next two to three years it will replace remaining mainframes and client-server and desktop applications with a distributed, three-tier architecture because senior executives realized that using a more modern architecture would enable Capital One's systems to adjust rapidly to changing business conditions.
At Capital One, I. Business leaders that feel like they lost funding for their initiatives may become detractors. For transformation programs, it also may require stretching the governance model of how to develop and present business cases. Early stages of the program are best managed through experiments, proof of concepts and pilots that may not have hardened timelines or well estimated financial models.
CEOs have to challenge the culture, mindset, and existing governance models to help get some air beneath the wings so that the transformation program can takeoff. In the early stages of the program it often requires pulling the best, brightest, fastest, most collaborative, and top agile thinkers from different parts of the organization to leave their day jobs behind and immerse themselves in the program.
The CIO has to make it clear who needs to be on the team and help to get their managers to realign responsibilities. Occasionally, the CEO is needed to resolve conflicts and clear paths to get a winning team on the program. There are several common themes. Operationally focused companies often struggle with adopting agile practices and mindsets. Sales driven companies may have difficulties adopting product management practices. If the program calls for a more centralized technology platforms and data architectures, some business groups running shadow IT programs may resist.
Some people are used to driving decisions based on experience and intuition while others may be overly ambitious with data driven decision making and strive for data perfection. These are examples and no two organizations have the exact same collection of issues. The most important thing for a transformation leadership team to do is to have regular open discussions about the problems and their impacts. The CEO should be part of these discussions and should be part of the team with a defined role in how the most impacting cultural conflicts will be addressed.
More importantly, the CEO needs to own and define the future culture of the organization. Consider these recommendations for when you start a digital transformation program or kickoff one of its major initiatives.
All of these practices need to be revisited as the program goes from early formation.
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