CIO – 25 years later, is the role becoming outdated?

I recently realized that this September will be the 25th anniversary of the launch of CIO Magazine.

I wrote the cover piece for that first issue — “The New Breed of CIO” — and the first paragraph of my article discussed the emergence of a new group of business leaders who were making “the leap from ‘manager of information systems’ to ‘chief information officer…’ and that these CIOs were taking on a new duty as “promoter of the company’s ‘information vision.’”

And even more recently, I also have come across Gartner’s new “Predicts 2012″ report that discusses “how the control of technology and technology-driven decisions is shifting out of the hands of IT organizations. New forces that are not easily controlled by IT are pushing themselves to the forefront of IT spending. Specifically, the forces of cloud computing, social media and social networking, mobility and information management are all evolving at a rapid pace.”

And, maybe most interesting (and most ominous for CIOs), Gartner says that “Business unit stakeholders often recognize the value of new technology before IT departments can harness it.”

There’s a lot to be said for the Garnter position –in fact, it connects with the “Schumpeter on Steroids” description that has come up in previous postings in this blog — and I plan to address and explore the Gartner insights in future postings.

In the meantime, here are some links that some might find of interest.

My September 1987 article about “The New Breed of CIO” (my apologies for the fuzziness of the PDF).

Three documents from Gartner about their Predicts 2012 report:

A press release about the report

A summary of the report

A PDF with more extended discussion of the report


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The “Socialism” of Social Media

This relatively short article is packed with interesting ideas .. some explicitly mentioned, some not so much.

My View On ‘The New Socialism’

These three points particularly jumped out at me.

A – Online social media is growing at an extraordinary rate, already representing an extraordinary share of the total time that many consumers spend on media.

B – There are no better examples of the changing business and pricing models than newspaper classifieds and Craigslist.

1. The former has made all participants — sellers, advertisers, subscribers — pay dearly, while pocketing outsized profit margins.
2. The latter only requires a tiny fraction of the participants to pay relatively little, and still pockets outsize profit margins.

Of course, the $100 million that Craigslist might generate this year is only a fraction of the billions of dollars that it displaced.

Isn’t this combination of #1 and #2 a huge (socialist?) redistribution of wealth?!

C – Online media exposures are growing at an extraordinary rate, maybe even exponentially. The future is not about delivering “cheaper, faster” impressions. It is about delivering results — helping people find things, helping people buy things, helping people sell things.

I am not sure that is quite right, but it definitely is an interesting perspective!

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Revisiting Schumpeter on Steroids

It is great to see that The Economist is using “Schumpeter” as the name for a new column on business and management that it is launching.

I am looking forward to becoming a loyal reader.

In response to the launch of this new column, I am posting this slightly revised version of an item that I wrote a little over two years ago.

Back then, I made the argument that it is vital to begin to re-think Schumpeter’s important contributions and his signature notion of how “the perennial gale of creative destruction” plays a central role in capitalism.

Despite all the deserved attention that Schumpeter is getting, there is an important issue that also merits discussion, namely:

The way that quantitative changes in the amount and the rate of Schumpeterian transformation are triggering important qualitative changes in the nature of Schumpeter’s creative destruction.

In fact, a tsunami of “Industrial-Strength Creative Destruction” is flooding across virtually every part of the world…and our encounter with “Schumpeter on Steroids” is cramming unprecedented change and transformation into every nook and cranny of the planet.

If you look back to the first half of the 20th century, you can see that the industrialization and mass-production of manufactured goods began to radically change not only the quantity of those goods, but also the nature of the goods that were produced and the roles that those products played in our lives.

In an analogous sense, the new “mass-production of creative destruction” has important implications for the role and nature of Schumpeterian change…and for the role and nature of innovation in today’s world.

I’ve touched upon these issues in several “Articles from the Archives” that already have made it onto this site (for example, In Praise of Bad Ideas and Nobel Laureate on R&D Changes), and I expect to be exploring other implications – specific and general – in future postings.

So, stay tuned for more…much more.

In the meantime, here are few links to a selection of notable recent items about Schumpeter and to the book that spurred my initial posting back in 2007, the biography of Schumpeter by Pulitzer-winning historian Thomas K. McCraw.

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Saving the news by exterminating parasites?

Here’s yet another article that argues that on-paper publishers should try to save their businesses by focusing on getting paid for the content that they currently are putting online.

Exterminate the Parasites
A radical plan to save old media.

The more of these arguments that I read, the more it strikes me that the people who are focusing this type of pay-for-content model are caught in a monkey trap:

Because they won’t let go of what they have in their hand, their self-imprisonment is preventing them from pursuing opportunities that could very well lead to their survival.

This passage from the article is particularly interesting (emphasis mine):

Marc Andreessen, another Internet billionaire, thinks most of the old-guard publishers will start forcing readers to pay subscription fees. But if the old companies do start charging fees, they will drive away readers. Advertisers will go where the audience is—which means they’ll spend more of their advertising dollars on the upstart sites. The new guys will start making serious money, and will be able to hire reporters and editors away from the old-guard companies to create their own original material. “That’s the thesis,” Andreessen says. It’s partly why Andreessen has recently invested in two Internet news publications—Business Insider and Talking Points Memo.

Which leads to speculation about this possible outcome:

So maybe, one day, the Huffington Post will become the equivalent of The New York Times—perhaps operated by the same writers and editors and sales reps who used to work for the Times.

This forecast is over-stating things as far as the demise of the NYTimes is concerned, but it looks like a very possible outcome for a lot of other traditional media organizations.

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News Content Is Worth Zero

There is a very interesting piece in Editor & Publisher by columnist Steve Outing, who has produced a steady stream of excellent commentary on the impact of the Web on journalism:

Your News Content Is Worth Zero to Digital Consumers

Outing makes a number of points in this piece that definitely are worth further thought and consideration, including:
1- The potential of mobile as big-time opportunity for news publishers … and especially opportunities for phone applications.
2 – The importance of recognizing that “Most people seem to prefer to spend money on things they get to ‘keep’” … rather than “emphemeral” online news that they only read once.

Here are a few Immediate reactions to the piece:

1 – I am not as optimistic about apps as Outing seems to be. His position is not stupid; I just don’t see much promise for revenues. Apps strike me as one-time purchases that would not produce enough revenue to support a news operation.

2 – On the other hand, his points about the value of “things that people get to keep” versus the lack of value of “ephemeral news” are terrific. Revenue from memberships also seems promising. For example, Outing mentions “participation subscriptions,” which seems like a particularly promising approach that could fit nicely with the “Core Constituencies” model on which I have worked in a couple of recent projects. [This does bring to mind that one "thing that people can keep" is membership / subscription that allows participation in an on-going community (see 5 below). My feeling is that traditional news organizations have under-estimated this as an opportunity because it requires them to re-think of the kind of editorial that they will need to produce. It also is important to keep an open might about the types of organizations that might offer "memberships." For instance, Angie's list might be an example that news organizations might want to look at more closely for insights.]

3- The suggestions that Outing got from Stanford psychology professor B.J. Fogg definitely are worth additional examination and consideration, including Fogg’s argument advice that it is important to use physical-world analogs when evaluating any potential business model for online news enterprises.

4 – I think I also may be more optimistic than Outing is about finding real-world examples of new models for online journalism. For instance, IDG (parent of Computerworld, etc.) provides an example of tiered content (free and additional value) that has had success, and there are other B2B publishers have been able to make this work. Other variations on this include research / consulting firms like Nielsen, Gallup, Gartner, eMarketer, Forrester … that produce both free and (very high) premium content.

6 – Outing did not mention it, but there also could be insights from taking a closer look at the robust clusters of business / revenue opportunities have sprung up around free software that is available via “open source” initiatives … of which there are surprising numbers.

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End of business as usual?

I learned a lot from working on my article for the Project Management Institute’s PM Network magazine.

And one of the things to which I’ve especially been giving a lot of thought is this comment from the piece:

“More and more of the world’s GDP is being produced in the form of projects … The balance between business-as-usual and projects is inexorably shifting toward projects, with the result that demand for project managers is exceeding supply by a very large margin, and it is a trend that I think is going to be continuing. … I think project management may be the fastest growing profession that the world has ever seen.”
–  Terence Cooke-Davies, Ph.D., executive chairman of Human Systems International Ltd., a consulting firm in London, England.

This strikes me as an important and very useful observation.

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Subtle embedding of high-danger risks

The 2008 crisis certainly revealed the risk-management shortcomings in the financial services sector.

However, the problems in financial services are simply the most visible evidence of ways in which high-danger risks have come to pervade the business arena and now are subtly embedded in all sorts of business processes.

Consider, for example, the way in which the design of today’s performance-based compensation packages, not just in banking but in almost every sector, underestimate risk factors connected to business decisions, a development which gives employees and managers greater incentives to take risks.

… that generate severe adverse consequences with small probability but, in return, offer generous compensation the rest of the time.

… managers collect premiums in ordinary times for what could be called disaster insurance” … Until the disaster strikes, “they can pocket those premiums.”

There’s more discussion of this in the second installment of my three-part Special Report on Enterprise Risk Management (ERM) for Risk & Insurance Magazine.

This includes important points that are made

Here are links to my articles:

Learning From ERM’s Year of Living Dangerously

Enterprise Risk Management Derailed?

Ratings Analysts Speak on ERM

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Rewards and risks confront risk expert careers

A great example of the double-edge nature of risk and reward is provided by the situation that is confronting risk managers.

“ERM [Enterprise Risk Management] provides an absolutely unbelievable opportunity [for career advancement] for a risk manager” according to an executive recruiter who specializes in risk professionals — but who also warns that, on the other hand,  “I’ve seen situations where … eventually the risk manager ends up losing his or her job.”

There’s more discussion of this and related issues in the third installment of my three-part Special Report on Enterprise Risk Management (ERM) for Risk & Insurance Magazine.

Here are links to articles and sidebars in that installment.

The Double-Edged Gift of ERM

Raising the Risk Executive’s Profile

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Risk Management 2.0 connects with new priorities

Risk management is soaring as a corporate priority.

To pick just one indication, a recent survey of corporate board members found that

70 percent of audit committee members and more than 65 percent of the CFOs ranked ERM [Enterprise Risk Management] as the No. 1 challenge for their organizations over the next 12 months, overshadowing worries about improving financial reporting and internal controls.

The why’s, what’s and how’s behind this rising priority is explored in the first installment of my three-part Special Report on Enterprise Risk Management (ERM) for Risk & Insurance Magazine.

Here are links to articles and sidebars the that first installment.

Reflections on ERM Inflections

ERM’s Major Challenges

ERM Makes a Case for Itself at Cisco

And here are links to a few  earlier pieces that I’ve written about ERM.

Ratings’ Enterprise Five

ERM Program at Risk School Takes Flight

Under-the-Radar Changes in Curricula

State School Reinvents Risk Management Program

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More on Risky Business

Here are my latest articles for Risk & Insurance magazine in my on-going coverage of emerging trends in the ways in which businesses are dealing with risk.

Ratings’ Enterprise Five
S&P’s Hands-On Practitioner

These pieces provide profiles of the executives at the Standard & Poor’s, AM Best and Fitch credit ratings firms who are leading the agencies’ ramped-up initiatives to evaluate companies’ risk management programs … and to more significantly use those evaluations as criteria in their ratings of the creditworthiness of those companies.

Stay tune for the major, three-installment Enterprise Risk Management Special Report on which I am working and which will be appearing in early 2009.

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