CIOs are focusing less on tech, and more on teamwork

Under stress, employees must be at the center of the strategy

“Instead of selling something for $1, could we price it at $1.20 and still make the sale? Or do we have to drop the price to 90 cents?”

That’s the question CIO Max Chan had as industrywide consolidation and shrinking profit margins began to impact Avnet, one of the world’s largest technology distributors.

Chan had a technology solution he and a team had been thinking about–feeding reams of historical pricing data into machine-learning models to see if they could set optimal prices in something close to real time. If successful, the group believed the new program would help boost margins when the market was strong and limit losses when the market dipped.

Chan’s biggest roadblock was Avnet’s sales team, who didn’t trust the model. They continued to sell components at prices that had worked for them in the past. But Chan kept publishing the results that the system could generate, and eventually the message got through: Salespeople started using the tool, and margins inched up.

Chan’s experiment illustrates one of the major challenges that CIOs face today: Companies can invest all they want in advanced digital technologies, from predictive analytics to deep learning. But without a host of critical human elements, they’re unlikely to see those investments pay off.

That’s one of several takeaways in a study by ServiceNow and ESI ThoughtLab that explores how effective large enterprises are at using technology to drive innovation. The survey includes responses from CIOs, CEOs, COOs, and other executives at more than 350 organizations in 12 countries and across five major industries.

Other key findings from the survey:

  • Less than 20% of executives surveyed say their company is in the advanced stage of becoming more customer centric (19%), improving the employee experience (12%), or reinventing processes (4%).
  • Only 31% of surveyed executives, for example, say their company’s CIO is highly or extremely effective at driving innovation.

To change those perceptions, CIOs need to make sure their organizations are prepared to work in more innovative ways.

That means focusing on more than just technology, says Ari Lightman, professor of digital media and marketing at Carnegie Mellon University. “Without an emphasis on human-centered design, data-oriented cultures, and re-imagining work in terms of how it is allocated, completed and evaluated, innovation will most likely stay in the ideation space and not in execution and widespread adoption,” he says.

CIOs should focus technology investments in areas where employees are most likely to use new tools, encouraging grassroots innovation within their own teams, and leading companywide pilots that showcase the benefits of new tech.

“We need to wake up each morning and go to bed each night thinking about how to be seen as both the enabler and catalyst of change,” says Lev Gonick, CIO at Arizona State University. Gonick should know: Last year ASU topped U.S. News & World Report’s list of the most innovative schools in America for the fifth consecutive year.