Monday, February 13, 2017

The Digital CIO’s Role in Transaction vs. Transformation

The CIO requires being confident to create and manage changes, being both strategic and hands-on.


Due to the ultra growth of information and deep learning curve of IT, becoming a CIO requires leadership influence, technical expertise, learning agility, and adaptive skills. Just like any other c-level executive, creating business value is what is expected from CIOs. However, the pace of changes in IT would force more CIOs into transformation-oriented digital leadership roles, because IT plays a significant role in driving the digital transformation of the company. It doesn’t mean though being transactional is bad and transformation is good, in the absolute. In fact, an effective leader needs to have both transformation and transaction levels and styles of thinking, behaving and acting.


Transformation is about what and why, and transaction is about how: Transformation is the leapfrogging changes, implying the fundamental changes from collective mentalities to underlying functions and processes. "Transactional" refers to operational transactions, taking an input at one end and churning it out at the other with processes in between. A “Transformational" means redesigning existing transactions to something new, being innovative/ creative and also introducing completely new transactions hopefully with a strategy that serves the organization well. It's easy enough to churn out the same old things even with minor modifications but to undertake real transformational change requires innovative leadership, technical know-how, and step-wise approach. It also doesn't mean transformational CIOs are superior to transactional CIOs in every perspective, and both attributes - transactional and transformative are needed in a CIO, otherwise, you will either end up with static uncompetitive technology or with the completely loose cannon who can throw the organization’s technology into turmoil.  


Transaction is to do things right; transformation is to do a right thing: Just transactional running the systems is going to shrink with emergent digital technology. Once IT is seen as strategic rather than tactical, IT can be transformational when the opportunity arises and it is appropriate to seize it. Until then, the rest of the business will feel that if the transactional CIO is talking, it's because there are problems, not opportunities, and won't want to listen. Any c-level executives have to carry on a conversation in their discipline and have strategic discussions with their peers. Here are some difference between transformational IT and transactional IT:
  • A transaction has a short-range view; a transformation has a long-range perspective.
  • A transaction needs plans, budgets, and designs detail steps. A transformation develops vision and strategies to achieve it.
  • A transaction is tactics,  A transformation is a strategy.
  • A transaction is about how; a transformation is what and why.
  • A transaction follows standard operating procedures. A transformation needs strategic guideline and policy.
  • A transaction focuses on goals for improvement. A transformation focuses on goals of innovation.
  • A transaction is inside a box; A transformation might need work cross box.
  • A Transaction seeks continuity. A transformation seeks to change.
  • A transaction focuses on a bottom line; a transformation is on the horizon.


The CIO requires being confident to create and manage changes, being both strategic and hands-on: The CIO must adopt the attitudes and styles of strategic leadership (transformational way), and also, must be willing to engage in conversations with his/her staff on some occasions about details (a transactional way) so the staff believes the CIO is not that far away from reality. It requires a leadership substance of vision and style that more closely matches the action-oriented style of senior executives and also has multidimensional intelligence, with some of the analytic and synthetic qualities that are commonly associated with successful executives.


IT leaders shifting from transactional managers to transformational leaders take thought leadership, transcendent wisdom, and trans-disciplinary skill. As many organizations are at an inflection point in digital transformation, the transformation-driven, effective CIOs can help to orchestrate the business change and transformation in vertical organizational structure, horizontal working structure, and social structure through the latest digital technology, efficient process and tools.

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