Press Release

CEOs find the key to deliver business change

2 March 2007 – Five key challenges to deliver strategic advantage have been identified by a group of leading CEOs.  The challenges, outlined in a report being published today by the Chartered Management Institute, focus on how leaders can better harness technology to drive business growth in the face of growing global competition. 
 
The report, called ‘Business Leadership of Technological Change’, was launched by Sir David Varney, former chairman of HM Revenue & Customs, who welcomed its recommendations in the context of his recent report on public service delivery to the Chancellor*.  It is based on the analysis of CEOs and CIOs who successfully delivered IT-led change in private and public-sector organisations ranging from Tesco and NHS Logistics to Astra Zeneca and the RNID.  It comes in the wake of research suggesting that 74 per cent of IT projects failed in 2005 – the same proportion as in 1980**.
 
Conducted over the past year, the report explores how leaders can create strategic value from effective IT change and secure employee commitment to change programmes.   Published in partnership with BT, Deloitte and Serco Group, it also outlines aspects of effective leadership behaviours that CEOs should adopt to drive change and calls on the CEO community to question their own understanding of the strategic implications IT can offer business.
 
Key issues for CEOs to tackle are:
• how to create long-term transformational value rather than implementation of one-off IT projects
• the need to build capability for ongoing change so that IT shapes new business models instead of being the business model
• how to establish a climate of open communication so that employees understand what is expected of them and stakeholders know what to expect
• the need to manage risk with confidence
• recognising the need for personal IT capability and learning about new IT issues so that IT change is driven from the top-down.
 
The research was carried out in association with the British Computer Society and Change Leadership Network and involved the systematic review of literature covering more than 1,000 IT projects and detailed interviews with 20 CEOs and CIOs.  It reveals that:
 
- many CEOs have limited interest in developing personal knowledge about technology, despite accepting its value in today’s economy
- too often, responsibility for change is passed from the CEO to technical specialists and the strategic value is ignored or misunderstood
- change programmes often become ‘tired’ after 18 months, but CEOs are failing to rejuvenate them.
 
Mary Chapman, chief executive of the Chartered Management Institute, says: “There are too many examples where large amounts of money have been written off with little achieved.  Often it is due to the ambivalence of senior executives who leave their CIOs and IT managers to explore the options and take the appropriate action.  This risk inherent in this approach is of a leadership vacuum.  CEOs who fail to provide strategic direction or show personal interest are unlikely to create the drive and inspiration in others that is required change to succeed.”
 
Recommendations coming out of the report include an initiative to start the debate about the strategic value of IT through a series of CEO-dialogue groups.  Plans are also underway to create an open source online tool to support on-going learning.
 
Andy Green, CEO of BT Global Services, addressed an audience of CEOs at the report’s launch. He said: "At a national level, leaders accept the pressing need to improve UK competitiveness and to deliver the desired reform of public services. IT has a huge role to play here if used effectively. It is important that leaders recognise the role they have to play in ensuring transformational IT projects deliver maximum value."

* Service Transformation: a Better Service For Citizens and Businesses, a Better Deal for Taxpayers, December 2006
** According to the Standish Group and Gartner 74 per cent of IT projects failed in 2005 – the same number as in 1980.