Sean Kearns - July 17, 2019

What Sets the Tech Strategy of US Business Leaders Apart?

This content was solely researched, written, and produced by FT Focus, a Financial Times company. The sponsor had no oversight or approval on the content.

The US ranks first on the World Economic Forum’s Global Competitiveness Index. It surpasses the 140 other countries on three out of 12 indicators, one of which is business dynamism. What does that competitiveness look like at the ground level?

Technology is central to the dynamism of US businesses, and investment has been soaring. The health sector, for instance, more than doubled its investment in IT from $2.8 billion in 2013 to $7.1 billion in 2017. Since 2012, Silicon Valley-based tech companies have brought in a total of 12,000 deals and $140 billion funding, significantly outperforming other global tech hubs.

That emphasis on technology reaches far beyond northern California – it permeates the economy. According to new FT Focus research, "Disruption in the C-suite" US business leaders, across nine sectors, are more than twice as likely as those in other countries to describe their organisations as tech pioneers – whereby their leadership team believes that all businesses are now technology businesses, and investment in new technologies is at the heart of their strategy. They are also most likely of all countries to say that they have a culture in which high-risk technology investments are encouraged (30% in the US compared with 14% on average).

What makes US business leaders, across sectors as diverse as manufacturing and financial services, so emboldened? The research reveals two factors that might explain it: smart technology management and a collaborative C-suite.

Smart technology management  

By 2020, 83% of organizations’ assets are expected to be in the cloud, as businesses take advantage of its speed and flexibility and the chance to scale up as and when they need to.

The cloud is considered essential to growth and transformation. But so is effective technology management, so it is critical for organizations to keep a close eye on how they use the cloud and how they govern that use. US firms recognize this: 74% of leaders say that their organization is intentionally maintaining a balance between keeping its assets on-premises and migrating them to the cloud. 

»Read more: How to prepare for your cloud migration 

A flexible, iterative approach to digital transformation also seems to be paying off for these leaders. About two-thirds (65%) say that their IT function uses continual learning from the business and customers to evolve their approach to setting a growth strategy (compared to 56% on average). And 61% say that a portfolio approach enables them to determine which IT assets and investments will drive a competitive advantage (compared to 47% on average).

Intuit’s ‘fixed, flexible, and free’ decision-making model is one example of this. The software company has three tiers of technology decisions. Some are fixed and standardized; some are flexible, with decisions made collaboratively by the business unit and IT; and in some cases, business units are free to choose their own technology – as long as they comply with organizational guidelines and processes and meet requirements for security and data protection.

Agile principles and practices are iterative, of course, and they help to support a portfolio approach. But a flexible approach does not mean dispensing with discipline: businesses also need to assess the impact of these approaches against a set of defined targets. Successful US businesses understand this, and measuring the success of agile practices is a key priority. Of all surveyed business leaders, those from the US are among the most likely to say that they have a clearly defined framework to track the success of agile across projects and business units.

»Read more: 5 Agile metrics to optimize business value

According to Mark Maybury, chief technology officer at Stanley Black & Decker, agile decision-making is crucial to business dynamism. “We're disciplined in what we decide,” he says. “We do risk analyses, technical analyses, and financial analyses. But we also strive for the ability to move quickly – there’s not a lot of process.
“We don’t call it IT,” he says. “We call it ‘business process technology.’ That’s because we see it as a transformative function, focused on outcomes.”

»Read more: Industry 4.0: What the fourth industrial revolution means for IT

Nurturing a collaborative C-suite

As digital transformation becomes ingrained in all parts of the business, the C-suite is gathering around it as a unifying goal. US companies illustrate this alignment: 69% of US respondents in our research say that the CIO and CEO are deeply aligned on tech strategy. Close to nine in 10 (87%), meanwhile, say that digital transformation has increased collaboration across the C-suite in developing new products and services.

As much as it unites, however, digital transformation can also cause tension – especially between IT and finance. Seven in 10 US leaders (69%) agree that digital transformation has made strategic differences between finance and IT leaders more, not less, pronounced. And a third say that in their organization, the role of the IT function in setting broader business strategy causes the strongest difference of opinion between the CIO and CFO.

So a closer C-suite might also be at times a more antagonistic C-suite. A collegiate leadership team is much better placed to manage technology across the enterprise, and US organizations are pursuing that alignment, but tensions between leaders could jeopardize their efforts. Each will have to find their space in a decision-making process that is as strategic as it is flexible. Get it right and, the dynamism that characterizes leading US firms should be set to continue

»Read more: Download the FT Focus report "Disruption in the C-suite

Our site uses cookies. By continuing to use our site, you are agreeing to our cookie policy.

Accept & Close