by Sven Blumberg, Oliver Bossert, Klaas Ole Kürtz, and Kristin Tuot
In recent decades, the roles of technology leaders such as CIOs and CTOs have evolved from implementing business requirements to shaping their organizations and leading business innovation with a tech-forward approach. Today, technology leaders are grappling with an increasing number of geopolitical and macroeconomic shifts—including tightening local regulations, workforce challenges, and supply chain disruptions—which have a direct impact on technology decisions and road maps. Meanwhile, future threats such as energy and network outages, hardware scarcity, and cyber threats loom on the horizon.
Amid this volatility, technology executives must understand their companies’ global technology footprints, assess their impact on the business, and develop effective risk-mitigation strategies. At the same time, IT leaders must not lose sight of ongoing initiatives to future-proof the IT foundation. These often include upgrading the technology operating model, developing technical talent, modernizing the tech stack, migrating to cloud or new core platforms, mastering interdependencies, and increasing productivity.
None of this is possible without close partnership and collaboration between business and IT leaders. Some business leaders are still stuck in the “it’s not my problem” mindset and are quick to blame IT when challenges arise. While there is often room for improvement on the IT side, business leaders must also step up and take ownership, especially since small business decisions can have a butterfly effect on technology systems (for example, by increasing technical debt).
Six priorities for a joint transformation
Leading CIOs and CTOs from across industries came together at McKinsey’s 19th annual IT conference to discuss how to navigate these growing interdependencies and co-own the tech and business transformation. Six key priorities emerged.
1. Invest in communication and mutual understanding
True co-ownership is built on mutual understanding between business and technology leaders. This means that CIOs and CTOs need to invest in communicating and simplifying some of the complexity of IT, making it easier for business leaders to understand how technology can support the business and vice versa. Some tech leaders have been able to make progress in this direction by bucketing capabilities and platforms, developing clear KPIs, and making the most of digital twins.
2. Aim for radical collaboration
Technology leaders discussed their ambitions to raise the bar and achieve a new level of collaboration. For example, the chairman of an industry consortium focusing on data use cases shared how radical and open collaboration enabled interoperability in a complex stakeholder landscape spanning the entire industry value chain. Similarly, an executive from a global financial services company described how collaboration between IT and the business was made possible by the formation of empowered platform teams with end-to-end ownership and accountability.
3. Deepen business expertise throughout the IT organization
Ownership is shared among people, not roles; therefore, it is crucial for tech leaders and employees at every level to establish business credibility. An executive from a major telco provider emphasized how important it is for AI developers to gain expertise in their respective business areas so they can work closely with business leaders and maximize the impact of AI. The chief information security officer (CISO) of a global health player emphasized the benefits of facilitating conversations between the business and IT on every level. These conversations can help IT employees develop a holistic perspective and gain a more nuanced understanding of how their work has an impact on the ground—for example, to mitigate risk in an operating room.
4. Embrace modularity
IT leaders can enhance collaboration with the business by embracing modularity and breaking down complex systems into smaller components. It takes time and patience, as well as discipline and the right guardrails, but a modular IT landscape can support both stability and growth. An executive who leads common platforms at a global financial services firm discussed the company’s multistep process to achieve modularity. The process involved abstracting from systems to capabilities to true IT–business platforms that can come together to enable a more flexible and versatile business.
5. Nurture and enable tech talent
There is a growing need for technical competencies throughout the organization—and not just in traditional IT roles. According to a participant in the talent space, leaders should look beyond roles and take a skills-based approach to attracting, developing, and retaining their workforce. This involves identifying adjacent skills that can be developed and combined to fill the needs of similar or future roles. For example, a CIO at an industrial company described how moving from a team of “managers of managers” to a more tech-savvy, integrated team structure elevated the IT organization and enabled enterprise agility.
6. Measure what needs to get done and keep evolving
Management approaches must also evolve along with the technology. Several speakers emphasized the growing importance of measuring transformation progress to ensure continued success. One executive cultivated transparency by developing “maturity indices” for platforms to share their progress with both business and IT owners.
The chief digital officer (CDO) of a logistics firm discussed the company’s transformation from a full IT services provider to a set of collaborative, self-organizing teams. But the journey doesn’t end there: it is critical to ensure that self-organizing teams continue to evolve and do not calcify into new siloes in the organization.
Today, business is IT and IT is business. To lead a joint transformation, technology and business leaders must fully embrace co-ownership and take practical steps toward mutual understanding, communication, and action.
Sven Blumberg is a senior partner in McKinsey’s Düsseldorf office, where Kristin Tuot is a partner; Oliver Bossert is a partner in the Frankfurt office; and Klaas Ole Kürtz is a senior practice manager for McKinsey Technology, based in the Hamburg office.