In my previous opinion piece I wrote about a number of dilemmas that the current CIO can face, against the background of the political instability caused by the economic confrontations between the US and China. At that time, I offered to give concrete guidance with which the CIO can confidently enter the boardroom. Below five points of attention.
- Understand the world. As a CIO you of course know which new technologies are important for your company. But as a CIO you are also “chief” and you are supposed to look beyond your profession. First of all you have to understand what the battle between Trump and Xi is all about. In the transition from the classical industrial to the digital world, totally new mechanisms of governance and market arise. The world is globalisating due to digitization. Both on a personal level and on a company level, ways of working and communication are changing. It is not for nothing that almost all organizations are digitizing their business model, both in terms of technology internally and for the market. They will do anything, including a digital arms race or even a digital war, to position themselves best. And you, as CIO of a Dutch organization, are supposed to understand this playing field.
- Know the position of your organization. Whether you work for a multinational or for a smaller company: the world is controlled by the great powers on earth and you have to take that into account. Both Xi and Trump tend to run their country as a company. From that point of view, they will want to make deals with countries and large companies that come in handy, while they will create obstacles for countries and companies that work against them. Do you know how your company is doing? Does it make advanced technology? And does it want to export to all sorts of countries, including the US and China? Or do you work for a company that uses both Chinese and American technology? And how dependent are you on those technologies? What are your alternatives? You will need to know all of this exactly before you visit the boardroom.
- Mitigate vulnerabilities. Almost every company is potentially vulnerable to a major digital arms race or digital war as it now threatens. It is good to realize that unlike classical war gear, which is usually manufactured by government-related companies on an exclusive basis, technologies for the digital arms race can generally be made and bought by everyone. AI, robots, drones, data science or cyber security knowledge, virtual reality equipment, it is all so-called dual use technology: suitable for both peaceful use and digital warfare. With that, companies that make modern technology must suddenly be considered as potential suppliers for a digital arms race, so as part of the digital war industry. ASML, ASMI, NXP, TomTom, Fox-IT and many other renowned technology companies they all make equipment or systems that make of important for the digital arms race. Until recently, the CEOs and CIOs of these companies had not realized that. But other companies that use the aforementioned technologies are also vulnerable, because they have to buy technology from Chinese or American parties and that supply line may be at stake if the technology war between China and the US is actually flaring up. See what happens with Huawei. As a CIO you will have to ask yourself where your company is in this complex field and how you can reduce the risks. To what extent should your company bow to the wishes of China or the US? You will often have to consult with the relevant government to get a clear picture of who can be purchased, to whom can still be supplied, and so on.
- Calculate the costs. As a CIO you will have to set up a new strategy to safeguard the technology side of your company. That will entail costs. Huawei suddenly had to develop its own operating system when the US threatened to stop delivering Android technology. You may have to set up different scenarios with different cost aspects and prepare the Board for the different options.
- Communicate in all clarity. Finally, perhaps the most important thing: make sure you communicate clearly to the Board. What are the options, what are the costs, how do you intend to implement this? If you communicate a weak story clearly, you are more likely to succeed than if you have a fantastic plan, but you communicates poorly. You can learn something from Obama and Trump in that regard. Obama brought well-thought out visions that were widely appreciated. But did his messages have sufficient effect? With a lot of noise Trump brings badly thought-out messages via Twitter. He scores strongly in the short term, as evidenced by the stock market movements. The question is whether it is effective in the long term opposite the Chinese long-term thinkers. Therefore, take the character and composition of your Board into consideration whether you should choose the Obama or Trump approach. Most Boards rarely read elaborate reports, but clear one-liners they certainly remember.