Ensuring operational excellence versus accelerating business growth has long been a conundrum (and trade-off) for IT. Greater prominence and honed IT strategies have today’s IT leaders better positioned to finally strike the right balance.
Achieving operational excellence while deploying innovative technologies is not an either/or proposition as far as Christian Mate is concerned. Both are critical for meeting the responsibilities of the job of CIO, which requires the staid mantra of “keep the lights on” while concentrating on the more exciting innovating for growth, he says.
“To some extent, folks expect IT to be there like a dial tone when you pick up a phone,” or, “the referee at a football game, but no one noticed you,” says Mate, CIO of home health provider Elara Caring.
Operational excellence for Mate means ensuring a new employee has the right equipment and applications on day one and every day thereafter. That’s no small task for IT given that Elara operates in 200 locations in 17 states, and has 26,000 caregivers and 60,000 patients.
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What helps Mate and his team achieve the push-and-pull of digitizing while maintaining quality service is Elara’s culture, which encourages employees to experiment — but make decisions quickly and fail fast when projects are not panning out — as well as investing in people who can bring new ideas and perspectives.
Christian Mate, CIO, Elara Caring
Elara Caring
CIOs have more tactical aspirations right now, especially with regard to digital initiatives, according to Gartner’s 2023 CIO and Technology Executive Agenda. But while the report found that growth was important, it was outranked by improving the customer experience and operational excellence.
That is a tall order for CIOs, who feel the pressure to do it all. “This creates large problems for the CIO and IT department as they look to create the next-generation IT environment and manage day-to-day challenges such as cybersecurity, digital business technology platform development, and operational excellence,” according to the report.
Only 10% of tech executives will be successful at driving long-term growth, according to new leadership predictions from Forrester. This is because “a large number of tech leaders … just don’t focus on growth. They are typically focused on service delivery and quality,’’ says Matthew Guarini, vice president and senior research director at Forrester.
Those who are transitioning to a growth mindset “often lack a seat at the growth table and/or do not have the shared accountabilities with the business that are necessary,’’ Guarini says. The CIOs who do have a seat at the table and great business alignment, “just don’t deliver success,’’ he says. “This leaves a small percentage — 10% in this case — of leaders that will deliver long-term growth successfully.”
Tech leaders must focus on a business-aligned tech strategy to deliver on the competing mandates, Guarini says.
“A business-aligned technology strategy is built on architecture and agility, the ‘what’ and the ‘how’ of better alignment,’’ he explains. “Alignment also requires a commitment to take a human-centric approach to technology to collaborate effectively. Performance improves when the culture of collaboration is strong.”
That’s the trick: figuring out how to keep everyone happy. Here, CIOs and other IT leaders discuss their strategies for ensuring IT excellence in support of business growth.
Just listen
With more than 460,000 members and $9.7 billion in assets, Teachers Federal Credit Union is already among the largest credit unions in the US. Still, CTO Suresh Renganathan has the lofty goal of making TFCU “America’s credit union.”
Renganathan is keenly aware that to do so requires not only investing in technology to digitally transform its processes but also practicing the principle of “people helping people,’’ and balancing the ability to innovate and grow with achieving efficiencies. “Internally, we say, ‘Let’s perform while we transform,’’’ Renganathan says.
Suresh Renganathan, CTO, Teachers Federal Credit Union
TFCU
While adopting and maintaining an agile approach to adapt to industry changes more quickly is paramount, there can be an “overemphasis on technology and expectations, like AI, and assuming everything will be solved by tech,” he says.
Echoing Guarini, Renganathan says he has instituted cross-functional collaboration and a continuous feedback loop using traditional and digital channels to collect feedback on what works and what doesn’t. “That bridges a gap between innovation and operational excellence,” he says.
Truly listening to what the business wants and needs and asking questions while empowering his team to experiment is of paramount importance, agrees Eben Hewitt, CIO of Hyatt Hotels.
“My overarching priority is ensuring my team’s work is grounded in listening and finding ways for technology to create property-level flexibility and enable organizational growth through innovation,’’ Hewitt says. “Thoughtful consideration of design and systems is truly an act of empathy, imagination, and structural rigor.”
Hyatt’s experimental mindset and listen-first approach are heavily applied to IT’s pursuit of innovation, he says. By taking an agile approach to work, IT is “constantly testing and learning to identify ways to create operational efficiencies and enhanced experiences based on what we hear from guests and colleagues.”
Plant strong roots
Yet, CIOs admit it is not always easy to strike a balance. San Juan-based Banco Popular has set three main priorities for IT: Build a strong technology foundation to better prepare the bank for the future, provide a digital customer experience, and strengthen its data foundation.
“The analogy we often use is of a tree, making sure we have very strong roots and don’t lose focus on stability, reliability, availability, and efficiency,” says Camille Burckhart, executive vice president and chief information and digital strategy officer. “We are certainly focused on transforming the business and ensuring we stay ahead, but never losing site of those strong roots.”
Camille Burckhart, EVP and chief information and digital strategy officer, Banco Popular
Banco Popular
But meeting these objectives can be a challenge, Burckhart says. “If you only have innovation and transformation without making sure the operation runs stable, you run into trouble. But when you have a very laser focus on both you can have a healthy balance and ensure operational excellence doesn’t inhibit your desire to innovate.”
Another challenge is that the days of implementing technology and not upgrading for a couple of years are over, notes Steve Taylor, senior vice president and CIO of mortgage subservicer Cenlar.
“We are constantly having to raise our game. It’s a challenge to always stay current and ahead of the game,’’ he says. “For us to drive operational efficiency, we can’t just be leaning backward. We always have to look to do things more effectively and provide better service to our clients that our competition hasn’t already given them.”
This requires moving faster and more effectively, which Taylor says he constantly preaches to his team, especially in the area of security. “The security team validates we are secure, but the problem is that the hackers are finding more ways of hacking. So we always have to be upping our game or we’ll fall behind and then it’s too late to catch up again.”
Hewitt says achieving operational excellence alongside growth is always a balancing act. “I think of it almost like a machine learning algorithm called ‘multi-armed bandit,’” that has two axes: exploit and explore, he says.
“It’s a way for, say, a recommender engine to determine which products to offer to which customers,’’ he explains. “That might mean taking advantage of the tried and true two-thirds of the time and then running smart, inexpensive, quick proof-of-concept experiments to determine what might have legs.”
Eben Hewitt, CIO, Hyatt Hotels
Hyatt Hotels
Hewitt discusses this in his book, Technology Strategy Patterns, noting that post-pandemic, it’s easy to deprioritize strategy and think that it might be foolish to plan out a year in advance because of unpredictability. “But that’s not a good enough reason not to. One can be tactful and allocate resources strategically, while still being agile,” he says.
For example, IT is working on building a simpler technology stack to improve on-property efficiency for Hyatt’s nearly 1,300 hotels around the world, as well as more customized systems to drive competitive advantage and improve the guest experience. One move in that direction was a recently announced partnership with Sabre to upgrade its central reservation system.
Don’t forget the basics — and just get it done
Cenlar’s IT group uses technology internally and ensures it goes through all the appropriate validation and quality assurance processes before deploying it to clients. Systems should never go out too early just to meet a timeframe, Taylor stresses, noting that quality is better than speed.
“Make sure that what you put out there is the best product possible,’’ he says. “There are so many companies trying to get out there quickly. … We are ensuring that we are putting out the best-quality product so that we can stay current.”
In the rush to innovate, teams can forget the basics, such as insufficient testing, so constant monitoring is crucial to ensure you’re providing value, adds TFCU’s Renganathan.
He learned that the hard way. When Renganathan was spearheading digital at his previous company, Farmers Group Insurance, IT wanted to bring operational excellence to its customer contact management system. His team came up with a concept for funneling all customer communications in a way so that customers would receive one or two responses “in a meaningful way.”
But in the rush to deploy the new feature, “it triggered mass communications in a wrong way,’’ Renganathan recalls, and created a lot of reputational risks that IT had to spend days fixing because there were no clear and stringent operational practices.
That meant having to let “the urgent things interrupt the important things,” he says. “Most departments had to drop everything.” It’s tempting to rush to deploy in the name of speed to market, he says. It’s also important not to underestimate stakeholder resistance to change at times.
“Companies can stick stubbornly to something without pivoting. That’s a pitfall, and it is critical to always have a very comprehensive risk assessment practice in place,” Renganathan says. “We live in a very sensitive world.”
Purpose-build teams for success
Achieving the ability to innovate and grow while servicing customers’ tech needs requires having dedicated teams focused on stability and agility, says Banco Popular Deputy CIO Jorge Ortiz. “Not having someone jump between one team and another is the way we’ve achieved success,’’ he says.
His colleague Burckhart agrees, noting that the most effective way for IT to meet all business needs is when teams share goals. This way, “you can better balance innovation and operational excellence and ensure teams are not achieving agility at the expense of reliability/stability,” she says.
Josh Reicher, chief digital officer at Cenlar, also believes that separate and distinct teams are necessary to keep the organization safe and efficient, on the one hand, and innovating and modernizing, on the other.
Josh Reicher, chief digital officer, Cenlar
Cenlar
“Operational excellence is part and parcel of IT doing its job,’’ Reicher says. All the infrastructure and tools are “just a baseline of what it means to be a competent IT organization. There are no boxes to be checked. We’re also required to continuously improve and stay on top of tech trends.”
That approach doesn’t work for Elara’s Mate, who says that while years ago he could “probably look at innovation and operations as two separate buckets,” the competitive environment of healthcare no longer allows for that.
“I don’t have the luxury of ‘Here I do operations in my left hand and the innovative stuff in my right hand.’ I have to close the gaps,” he says. One way he is doing that is by using AI to optimize logistics and move caregivers more quickly from patient to patient, increasing the time they can spend with each one.
He also relies on automation to help IT deal with the vast number of incidents they have to respond to every month “in a touchless fashion.”
That’s a core example of how technology is helping solve the operational excellence vs. accelerating growth conundrum. But often, Hyatt’s Hewitt says, IT gets too focused on “tech for its own sake [which] creates so much churn and inefficiency.”
His solution is to “remain grounded in Hyatt’s purpose of … caring for people so they can be their best — as we continue to sharpen our operational excellence through innovative tech enhancements. Staying true to your company’s purpose is the best way to meaningfully and accurately measure the effectiveness of any tech innovation.”
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