The most substantial challenges are demonstrating effective leadership and finding, developing, and retaining IT talent – Results from a recent McKinsey survey on business technology

Some extracts relevant to e-leadership have been extracted from the report and are presented below:

[…] Amid the increasing pressure and dissatisfaction, the enthusiasm to replace management highlights the concerns of some IT organizations that their leaders cannot manage change in rapidly evolving circumstances. Just 55 percent of all executives say their CIOs have a significant impact on their organizations’ business issues, and a nearly equal share says their CIOs are part of the most senior executive team. Across regions, those working in Europe are the least likely to say their CIOs are on the senior team.

What’s more, CIOs spend an average of only 8 percent of their time developing talent, an area where IT organizations have a clear need to improve. Fully two-thirds agree that it’s a significant challenge for their organizations to find, develop, and retain talent, with IT executives even more concerned about this than their business peers. This problem is a long-standing one for many IT organizations. But it is even more critical now as they look to roles that require more business experience and are in higher demand (such as analytics specialists and data scientists). The challenge is exacerbated by the lack of formal processes to govern IT talent and skills management. Just 23 percent of executives report the consistent use of such processes to manage talent, the lowest share across all of the governance processes we asked about.

[…] In the next 12 months, the most acute needs for IT talent are in analytics, joint business and IT expertise, and mobile and online skills, though there is considerable variation across sectors. Financial-services executives, for example, are less focused than others on analytics (only 22 percent cite this, compared with 40 percent of all respondents) but are much more concerned with enterprise architecture than respondents overall. There is also an interesting split between B2B and B2C executives on analytics: 58 percent of those at B2C companies cite analytics talent as a need, while only 40 percent at B2B companies do. This result suggests that B2B companies may not have been focusing as much on their analytics capabilities as their B2C counterparts—and that B2B companies will be feeling this shortage more acutely in the near future as analytics becomes even more critical to business.

[…] Looking ahead:

  • Address talent from the top. As IT continues to evolve as an important strategic tool, the required skills and staff are becoming harder to find and retain, especially in areas such as analytics and next-generation infrastructure. The results suggest that companies could better meet these needs with a more attractive talent value proposition that spans culture and morale, compensation, and career development—issues requiring focused attention from IT leadership. CIOs must be more involved in developing a talent-friendly culture within their organizations to tackle current and future talent issues.
  • Increase business-side involvement. All executives must work to address critical gaps in IT by elevating knowledge in areas that span both the business and IT functions. According to the survey, there are three important areas for improvement: data and analytics, business-IT interactions, and approaches to development work. Given the current state of CIO influence, the task of bridging cross-functional gaps may fall disproportionately on non-IT leaders.
  • Balance competing demands. Steadily rising expectations for IT underscore how fraught the landscape is for CIOs. These leaders must find a way to fulfil roles that may be at odds with each other—managing the IT function while also leading technology-driven changes. To that end, increased use of approaches (such as iterative development processes) that can help CIOs meet both mandates and manage two-speed IT organizations will become ever more important.