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As technology has become a vital component of businesses across all industries, many organizations have added technology professionals to their executive teams. This empowers tech leaders to go the extra mile and contribute to the business’s broader strategy and decision-making. This necessitates familiarity with fundamental business concepts to comprehend all potential ramifications and effectively communicate your views to other leaders and executive members.
Therefore, what do CIOs, CTOs and other tech executives need to know to become full leadership team members? This article outlines some of the concepts you need to master to be an effective IT leader.
Related: The Entrepreneur’s Simple Guide to Business Concepts
1. The business’s key performance indicators (KPIs)
As businesses establish new models based on digital technology, IT departments should monitor two categories of digital business KPIs.
The first set evaluates the existing state of digitalization of the business model, including sales, marketing operations, supply chain, goods and services, and customer service. The second set of KPIs evaluates the development and potential of net-new income streams developed by exploring new digital business models and clearly distinguishes them from non-digital sources.
It is one thing to develop key performance indicators but quite another to discuss them. CIOs must be able to articulate to their C-suite colleagues and boards what these digital KPIs measure and why they are important to the organization.
2. The flow of cash
This is the incoming and outgoing cash flow of a corporation. Cash inflows may originate from sales, equity sales, financing and other sources. The influence of cash flow is substantial, immediate and merciless if mismanaged. The key is understanding how to monitor, safeguard, manage and invest funds. IT leaders and CIOs must understand cash flow, since money is the king of any business. If CIOs understand the significance of cash flow, their IT strategies will be centered on cash flow.
To manage cash flow, it is necessary to renegotiate all IT-related contracts using a win-win strategy. CIOs should initiate an assessment of how they can manage IT expenditures without compromising the quality of IT services and business impacts, and they should discuss with business leaders how expenditures may be controlled, particularly where IT can help them.
3. The company’s corporate culture
The company’s DNA consists of its values, beliefs, and how its employees think and act. This is sometimes difficult to articulate, occasionally deliberate, and always significant on several levels. CIOs must comprehend the corporate culture of any firm, since all IT-related projects and alterations are contingent on the corporate culture.
Related: Company Culture Is Everything
4. Emotional intelligence
Emotional intelligence is the ability to work and interact with others while managing one’s own emotions. It’s typically used to describe a person’s interactions with a team, prospects or clients. People are human beings and must be treated with respect to establish high-performance teams.
CIOs and IT leaders must comprehend this truth while interacting with IT and business staff. They should always have an emotional understanding of the issues and problems individuals face and how IT may assist in resolving them.
What processes and hardware require optimization? Consequently, if IT leaders / CIOs can manage personnel with emotional intelligence, they will gain the confidence and respect of the business, and IT will become a trusted business partner.
5. Individual incentives
To successfully communicate with your leadership team, it is necessary to grasp the incentives. Each team has its incentives, including financial and social capital rewards. To be a great leader, you must put yourself in each employee’s shoes and comprehend their motivations. Customers, prospects and board members are the most important stakeholders for technology leaders. Consequently, they must prioritize incentives that lead to these outcomes.
6. Engaging employees
Creating a solid relationship between the organization and the employees is often an HR objective. A highly engaged employee may be more productive and committed to the organization’s vision and goals.
IT leaders and CIOs must also recognize the necessity of cross-functional teamwork to offer IT services more efficiently. They should always connect with HR teams to ensure that they can execute IT services efficiently, especially when situations like Covid-19 require employees to work from home often. Employee engagement will undoubtedly aid the effectiveness of IT teams.
Related: How to Gauge and Monitor Employee Engagement
7. Building an IT governance model that supports the business
Job number one keeps IT personnel productive, empowered and engaged. Unpreparedness will have repercussions on the entire company. CIOs must form an urgent IT Governance Committee. Governance models are useful for providing supervision during typical business operations. If you have a problem with building a proper IT governance model, you may consider consulting an experienced and reputable nearshore software development company that has operations in the US and other nearby countries.
You should support your staff, ensure their safety, and develop a contingency plan for important responsibilities. Once the initial crisis management and communication stage has passed, you need to establish defined roles and responsibilities within IT to facilitate the organization’s ability to respond quickly.
For technology and execution leaders to be effective in their professions, they must understand fundamental business ideas. Always endeavor to determine which business principles they can comprehend and how to collaborate effectively with company leaders. If key leaders understand the company, they may successfully help the business by comprehending business difficulties and concerns in accordance with the corporate vision and goal.
IT leaders will be able to create a long-lasting IT organizational model that aligns with business plans if they have a solid grasp of business ideas, especially in this age of digital transformation.