“Nobody ever got fired for buying IBM” is an unattributed quote that’s been repeated so often in tech circles that it’s buried into the mindset of a lot of longtime IBM® users.
And that’s a problem for progress.
The quote expresses that the safe choice for a CIO is to stick with megabrands like IBM, Microsoft, Cisco. It’s a scare tactic that says, play it safe, keep your head down, be agreeable.
It’s a status quo mindset – the biggest enemy of pure innovation.
Innovation is naturally about thinking outside the box. It’s about extending resources, doing more for less, and going beyond what’s previously been thinkable.
So how can IT leaders embrace digital transformation with a party line like, “play it safe, do what’s always been done”?
They can’t. Companies that don’t embrace innovation simply can’t adopt flexible strategies that help them modernize. They get stuck with more expensive, less functional technology.
And that’s just not good for business. And no business means no job. So, playing it safe just leads to a different kind of getting fired.
We like this article’s take on the quote, so we’re reprinting it in full below. Read it to see which side of innovation you’re on.
Legacy may be a dinosaur, but your strategy for moving forward doesn’t have to be.
Is IBM still the safest career decision for a CIO?
The expression “nobody ever got fired for buying IBM” has been around since the 70s. This was never an official strap line of IBM. However the unattributable nature of the expression amplified its power, and in so doing has become ingrained within the psyche of many CIOs for the past 40 years.
Of course it really means nobody ever got fired for buying the Incumbent MegaBrand. Please feel free to replace IBM with the “safe” brand of your choice – Microsoft, Cisco, Oracle, Vodafone etc etc etc.
In the 80s this mantra was expertly exploited by the sales ethos known as FUD. Fear, Uncertainty and Doubt has been the most lethal tool in the MegaBrand’s sales and marketing arsenal, and it is still very much part of the armory today.
So why have the Incumbent Megabrands been so successful? Why have organizations consistently bought the more expensive, less functional technology?
The biggest goal of a CIO in a large organization is “Do Not Fail”, or if they do, make sure it wasn’t their fault. Buying the safe Incumbent MegaBrand has perfectly supported this goal until now.
The Incumbent MegaBrand probably broadly met the functional requirements, and if it didn’t it wasn’t the CIO’s fault. Typically it was usually the technology bought by their organization’s competitors, and as a result delivered the same benefits and issues to the competitors. This made competitive technology differentiation impossible.
The job-defending “safe” strategy of buying the Incumbent Megabrand is no longer a career-preserving option. The world is changing, and the evidence is everywhere. CIOs now need to be the champions of innovation.
One of the greatest challenges (and opportunities) is disintermediation, defined as the reduction in the use of intermediaries between producers and consumers.
Established market-leading businesses are being disintermediated by disruptive new entrants to their market, and if you look inside these established market leaders their IT departments are being disintermediated by their own staff.
I believe there is a direct correlation between these two dynamics. If an organization can’t innovate internally how can they ever innovate externally?
If they can’t engage with their internal customers how are they ever going to keep their external ones?
I met a trusted adviser to the CIO of a global Tier 1 bank. I asked him what was the greatest technology challenge facing his organization, he thought for a short while and responded – consumerization
He went on to say his problem is the pace of change – that his bank had a six-year plan for upgrading the desktop and a four-year plan for a new multiplatform video conferencing environment – the problem was that both of these initiatives would be outdated long before they were ever completed.
His point was that the consumerization of technology is an unstoppable tsunami. Consumer technology is innovating at the speed of thought. Applications such as Skype, Huddle, Yammer, Facebook, WhatsApp, Slack and Google are investing phenomenal amounts in R&D and as a result are creating very compelling ubiquitous products.
IT departments are being disintermediated by their internal customers – who were simply responding to their customers’ demands. In fact, they were just being human. These organizations’ external customers are also just being human.
The alternative finance industry is mounting a massive challenge to the “bricks and mortar” retail banking industry. Now it’s still very early days. But how can these massive banks with their Incumbent MegaBrand systems and platforms ever compete?
The short answer is they can’t, it’s just a matter of time. There will be a tipping point and if the massive banks don’t respond ahead of this, they will fail.
Daily news is another interesting example. Does the daily paper-based distribution of news that has been collected, aggregated and disseminated by huge bricks and mortar media organizations really have a future? It’s very unlikely.
My final, and potentially most profound, example is the advent of the digital watch. The digital watch destroyed the Swiss watch industry. Switzerland’s market-leading position was reduced by 85% and 62,000 watchmakers lost their jobs.
The incredible irony is that the Swiss invented the digital watch. They didn’t patent or develop it because it didn’t use traditional technology – it wasn’t a watch.
There are many historic and contemporary examples of rapid disintermediation through disruptive innovation. These are occurring in just about every industry we care to look at today.
So the message to CIOs in large and many medium-sized organizations is Innovate or Die. Your companies are being disintermediated by smaller, more agile disruptive competitors. Your IT departments are being disintermediated by your internal customers.
Is buying the Incumbent MegaBrand still the safe career decision? Can your organization both strategically and financially afford not to innovate? Look at what your employees are using, look at how your smaller, agile disruptive competitors are innovating and consider your options.
In the end it is about managing risk. Can you as CIO prove to yourself and your board that the utility and benefit of innovation far outweighs the potential risk of working with an emerging technology or organization? And then ask yourself: can you afford not to?
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