The World Economic Forum (WEF) met last week in Davos, Switzerland for its annual conference. Here’s my take on the outcomes from WEF and impact for the CIO.
For those not familiar with the WEF, it is an annual gathering of business leaders, government officials, and prominent individuals discussing the most important topics facing our world and how we might tackle them.
While the topics may seem a bit removed from the interest of a CIO there are corollaries that CIOs need to be aware of.
Main discussion themes
- Natural resources. Water is a key concern, but not the only natural resource of concern. For CIOs, data centers are a significant consumer of water and therefore data center efficiency is key. This could also impact where people reside. Sourcing precious metals and rare earth elements also play a role. Computer equipment and chips require access to rare earth elements that are widely sourced from countries like Ukraine and Russia. Impacts to this sourcing can limit production and drive costs higher.
- Energy. The world is rethinking how energy is sourced, produced, and consumed. For CIOs, sustainability is incredibly important for data centers and computing equipment. However, it is also important to understand consumption beyond the data center. The ‘E’ in ESG (environmental, social and governance) policies around Scope 1, 2 and 3 reporting are just one example. In addition, access to energy will impact production, transport, and overall supply chains.
- Innovation. Investment is key for innovation to succeed. For example, innovation in artificial intelligence (AI) and data will drive insights not currently available. For CIOs, the key is to determine where, how, and why to leverage innovation. How will it impact your strategy. Remember that not all innovation is beneficial and applied evenly.
- Social inequalities. We have seen equalities go up in some areas while fall in others. Overall, we need to consider how best to engage and lead people for our societies, communities, and companies. Leadership is key here and the traditional means to do so will not serve us well into the future.
- Geopolitical risks. This topic has been brewing for some time and reached a feverish point during the pandemic. Two good and recent examples are the pandemic impact in China and Ukraine conflict with Russia. In both cases, it is causing companies and CIOs to rethink their strategies across the board. Supply chains, production capability and people are all impacted from geopolitical risks. Resilience is key moving forward as more of these risks are likely to arise. However, there are tradeoffs that must be considered.
- Cybersecurity. Cyber is a perennial topic that needs an overhaul. The risk to companies, governments, economies could create economic turmoil or undue geopolitical risks. With the advent of more sophisticated AI and generative AI solutions coming onto the market, the stakes are even higher. CIOs need to ensure they are up to speed and considering how they are both protecting and preparing their organization.
- Data. Data is the lifeblood of decision making. Yet we are faced with an increasing concern around trust in data due to misinformation that takes a life of its own. Eventually, the misinformation becomes the truth of data which creates its own issues. New innovations around generative AI pose both a blessing and a curse in that it leverages intelligence around data but also creates a reciprocal data source for misinformation. This only leads to the need for guardrails to maintain trust in data.
- Fragmentation versus globalization. The world has moved away from globalization to a more fragmented model. While both extremes are not ideal, the globe needs to find ways to mend the amount of fragmentation in place today while not creating more fragmentation. For CIOs, this means navigating a challenging strategy that is intertwined with many of the items listed above. On a more micro level, it means CIOs need to rethink their leadership and how they guide their organization through these uncertain times.
Next steps for the WEF and CIOs
The WEF has taken a lot of heat over the past few years for several things. From being out of touch by talking about sustainability while using an inordinate number of private jets to attend the WEF to not focusing on real solutions that will make a difference, the WEF is at a crossroads.
It is unclear who or how a body will step in to correct these issues, but a governing collaborative body is needed. Is that the next generation of the WEF? I’m not so sure.
What is clear is that enterprises have real issues they need to address today. These issues impact their customers, employees, partners, ecosystem, and resilience in the future. For the CIO, the stakes could not be higher. The CIOs role in each of these aspects is more critical than ever.
Put in a very succinct way: IT strategies of the past need not apply. A wholly different approach and leadership approach is needed to carry the organization into the future. CIOs need to think broader than ever before. The remit for the CIO continues to grow and that means that their staff need to grow accordingly.
For CIOs this means going back to the drawing board to rethink their strategy in light of the current global dynamics and building flexibility and resilience into their strategic planning.