A recent Gartner study predicts that by 2015, 25% of large global organizations will appoint a Chief Digital Officer (CDO). In a time where there is a lot of technology analyst talk about the relevance of the CIO and Enterprise IT, Mike Kail, CIO of Netflix offers a refreshing perspective. In his opinion, there has never been a better time for IT to fix its reputation in the industry, and move from being the blockers in an organization to being the enablers. IT has an opportunity to show that they can deploy great technology that is accessible anywhere leveraging cloud computing, SaaS and mobility, and providing analytics to the teams that need it.
Mike Kail, CIO Netflix
Netflix is an amazing company that is growing rapidly with 1 in 4 Americans subscribing and 33% of all home broadband internet traffic in the U.S. generated by Netflix video. But Kail, who embodies pragmatic optimism and a can-do attitude, does not view this rapid growth as a strain but as an opportunity. To deal with the challenges of the transformation IT, Kail advices CIOs to not be driven by fear but rather to embrace this opportunity to create a new reputation for IT.
8 Ways for IT to Fix Its Reputation:
1. Focus on cloud wherever possible - Kail feels that IT should be focused on the goals of the core business and at Netflix that means providing entertainment, not procuring hardware and network infrastructure and storage systems when these services are readily available and more agile delivered through SaaS or public cloud. IT needs to look at things differently and ask how they can leverage other resources to bring a different perspective to their organizations. Kail focuses on cloud wherever possible using either best-of-breed SaaS apps or doing their own custom app development and deploying on public cloud. His goal for 2014 is to have 100% of corporate IT in the public cloud.
2. Hire talented people that think differently - At a company where there is a 126-page culture deck - hailed as Silicon Valley's most important document ever - there is an equal (if not greater) value placed on the cultural fit vs. the technical fit when it comes to recruiting new talent. In the hiring process, Netflix sets the context of culture early on and the deck contains the guiding principles for how all employees should operate every day. The two traits that Kail wants his employees to have are intellectual curiosity and continuous involvement. "While cloud computing is not a huge shift in thinking, you need to having people that want to think differently about infrastructure and architecture to figure out how to secure something or handle resiliency and latency when you don't have full control over something," says Kail.
Netflix is a very dynamic organization where people are not just doing one thing all day. This gives employees the opportunity to continuously expand their skill sets and look at different and new technologies, something Kail calls "Enterprise IT 3.0". Because Kail has tried to organize his team to contain no silos, employees can work cross-functionally so they are continuously evolving their skills. This means that as they move to being 100% cloud-based the make-up of the IT team will not change.
3. IT's charter is to improve business efficiency - When moving to cloud or any new technology, setting context for everyone about why you are doing it is the key to success says Kail. Do this early on and have a good clear plan that stems from looking at how to improve business efficiency in conjunction with moving to cloud. The last thing you want to do is to forklift existing apps and put in cloud just to do it. IT needs to look at all the business processes and take a fresh look at different areas, such as the financial system, that people don't always think about. Things have changed and old systems may not be as efficient as they used to be. According to Kail: "IT's charter should be to improve business efficiency and move the business forward rather than being trying to 'protect employees' or prohibit them from doing something."
4. Support "UAD" (Use Any Device) - Kail says that instead of the acronym "BYOD", we should be using "UAD" (Use Any Device). People expect the same experience wherever they are and for IT to support a bunch of different apps to help them get their job done. Everything is mobile these days, in fact Kail doesn't have an office at Netflix but instead operates wherever he is via various mobile devices. "People should be able to use best device to get the job done, and IT should support it in a secure manner with great access to apps and data," says Kail.
5. Try to remove friction wherever possible - Removing friction is a great opportunity for IT. At Netflix, IT created one login for all SaaS apps to tie everything together in one place. This eliminates the need for employees to have a different password for every app they use and allows them to experience the same secure log-in from any device. In this way IT has served the business by ensuring an optimal user experience from anywhere so that all the business-critical apps are with them everywhere.
Of course IT is challenged to balance providing a really flexible environment with being secure and knowing what's going on. Kail said security is always something that is there in the back of his mind - it's an integral part of everything they do.
6. Communicate deep context for change - When thinking about how to introduce change and innovation, you have to understand the variable switching costs in technology and then address them head-on with the employee base. Netflix switched from Exchange on-premise to Google Apps last year and in doing so, Kail wrote a long Google doc memo which explained why they were deploying the new technology.
"When you deploy new technology, you need to communicate to end users otherwise they get frustrated," says Kail, who thinks poor communication and lack of explanation and support for new technology are the root causes of shadow IT. IT needs to understand the needs of the business in near future or employees will go find their own apps that they understand and that helps them get their job done.
7. Embrace "shadow IT" - According to CIO Insight shadow IT's footprint is growing rampantly and recommends "don't block popular SaaS apps that help employees get their jobs done". Kail, who is of the mindset of Kim Stevenson and Kristin Russell when it comes to shadow IT, couldn't agree more. He feels that people should use the apps they need to get their job done and if there is a big need for certain apps then IT should provide access, not block it. He sees shadow IT as an opportunity for IT understand what the user needs are and how they can improve the service they deliver and support them better.
8. Partner with line-of-business - With a lot of talk about technology thought leadership shifting away from IT and moving into the hands of the CMO or CDO, CIOs should try to put themselves out of their comfort zone and learn something new and see how they can help out. Kail says there are a lot of opportunities for CIOs to try to understand the vast marketing landscape and figure out how to partner with the CMO and provide solutions to them, but it will involve getting comfortable with being uncomfortable.
Kail's parting advice for CIOs who want to fix the reputation of IT: "Do what you think is right and take ownership for it. Execute and if something is not working don't try to force it, but rapidly change the course. Be self-aware and business-aware."
You can watch the full interview with Mike Kail here. Please join me and Michael Krigsman every Friday at 3PM as we host CXOTalk - connecting with thought leaders and innovative executives who are pushing the boundaries within their companies and their fields.