Published on November 23rd, 2013 | by Deeson Arnibal


The Effects Of A CEO’s Being Technologically Illiterate

The old adage of “with age comes wisdom” must resonate through the halls of the majority of the S&P 500 companies, which maintains an average CEO age of 55. While these executives bring a wealth of knowledge experiences, many also support the adage “you can’t teach old dog new tricks.” With the swiftly sweeping technological changes that have taken place over the last decade, several CEOs have been left trying to understand how and why they should look to the cloud for solutions.

The importance of the CEO being technologically literate is highlighted by the fact that most businesses operate some form of an information technology (IT) business. Whether the business is in retail, manufacturing, or finance, information technology will underpin the processes and systems of the organization. More importantly, the effective use of IT can offer the business an astounding competitive advantage. Since IT pays and manages personnel, controls suppliers and their costs, analyzes customers, manages prospects, monitors and measures sales, and practically everything else, the need for CEO’s to be technologically literate couldn’t be clearer.  Simply put, CEO’s must be able to understand technology at a high level to effectively run the organization. This understanding is detrimental for the CEO to effectively perform the several roles the job.

Security Risk

Although most of the larger organizations have a dedicated information security department, the most effective information security plans are implemented on an organizational level. This means that everyone from top to bottom understands and implements every protocol of the security plan, as dictated by the person with the engineering management master degree or next as qualified employee. If the CEO is technologically illiterate, he or she may be setting a poor example for everyone else in the organization. As a result, no one will effectively take the protection of the organization’s information seriously because of the poor example set by the business’ leader. This could lead to security breaches, data theft, and many other types of publicly embarrassing and costly incidents.

Loss of Employees

According to an article in the Sarasota Herald-Tribune, when 57-year old Paul Hough became CEO of Univar Corp., his executive assistant, Gail Eng, stressed the importance of him learning to operate his office computer. However, the new CEO quickly became overwhelmed with the new responsibilities and failed to master his computer. Hough explained to other executives that he preferred using paper memos or voice conversations because he didn’t use E-mail. After too many instances of having to turn on her boss’ computer, Gail Eng left the company. When a CEO is technologically illiterate, those tasks are passed down to someone else. In many cases, the additional responsibility can prove to be too much.

Missed Opportunities

Technology is all about finding new ways to do the same processes at a more efficient pace. This means that newer technology will usually offer a cheaper way to more of the same process. CEOs who fail to embrace technology may prevent the organization from realizing significant cost savings by failing to implement new technologies. For example, if a CEO was completely oblivious about cloud services, he or she may be compelled to simply disregard the notion. As a result, the business would miss the opportunity to cut significant costs, increase security, and create a competitive advantage.

Decreased Work Performance

Technology offers everyone the ability to perform their duties at a much more efficient pace. Being able to effectively utilize and embrace technology means that you will be able to get more work completed in a much more timely and organized manner. CEO’s who fail to have an understanding of the organization’s technology will be stuck performing tasks at a much slower rate using the older procedures. On a larger scale, CEOs who fail to understand more complex technological issues may be left out of important conversations, which can interfere with their ability to perform their job.

Ineffective Management Means New Management 

With the implications of technology and its widespread use, it’s hard to imagine how a CEO could effectively manage an organization being technologically illiterate. Clearly, the overall effect of a technologically illiterate CEO is a soon-to-be-announced replacement CEO with more technologically savvy.

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