In their working paper, Nina Jörden, Wolé Adaramoye and Gerard Kuenning explore the productivity paradox, to show how organisations struggle to translate rising ICT investments into meaningful gains. By examining the organisational realities faced by Chief Information Officers, they highlight the critical need for strategic alignment, effective collaboration, and managing cultural expectations, to achieve sustainable productivity gains.
Abstract
The productivity paradox, characterised by the disconnect between rising ICT investments and stagnant productivity gains, remains a significant challenge for organisations. This working paper shifts the debate from theoretical discussions to the organisational realities faced by Chief Information Officers (CIOs), focusing on their role in balancing efficiency, productivity, and compliance, addressing C-suite misalignment, and navigating technological determinism. Through in-depth interviews with CIOs, we found that productivity is often conflated with efficiency, resulting in a focus on short-term gains rather than long-term innovation and value creation. Misalignment within the C-suite, particularly with the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), further complicates efforts to leverage ICT effectively. Limited technical understanding among executives can hinder strategic alignment, and budget control mechanisms can restrict cross-functional ICT initiatives. However, effective collaboration between CIOs and CFOs—centred on joint planning and aligning financial and technological objectives—can significantly enhance productivity and resource allocation.
Additionally, CIOs stress that successful ICT implementation requires robust change management, employee engagement, and continuous improvement, yet these aspects are often underfunded or overlooked. To fully harness the potential of ICT investments, CIOs must navigate the complexities of aligning technology with business strategy, ensuring compliance, fostering cross-functional collaboration, and managing cultural expectations. Balancing efficiency and productivity, fostering an entrepreneurial mindset, and breaking down organisational silos are essential for achieving sustainable productivity gains.
The paper concludes with a comprehensive set of practical recommendations aimed at business leaders and organisations to enhance productivity through strategic leadership and effective technology investments.
Keywords
Productivity Paradox; Chief Information Officer (CIO); Technology Investment; Organisational Efficiency; Change Management
Acknowledgement
The project, funded by the Business Innovation Grant for “Strategic Productivity for Business Functions and Leadership Teams 2023,” was carried out with support from The Productivity Institute, funded by the Economic and Social Research Council [grant number: ES/V002740/1
