CIOs Face A Chip Shortage | NASA’s Digital Launchpad | Closing The Disruption Gender Gap | And More

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Hi there, and welcome to the latest issue of the Forbes CIO newsletter.

A global chip shortage is having a significant impact on the auto industry. GM’s chief financial officer recently warned that issues in the silicon supply chain could cut its 2021 operating profit by between $1.5 billion and $2 billion. Other car makers are feeling the pain too: Toyota has halted some production in China and Fiat Chrysler Automobiles has temporarily paused production at factories in Canada and Mexico.

New cars, which in some cases use more than a hundred microprocessors each, aren’t the only victims of the supply crunch. Samsung and Qualcomm, whose chips power all kinds of mobile electronic devices, are straining to meet resurgent demand. 

The problem stems from actions taken soon after the pandemic erupted. As demand for cars plunged, semiconductor companies cut back production of automotive chips and retooled some production lines to produce chips for personal computers and other gear to support remote work. What they failed to foresee was that demand for vehicles would rebound sharply in the latter part of 2020—and that purchases of PCs and other devices would outpace even the most bullish of early-pandemic projections.

Hence the current shortage, which is likely to linger for some time. Retooling production at existing fabrication facilities, or “fabs,” takes time and building a new fab can require a couple of years or more. The weather isn’t helping: Snow storms in Texas has forced some fabs there to close temporarily so the state can conserve power. The Biden administration has pledged to take bold steps to address the shortage and could increase support for chip manufacturers operating in the U.S. But its moves are unlikely to ease supply chain pain in the short term.

What does this mean for CIOs? Those worried about potential shortages of key hardware will want to stockpile extra gear and to try and tie down alternative sources of supply. Of course, stockpiling by some will only cause headaches for others, but such is the painful reality of the immutable law of supply and demand.  

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Technology & Innovation

Connectivity: Tractor Supply Company, which owns America’s largest chain of agricultural supply stores, has rolled out a new Wi-Fi strategy to improve its ability to deliver mobile services. Better still, it’s helping to bridge the digital divide by extending connectivity to its parking lots, where people with poor or no connectivity at home can use the Wi-Fi for distance learning or telemedicine consultations.

Cybersecurity: News that a hacker had accessed controls at a Florida city’s water treatment plant highlighted the need to review security basics related to critical infrastructure. According to an FBI alert, the facility was running an outdated Windows 7 operating system and staff there were all using the same password to access it remotely.

Leadership & Strategy

Purchasing strategy: When pitching their products and services, IT vendors often conflate the impact these will have on three key dimensions in order to obfuscate the true value that CIOs will receive. Here are several reasons it makes sense to get them to separate out how what’s on offer will affect (a) business value, (b) the efficiency with which IT departments operate and (c) underlying unit costs.

Social responsibility: A new international survey of 1,250 senior executives conducted in December for NAVEX Global, a risk and compliance software and services company, found that although over 80% of respondents said their companies had a formal environmental, social and governance policy in place, most were not confident their employers were making sufficient progress against the standards the policies set. This post has a deeper dive into the survey’s other findings.

Talent & Careers

Diversity and inclusion: Through her research, Forbes CIO Network Contributor Charlene Li found both men and women show the same levels of openness and leadership behaviors, but men rate themselves higher in their ability to think disruptively, while women rate themselves lower. Tech leaders can close this gap by actively encouraging female workers to innovate and to seek more responsibility. They can also serve as mentors and ensure flex time and other HR policies support women looking to advance.

Burnout: Employees’ stress levels are on the rise: Almost 60% of leaders feel used up at the end of the workday, and some 44% who feel this way expect to change companies to find a better balance, according to a new report. Here are some helpful suggestions that CIOs and other executives can use to combat burnout, including being very clear when setting goals and ensuring that employees who feel under pressure get coaching and other forms of support.

"If we get a lending request...and we say yes or no, we need to be able to say why we said yes or why we said no. We cannot say: 'There was this model and it ran and we do not know [why the decision was made].'"

Saul Van Beurden

Head of technology, Wells Fargo

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