Global CIO: JetBlue Genius And Hollywood Lunacy: 5 Essential Lessons For CIOsGlobal CIO: JetBlue Genius And Hollywood Lunacy: 5 Essential Lessons For CIOs

From the Wall Street Journal: Fox had requested that Redbox keep its movies out of rental kiosks for 30 days, according to a person familiar with the situation. It also offered to continue to make its DVDs available on the official release date if Redbox agreed to better economic terms, such as sharing rental revenue, the person said. Redbox declined the offers. Now, Fox is instructing its distributors to make its movies available to Redbox only after 30 days. Fox said it favored the 30-day delay for vending machines in order to protect the "enormous money, creativity, and effort" it invests in its movies, the company said in a statement.

From another Wall Street Journal piece: "Redbox will continue to stand behind our customers and our commitment to providing convenient, affordable access to new release DVDs from all studios including Warner Brothers," said Redbox President Mitch Lowe. Redbox can work around the studio's restrictions by stocking its kiosks with DVDs purchased at retailers such as Wal-Mart, as it has done for months with other titles from studios that have tried to stymie its business, say people familiar with the situation.

So these two examples---one customer-centric, the other seller-centric---provide five great lessons for CIOs to think about extensively as CEOs begin to expect their IT chiefs to be business drivers as well as great technology leaders:

1) CIOs have to drive growth within their companies, and not just in some vague, unquantifiable way. Technology is disrupting sales channels by giving customers more and better information, more choices, and more ability to become involved in your company's operations as a very tightly coupled partner. As CIO, what steps are you taking to accelerate that evolution with new processes and business models that enhance value for both parties?

2) The customer is king. Some companies say this but don't practice it. When the Time Warner CEO says that just as there's a place for $1 movie theaters (out on the fringes), so too is there a place for $1 kiosks, he's saying he doesn't give a damn about the millions of customers who in a stunningly short time have turned Redbox into a company with a $1 billion run rate. And he's also saying that while he's not willing to clean up his own massively bloated internal cost structure, he's all too willing to expect consumers to continue subsidizing it. JetBlue, on the other hand, says customers deserve more freedom and more choice and has upended, at least temporarily, a traditional airline pricing structure that was about as difficult to crack as the Pittsburgh Steeler defense. How can you as CIO help create alternative customer-centric approaches that push your company's revenue up on terms that customers find appealing and engaging?

3) More and more customers, whether business or individuals, want relationships of trust and engagement with the companies to which they pay hard-earned money. As noted above, JetBlue's Twitter feed played an enormous role in spreading word of the unprecedented offer and ensuring the program would achieve all of its goals (see Global CIO column "Why CIOs Need The Transformative Power of Twitter" here). As CIO, are you leading such efforts to build relationships with customers; are you ignoring those opportunities; or are your stifling these social-media approaches a la the blockhead CIO featured in this week's Global CIO guest column by Howard Anderson?

4) JetBlue's new monthly special makes its passengers feel involved with the company's business and something of a partner in this new undertaking---there's a connection there that most businesses would love to have but can't figure out. On the opposite side, the Hollywood studios are attempting to say that they will be the ones that set the rules, they will be the ones that decide what their customers can and can't do, and they will be the ones that quash any attempt at innovation that benefits customers without also benefitting their tired, antiquated, and inefficient business models. As CIO, are you and your team playing the role of co-creator or of isolator?

5) Even if you're constitutionally committed to fostering new types of business models and new interconnections with customers, that's only part of the battle. Do your IT systems have the flexibility to handle a wildly different revenue, scheduling, and capacity-planning approach such as JetBlue's $599 monthly smorgasbord will generate? Do you have integrated databases that can recognize customers coming into contact with your company in untraditional ways and places? Are you in control of your company's 80/20 battle, or is it in control of you? While it's a huge plus to want to be a co-creator, that's not enough---so if you've been delaying that IT transformation project until just the right spark came along, you couldn't ask for a better opportunity than this.

Don't mimic Hollywood and just delay the inevitable. Push freedom---for your customers and for your company.