The Expanding Power of the CIO’s Corporate Role

Today, most corporate CEOs come up through the ranks from eithersales or operations. Fast forward a few years, though, and IT leadership may be a third route to the helm.

A number of trends in recent years indicate that the role is evolving, Martha Heller, managing director of the IT leadership practice at executive recruiter Z Resource Group, told TechNewsWorld.

Already, some CIOs are assuming the COO role, or moving into other line-of-business management positions.

“I think that if the trend continues the way it is, when you take a survey of CEOs in 10 years, you’ll find that managing the technology function has been another stop on the road to becoming CEO,” Heller said.

Strategic Influence

It’s clear that the CIO’s role has become more strategic over the last decade or so, and that trend doesn’t appear to be diminishing. CIOs have more responsibility than ever for strategy, planning, policy-making and business decisions. In fact, “most CIOs tell me now they probably spend 70 to 80 percent of their time focused on business issues rather than technology,” she noted.

There are a number of reasons. First, technology is becoming more and more intertwined with the business in most corporations — and a key part of competitive advantage. That has been true for a number of years in technology-oriented companies, but now financial services companies, hospitality companies, retail firms and others are following suit.

“Because technology is becoming so pervasive in the way even traditional industries do business, the person responsible for that technology is becoming more of a business person,” Heller explained.

Shifting Responsibility

“What’s interesting too is that for quite a while we’ve been dependent on IT, but now it’s not just more critical — the types of things we do with IT have also taken on a much more central role,” Doug Barker, CEO of Barker and Scott Consulting, told TechNewsWorld.

“IT has moved from simply supporting the business to genuinely enabling it, to an area where it’s such a part of the value proposition that it’s difficult to extricate,” said Barker, who worked for many years as the Nature Conservancy’s CIO. “Today, it’s hard to discuss the strategy without discussing the IT.”

At the same time, because IT is now such an integral part of the business in most companies, many critical standards and processes have been put in place to ensure that it runs smoothly — processes that take at least a little bit of the technological burden off the CIO.

CTOs Wanted

Hand in hand with those new supporting processes goes the necessity of having good IT staff. “Good CIOs now must surround themselves with good technologists so they don’t have to worry about that stuff as much,” Mark Polansky, senior client partner and sector leader of Korn/Ferry’s information technology center of expertise, told TechNewsWorld.

“The CTO or vice president of technical services has to be more self-reliant, more dependable and reliable, and a trusted advisor to the CIO,” he added.

“Many CIOs started as MIS managers,” Z Resource’s Heller pointed out, “and, in some ways, the position got to the C-level before its full enterprise responsibility was fleshed out. But now it’s happening. CIOs have gotten really good at the IT part. Now they’re reaching out to say, ‘I’m an enterprise leader — what can I do for the enterprise beyond managing IT?'”

There’s plenty that CIOs can — and do — contribute. The question is, what does it take?

The Right Skills

The IT experience goes without saying, so next on the list these days is business experience. An MBA is highly desirable, as is some experience with managing profit and loss.

“When I learn a candidate has at some point in their career had leadership responsibility outside of IT, that makes them a much more attractive candidate because it means they’ve been on the side of the business they’re supporting,” Heller said.

Related desirables include experience running IT like a business, working closely with a sales organization, holding a position on an advisory board or board of directors for another company, turnaround experience, and creating something new that has enabled the business to move in a new direction, she added.

It’s All About People

People skills are another big requirement, both for relationship-building with other executives, vendors and suppliers, and for hiring and retaining good IT staff.

“The war for talent is more heated and competitive than ever before,” Korn/Ferry’s Polansky declared, “and for all the offshoring we’re doing, there are simply not a lot of technical people walking around.” Particularly as retirement age looms for the baby-boom generation, the ability to hire, train and keep good people will be more critical than ever.

“If a CIO can’t get the job done because they don’t have the right staff, shame on them,” he said.

Say It Again

Of course, a big part of people skills is communication, and the ability to explain technology to different audiences can be a critical skill for CIOs.

“What’s really interesting is that most successful CIOs are those who can talk about technology innovation and options in terms of their impact on the business,” Barker and Scott’s Barker pointed out. “In different organizations, you really have to be masterful at saying the same thing in different ways, depending on how tech-savvy the audience is.

“It puts the onus and a lot of pressure on a CIO to be that masterful communicator, because the cost of not having it understood — in the form of the potential investment in IT or whatever — means you’re not getting the best expertise or the whole organization thinking through it with you,” he added. “It’s raised the bar even more for the CIO.”

Leadership, Leadership, Leadership

Speaking of raising the bar, the larger, overarching requirement can, as Polansky put it, be summed up in just one word: leadership. “Just as it’s location, location, location in the real estate world, for CIOs, it’s leadership, leadership, leadership,” he said.

What, exactly, does that mean? “It’s vision, it’s passion, it’s inspiration, wisdom, charisma, confidence, prudent risk-taking, creative thinking, out-of-the-box thinking, business thinking,” Polansky explained.

No small order — and today it increasingly must include the ability to lead overseas as well, as countries such as India and China find themselves high on technical skills but short on leadership, he added.

The Agony …

Companies that fail to hire the right CIO can suffer a number of consequences, not the least of which is putting themselves at a competitive disadvantage. While this may be less of a risk in some industries — such as manufacturing, where IT may be more of a support function than a source of innovation — in others, it can be fatal.

Such companies can “miss out on the phenomenal benefits that a sound technology strategy — truly aligned with the business, sometimes even driving the business — could bring,” Heller noted. “The risk is market share, shareholder value, stock price, revenue growth.”

Because of security issues and other IT-related risks that have intensified in recent years, another danger is for companies to place too much importance on IT skills in hiring a CIO, Barker cautioned. “The relative risk of not having a CIO who is a strategic thinker is, for many enterprises, greater than the risk associated with having a CIO who didn’t grow up through the IT ranks,” he pointed out.

The Ecstasy …

But for the companies and CIOs who get it right?

“I think people are starting to look to the CIO for real innovation — not just process change or operational improvement, but new ways of doing things and new business models,” Polansky said.

Particularly given the current renaissance of the Internet and the business potential of Web 2.0, the opportunities are tremendous, he added.

“CIOs need to put in the effort and energy to understand how their companies make money and how their processes work so that they can innovate to improve corporate performance,” he concluded. “There are some very exciting things going on.”

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