Over the few years a new breed of CIO will move into key corporate positions with a greater chance of taking on CEO roles, according to a new report. Sense and Sensitivities: IT Leadership in Practice, published by Spencer Stuart and CIO Connect in association with Hewlett Packard (2003), follows a spate of doom and gloom studies predicting the demise of the CIO role and reveals the strategies, attributes and attitudes needed to make it to the top. Currently no CEO of a top European company has an IT background, but this might change over the next decade.
When you see the bones under the skin
Corporate mergers are generally triggered by a strategic decision. The process usually starts by a thorough assessment of both organizations and their balance sheets. Yet, the merger itself cannot properly materialize until a new IT infrastructure is in place, no matter how well defined the new organization may be. This reinforces the increasingly pervasive influence of IT on operations, in all sectors, not just financial services. Indecision resulting from mid-term compromise has a tremendous impact on the business. In many respects the IT backbone shapes the organization. When bankers talk about open architecture for their products, they employ an expression that has been used in the IT field for years.
A CIO should have CEO potential
IT is an investment and, as such, should produce a return. Remember the days back in the 80s when companies (in Switzerland) were paying their hardware in cash and amortizing it over five years? If progress has been made on this front, we haven't reached the destination yet. Sooner or later chief information officers will be viewed as a chief investment officers.
This is illustrated in our report: top CIOs have identified integration as the key to bridging the persistent divide between IT and the business, instead of focusing on the once holy grail of IT-business alignment. The new breed of CIOs are identified as turnaround champions and business innovators, skills which require the ability to see beyond aligning IT with the business — the oldest preoccupation of senior IT managers since the 80s. Today, integration means thinking beyond support and services and implies a radical change in attitude and behaviours.
How the report identifies IT leadership in practice
1) Elevating the argument from technology
The “I” in CIO stands for information and not technology. Where the CEO is enlightened about the possibilities that technology offers — and the CIO is able to contribute at the top level —, bridging, even obliterating, the traditional divide between business and IT becomes a real possibility.
2) Steering and managing business (not IT) projects
In companies where IT is seen as a strategic, competitive tool, IT projects as standalone activities cease to exist and the main thrust becomes one of moving the company forward through a series of business projects.
3) Overcoming senior managers' skepticism of technology
The key is to capture their imagination first, by focusing on issues that are closer to their heart than IT. The main business motivators that command the attention of CEOs are much more related to innovation and unique products or services than technology.
4) Adopting the right communication style
What's important is to recognize both your own style and that of others, to ensure that the dialogue is effective and takes things forward.
5) Living up to the hierarchy of management expectations
CIOs who achieve a higher profile for IT within the business tend to be those who recognize that the business has a hierarchy of needs, each level of which needs to be satisfied before the business is ready to move up to the next level. In other words, CIOs should base priorities on the demands of the business, not the needs of the IT function.
6) Running the shop reliably
The basic credibility of any CIO lies with managing the IT systems of the company reliably. It is far from ideal to say that the future success of the business depends on IT in order to raise the profile of IT, only to then witness a succession of disruptive or even catastrophic system failures.
7) Understanding the power map of the organization
Too often CIOs see their responsibility as being primarily upwards, towards top management, and downwards, to their staff. The sideways relationship with other business managers is often perceived to be neglected.
8) Leading business process and product innovation
A good track record and constructive relationships with all parts of the business opens up huge new opportunities for CIOs. In fact, once the business recognizes the opportunities that exist through IT and respects the IT department, the floodgates may start to open.
Business (IT) governance
CIOs today are focused on driving competitive advantage, reducing costs and managing/reducing risk. As Francis Wilkin, who leads Spencer Stuart's CIO Practice in Europe, puts it: “A good CIO doesn't just understand IT, but understands how to knit the technology into the fabric of the organization. You need somebody who can think strategically, who has vision and who understands the length and breadth of the business, so they can spot where IT can be applied to achieve a business advantage.”
In this new role the CIO helps create business value. As a business leader, he or she has a joint responsibility and a multifunctional perspective — key credentials for becoming a future CEO.