Despite the crucial role that technology played in helping companies survive the pandemic, CIO representation on top management teams declined by 10% last year, according to the Harvey Nash / KMPG CIO Survey 2020.
This is likely due to the increased distribution of technology decision-making. Growing ownership of technologies by the chief marketing officer, chief operating officer or even the CEO has combined with outsourcing to produce decentralised technology management.
But concerns about the demise of the CIO are nothing new. Since the late 1980s, researchers have mapped tidal changes in the importance of the CIO, as the role has morphed and changed on a year-by-year basis. So we should not be too surprised to learn that CIOs endure relatively short tenures and consistently high turnover rates.
Despite the apparent surge in new, highly influential roles in delivering digital transformation, CIOs still appear to struggle with long-term commitment. While researchers debate the exact causes of high CIO turnover, there is agreement that CIOs tend to have the shortest tenures: an average of 4.4 years, compared with a board average of 5.3 years – according to a 2017 study by Korn Ferry.
The consistency of this trend suggests the CIO turnover is due to more than the constant advance of technology. There are, in fact, at least four fundamental issues that contribute to CIO turnover, which, if left unaddressed, will continue to plague the IT leadership profession.
Drivers of CIO turnover
Just as no two companies are ever the same, no two CIO roles are perceived to be the same. As technology is now woven through every aspect of a modern organisation, the complexity underpinning the IT landscape verges on the indescribable. Making sense of how to understand and then exploit IT in such an environment is a near-Herculean task.
This means that every IT instance is largely unique, and that CIOs rarely face exactly the same challenge twice. Each newly appointed CIO is going to have to learn on the job, to mould themselves to their new and unique environment. And they are going to have to do that quickly time and time again throughout their careers. The CIO’s role is, therefore, highly contingent on the precise circumstances of the organisation.
As part of the constant reinvention of their role, CIOs navigate diverging expectations from top management. These expectations will reflect how top management view the role and purpose of the IT department. This can range from perceiving IT as a cost centre to viewing it as a value-adding enabler of strategic aims. This range of expectation creates very different demands on the CIO. If the top management team has conflicting expectations, then CIO performance will be constantly questioned.
CIOs, like many members of the senior management, are incentivised through performance-related rewards. For CIOs, this can be a mix of tangible achievements, such as the successful delivery of a new system, and company-level measures, such as increased margins.
However, these schemes can often demotivate IT leaders. Company-level performance is contingent on multiple organisational and environmental factors, and can rarely be attributed to any one individual. Shortfalls in expected reward, explained away by poor company-level performance, can result in demotivation, disengagement and eventual departure.
CIOs have always had to deal with technological change. But, it has been argued – by Gartner, among others – that the current wave of digital technologies has an unprecedented impact on organisations and their technology leaders.
Pervasive, affordable digital technologies continue to disrupt all aspects of the business, demanding and enabling constant change. CIOs, and their bosses, are discovering that the continuously accelerating process of digitally enabled change requires them to constantly reinvent themselves if they wish to remain relevant and effective.
So what can be done to address these issues? Part of the responsibility lies with CEOs. The more forward-thinking among them will start to consider new approaches to CIO development. For this to be effective, though, they will also consider how the top management team can remain abreast of rapidly changing technologies and ensure their expectations remain aligned.
CIOs, meanwhile, must find new personal development frameworks that help them to evolve. Current approaches, which typically gauge their attainment of a static list of competencies, have not served CIOs or their employers well.