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November 30, 2009

In two minds

Today’s CIOs need to be both cautious pragmatists and innovative risk takers. Janine Milne examines the mix of sometimes contradictory skills needed to be a successful CIO.

By Vinod

The role of the CIO is changing. But then, if it didn’t change, it would be an extremely unhealthy, not to mention dull, profession to be involved in. The question is: which direction is it moving in? Are CIOs becoming more strategic and taking on new responsibilities in the business, or is IT, as some pundits would have us believe, becoming a keep-the-lights-on utility?

John Mahoney, Gartner vice president and distinguished analyst, is very much in the former camp. He draws a parallel between the evolution of the CIO and that of engineers from the early 1800s through to the beginning of the 20th century.
“People like Brunel and Stephenson saw themselves much more broadly than engineers who built bridges and trains, but as people creating transportation systems and social environments. So they may have started as railway engineers, but they moved onto something much more strategic and emphatic. The role of the CIO is moving from creating technology to creating business,” says Mahoney.

The pervasiveness of technology in modern organisations and the greater understanding of its competitive and productive power should ensure that the CIO wields far more strategic sway in the boardroom. Most businesses simply cannot work without IT. But the pervasiveness of technology is in some cases creating a polarisation in the CIO role.

On one side, CIOs are focused on the provision of IT; on the other side, they are involved with innovation and transformational change. “As the role evolves, we will see clear water between the innovation and service side,” says David Henderson, a partner in IBM Global Business Services consulting practice and author of a recent report “The evolving role of the CIO”.

This clear water will develop between the classic IT director whose focus is on the provision of IT and services for the business and the CIO who is business driven and focused. So in one camp, IT is an internal supplier of technology to the business. The business makes a request, and IT fulfils that request. In the other camp, the CIO’s role is demand driven. He or she is very much part of the business with a business understanding of how to apply technology to improving the business. You can only become a demand-level CIO by getting the supply side right first and earning trust from the rest of the business. Many heads of IT are stuck very much in the former camp.

“I think from what I’ve seen there are two types of organisation: one is mature enough to know it needs to embrace IT as true business partner, the other type is where IT is unfortunately a bit of a whipping boy,” says Tukun Chatterjee, Changepoint solution director, Compuware.

Supply and demand

In larger companies, where there are the dual roles, the logical conclusion is to separate the two jobs altogether. While he agrees that this idea of supply and demand is a powerful metaphor, Mahoney is worried that its “elegant simplicity” should not be taken too far. It should be less about simple delivery and more about partnership.

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“The supply side is legitimate and a necessary influence and needs to be factored into design. Different studies in some organisations who have taken the metaphor too far show the supply side gets put into a box and told precisely what to do and will do precisely that. The problem then is that IT brings no strategic benefit,” believes Mahoney. Companies such as Unilever do have this kind of supply and demand aspect to the IT function, but Mahoney says that the two are not isolated silos, and there is a lot of interplay between them.

If the CIO role is split between strategy on one side and provision of IT on the other, does that necessarily mean that CIOs need the same technical grounding they used to have? After all, there are examples of individuals who are not technicians who have segued from other parts of the business to take on the CIO role.

The consensus seems to be that no matter how much business acumen a CIO has, he or she must have the basic grounding in technology. “The CIO must be strategic long-term because no one else can do that. In some circumstances, they probably need to be deeply engaged in technology, but that’s less and less true. We did some research mid this year looking at the gap between CEO and CIO expectations. CEOs were emphatic that they would never hire legal council if they weren’t lawyers or finance directors if they weren’t accountants, so why would I hire a CIO without a deep background in technology? It’s absolutely crucial for the CIO role. If you look at the whole collection of business assets, there are three that are particularly transformational to the business: processes, information and relationship and you can cannot develop any of the three without technology,” says Mahoney.

Tim Cook, executive director at recruitment firm Russell Reynolds, took a close look at the 20 senior IT positions he has placed over the last year at major companies such as BUPA, the NHS and the BBC, to find out whether there was still an emphasis on technology. First of all he looked at their educational background: 75% had degrees, 10 of those were in science subjects, two in maths and three in the Arts. Of those, 45% also had Masters degrees. Clearly, a maths/science background is still important, though not essential. But what did appear to be essential was gaining a particular brand of technical experience early along the road to becoming a CIO. Three areas stuck out: 60% had early experience in systems analysis, 40% in programming and 30% in consulting.

“I found that quite interesting, because they were working for diverse organisations and the individuals were British, European and American. Systems analysis and programming are good as early formative skills. To be successful in systems analysis and consulting you have to be able to engage with the business. With programming you have to be able to deal with ambiguity and so you’ve got to interpret things and the ability to interpret is similar to getting under the skin of problems. Typically, after that, they go into project leadership roles and learn the key discipline of delivering and skills in managing people. So it’s important to get these skills early on,” explains Cook.

So a technical background is still key, but so too is commercial understanding, gained from working in the business or with a supplier. For Henderson, this commercial understanding is becoming an increasingly vital element of the CIO executive armoury. “They need to be more commercial and even entrepreneurial and that means not being risk averse, which is not in the DNA of the classical IT person,” he observes.

Risk versus reward

So again, there’s a polarisation in what’s required of the CIO: on the one hand they are engaged in keeping solutions working 24/7 – a risk-averse activity – on the other they need to be innovative, which naturally involves taking risks. 
On the personal front, CIOs need to be good communicators and to have a well-developed emotional intelligence as well as IQ. “One common thing among the 20 people we placed is they are all good communicators. In order to be successful in any organisation the key skills are the ability to understand what the business wants and be well regarded as a peers,” says Cook. “You do no need to have people speak the same language, have the same values and same sense of urgency. This role often has a problem with communication, because business colleagues don’t naturally regard these people as on the inside and can regard them more like suppliers.”

This ability to communicate needs to extend beyond the organisation, believes Henderson, as CIOs need to engage with their peers at other organisations and share knowledge and experiences with them.

So even if there isn’t as obvious a career path as perhaps becoming a finance director, there are key skills and key roles that arm prospective CIOs with the skills they need. So what would be the perfect CIO CV? Cook takes up the challenge:

“What I’d like to see would be a mixture of things. So they would spend an early part of their career in consulting so see lots of different problems and types of clients and perhaps in different sectors. They would also need international experience and multicultural team leadership at an early stage. I would also be looking at examples of major programme delivery – which doesn’t have to have been successful. I always ask people for examples of how influential they’ve been,” says Cook.

A new place to look for future supply of such people is professional services firm. By looking at people with five to eight years experience there in their late 20s and bring them into your organisation to try team leadership roles.

Architects of the enterprise

Changes in the way business is structured are also affecting the CIO and other IT roles. Adoption of Service Oriented Architecture (SOA), for example, means that importance of enterprise architecture is emerging from the back office to a more prominent business role. IT architects will need to be able to engage and communicate with business people and a small number of senior managers who may have once been part of the CIO role are now emerging with the job title of chief architect of the enterprise. And as enterprise architecture professionals step out of the back-room, Cook sees them as potential future candidates for a more prominent CIO-like role in organisations, provided they possess the required communication and leadership skills. 

Given the fact that the recession has knocked the stuffing out of many UK businesses, has this diminished the strategic importance of the CIO? Not so, says Cook, while acknowledging it certainly hasn’t made the job any easier. “Fundamentally, I don’t think it has made a difference, but I do think businesses are being less sympathetic and being more critical of the IT function, so we’re being asked to do more replacement roles, whereas previously we were looking for succession. So, companies are replacing CIOs who are not performing and that may not be anything to do with systems problems, but could be a lack of business engagement,” points out Cook.

The problems – not being strategic enough, programme and project delivery, managing vendors – haven’t changed, it’s simply that CEOs are less tolerant.
So the role of CIO is changing, but in the majority of companies it’s up to the individual CIO to bring about that change. If they provide a dependable keep-the-lights-on IT infrastructure and are in the background, it’s up to them to raise their heads above the parapet and let the CEO know exactly what their strategic input could bring to the table.

 

Key findings:

IBM’s Global CIO Study 2009 “the New Voice of the CIO” revealed some interesting insights into the challenges facing CIOs worldwide. The research is based on face-to-face interviews with 2,500 CIOs from 78 countries, 19 industries and companies of all sizes.

 

How CIOs divide their time:

  • 55% (activities that drive innovation)
  • 45% (traditional IT tasks)

 

Percentage of CIOs on the senior management team:

  • 55% UK CIOs
  • 33% globally

 

CIOs in high-growth companies:

  • Are 94% more likely to integrate business and technology to spur innovation:
  • Are 61% more likely to turn company data in to actionable information than their low-growth CIO peers
  • Are members of the most senior management team in 62% of cases compared to 46% of low-growth CIOs
  • Spend 87% more time enabling the business and corporate vision compared to CIOs from low-growth companies who spend 74% more time providing core technology services
  • Create IT Centres of Excellence 69% more often than low-growth CIOs to further their organisation’s business and technology expertise
  • 47% more high-growth CIOs believe their senior management teams would rate technology’s contribution to the business as “high” or “very high”.

 

The executive summary of the report can be seen at http://www-935.ibm.com/services/us/cio/

 

Carousel image courtsey of kevindooley, Flickr, CC licence.

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