Road to the Board – The Transformation of a CIO

As the CIOs prepare themselves to play a more strategic role in the Digital world and become part of the C-suite, there are certain traits they need to develop and practice to make a meaningful contribution to the direction of the businesses.

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According to some experts, the title CIO was probably created in late 80’s / early 90’s. The Chief in the tile reflected the growing importance of the position, a marked change from other tiles like IT Manager or IT Director given to IT heads, as companies started recognizing the role of IT in their businesses.  The title meant that the position would have same level of influence in the organization as the other ‘C’ level positions, like CFO or COO had. However, for inexplicable reasons, the role did not live up to that expectation.

The developments in technology in the 90’s had considerable influence in managing the businesses  as companies moved from largely manual operations to centralized data processing and further to networked enterprise applications. IT was becoming more integral to the business. CIOs have always front-ended these initiatives and though one may argue these were not transformative in nature, companies did benefit to a large extent. Despite such achievements reaching the top echelons of the organization eluded the CIOs.  In some organizations, the role reported to another CxO (CFO in most cases) and not to CEO.  Not many companies bothered to invite their CIO for a strategy discussion and worse still there was still a certain degree of distrust towards technology and CIO in particular.

The digital era we witness has once again turned the spotlight on the CIO possibly more sharply this time. Companies are increasingly recognising the true potential of IT to navigate the business uncertainties.  The advancements in technology such as cloud, mobility and analytics coupled with success of ‘digital’ businesses have compelled companies to look at IT more strategically than ever before. If there is a radical shift that defines IT then it is its leverage to power revenue enhancement than the traditional cost containment.  In this transformation, it is only natural that the CIOs occupy the centre stage as they understand where technology can meet the business and thus potentially step up the pace of the change. As a consequence, the IT box buried under Finance or operations in the company map suddenly seem to get the arrow pointed from the CEO.  Board invites CIOS for PoVs,  CxOs expect CIOs to energize the strategy deliberations and the business divisions that were treating IT at arm’s-length now look up to their CIOs to realise their departmental goals.

Not all CIOs are primed for such higher stakes.  Some CIOs  easily make this journey because of their inherent leadership qualities but most find it difficult. What can CIOs do to stand up to the expectations?  How can they prepare themselves to perform a role that will become highly visible at every major decision?

This article presents a few suggestions to the CIOs to navigate the route and become an integral part of the C-suite.

 Common C-Suite Traits

Before we discuss specific actions for CIO, it may be worthwhile to look at some common traits of C-suite leaders. Borris Groysberg et al, in their HBR article ‘The New Path to the C-Suite’ share a few. They say that the C-level executives have more in common with their executive peers than they do with the people in functions they run.  Not only are they expected to support the CEO but also when required challenge and contribute to key decisions. At that level, the technical and functional expertise matter less than the leadership skills and strong grasp of business fundamentals.

A study conducted by the same author on the most prized skills of a C-Suite executive listed a few common ones – (a) strategic thinking and execution – the ability to think on a global level and have unwavering focus on execution (b) deep familiarity with a specific area of operations , in areas like manufacturing, markets, financials or even technology (c) team and relationship building – building and leading teams and working collegially (d) communication and presentation – possessing the power of persuasion and achieving organization buy-in and (e) change management – the ability to lead change transformation. Additionally, the study indicated traits such as integrity, ethical conduct, inspiring leadership are highly valued.

CIO in C-Suite

If the CIOs have to play the role of strategists and influencers in their organizations, it is clear that they need to imbibe the traits of C-suite executives, draw inspiration from successful leaders, learn from their thinking and actions and adopt the learnings in their areas of operations.

There are four transformative traits that can help the CIO in his journey to be part of the leadership circle. These are:

  1. CIO as a Business Proponent- Ability to look at the business holistically and into the future
  2. CIO as a Team Builder – Ability to build and sustain a high performance IT Organization
  3. CIO as a Risk Taker – Ability to place bets and prove outcomes
  4. CIO as a Learner – Ability to invest time in enhancing personal proficiency

Not all these traits can be gained academically by attending a few training programs. CIOs have to demonstrate through sustained actions and prove their capability to the leadership.

CIO as a Business Proponent

CIOs should gain the ability to view and analyse business holistically across functions and operations. They need to understand the current business imperatives and the future direction and pro-actively assess how they can build the bridge to the future through technology.

business-1370984_1920Contributing to the Decision Making – The businesses of today operate in an increasingly complex environment requiring rapid responses to solving issues.  Decisions on markets or customers need to be taken quickly and effectively. A long lead time between a request for some information and supplying that information would weaken the decision process, a situation companies wish to avoid.  CIOs as the custodians of IT applications and infrastructure have larger control on the data their organizations accumulate. CIOs should make the effort to bring in a data based decision process by pro-actively identifying decision areas or red flags, employing appropriate data mining and analytics tools and providing relevant information to the CxOs, instead of waiting for the requests.

Participating in Business Reviews – As a corollary to the above, CIOs should offer to participate and contribute to the business reviews by sharing their observations of business and making presentations on the companies’ performance as supported by the data.  During the meetings, it is important for the CIOs to see the situations from the business point of view than the comfortable technology view and make recommendations on possible course of actions on the business front. It may be difficult to convince the business leaders and be recognized as a serious contributor in the initial stages, but a relentless persuasion using data can change the minds of the leaders.

CIO as a Team Builder

If the CIOs have to focus more on strategic affairs, they have lay the foundation and build a strong IT organization that can run efficiently and manage the regular demands with little supervision. IT delivery is always a team work considering the range of skills required. Poor team structure leads to inept resourcing, inability to resolve operational issues and other risks reducing the CIOs to fire-fighting mode and severely restricting them to do justice to their ‘C’ tag.

Running IT department as a business – CIOs should attempt to run their departments like a business right from developing a vision, formulating and communicating clear objectives, documenting the business plan, following consistent measurement systems and all the works. CIOs also need to publish the monthly / quarterly performance for the stakeholders to communicate the hits and misses of the department.   Another important indicator of the way the IT organizations function is how the IT budgets are structured. There have been a number of studies which point out that more than 70% of the IT costs are spent on maintenance of existing systems leaving a much smaller share for future requirements. If their organization suffers from this issue, the CIOs should make effort to swap this ratio as early as they can. They need to re-orient their approach to budgeting and evaluate measures towards running the existing operations tightly and investing for the future.

Building a high performance team – A team that is self-sufficient and empowered can relieve the CIOs from the daily chores. An approach CIOs could consider is structuring the team differently for the current operations and the future requirements. The ‘Run’ team (managing current operations) would stress on governance, risk mitigation and continuous improvements. The team for the future would be more risk taking, working closer with the business functions and willing to experiment. Overall, the CIOs should bring in a culture of ideation, customer orientation and knowledge sharing.

CIO as a Risk Taker

A key characteristic of C-Suite leaders is their ability to take risks and lead from the front on new initiatives.  For companies, the digital transformation is about placing bets on a number of technologies that are in the offer and choose the right mix and scope of such technologies. CIO is best placed to explore and bring these technologies to the business. There may be many first time attempts which may not provide the required results and thus may require multiple trials. CIO should take such risks considering that the value of successful attempts even if they are small in number will far outweigh the value of large number of failed attempts. Most CIOs are normally tuned to taking up safe projects that are proven in the industry and taking bets is not natural to them.

Gaining Value by Loosening Control: Many CIOs still believe having direct control on IT assets is key to managing them well and probably to their survival.  They wish to own the software, locate datacenters in proximity, restrict access to data, have their team working under their eyes and get involved in procurement of all IT needs. However, as the technology becomes more pervasive and widely spread-out, decentralizing is crucial to get the best results. CIOS should identify areas where decentralizing can help, establish guidelines and facilitate business functions to support themselves to the extent required.

Bets on Automation: The availability of multiple technologies across the operating spectrum has provided the organizations the tools to drastically enhance the automation levels and reduce manual dependencies.  The options can be overwhelming and risky but CIOs should make those bets and move into a continuous  process of prototyping and rollout across these technologies instead of waiting for them to be proven in the industry and taking them in a bing-bang’ approach. They also need to learn to put together a business case quickly for the changes they propose and continuously evaluate the results against the business case and take corrective actions.

CIO as a Learner

The most important quality among all is the ability of the CIOs to push themselves on to a continuous learning path. On one hand we see the business getting more complex and dynamic and on the other hand, we see an exponential change in technology.  Some get hyped and die soon and some really prove their worth to the business.  CEOs and CxOs often turn to the CIOs to get their perspective on what will work and what will not for their businesses. Only a continuous learning process will help to be on top of the situation.

CIOs need to dedicate a few hours every week towards learning the business and technology developments through primary and secondary sources. It may help to have clear learning goals and plans not just for them but also for their team members.  The advent of MOOC, for instance has transformed the learning process offering a number of courses on business and technology and a majority of them free.

Looking into the future – CIOs typically would have a good knowledge of the on-going activities of the company due to his and his department’s involvement in the day-to-day support. It is equally important to understand as much the vision and direction of the company. There is no better person than the CEO to articulate them be it on the emerging areas where the company is looking for growth in the immediate term or future areas where the company would find itself in the longer term. CIOs would need to linkup to their CEOs or CEO’s office on learning sessions and on similar lines connect with CxOs for their perspectives. They should also get into the habit of doing research through secondary sources to understand the industry, market and competition.

mark-516277_1920Strengthening the fundamentals – CIOs need to invest substantial time to strengthen their business fundamentals and they can do this by seconding themselves to work in another function. Most of the time, their knowledge of the business is based what the functional people say than what they themselves experience.   They could spend a few days in Sales to understand say customer journey cycle or with supply chain to know the distribution challenges. They have to pro-actively seek time from other CxOs for one-on-one sessions for a constructive exchange of ideas on business and technology and in the process figure out ways to power business through technology.

Developing Technology Proficiency:  CIOs should keep track of the progress of their domains in the industry. There are a number of ways CIOs can equip themselves with the developments. Industry seminars, CIO forums and peer groups discussions provide great learning experiences.  CIOs should encourage his team to build knowledge portals and share their learnings and articles of interest. There is a tendency to learn through ‘trial and error’ which may be individual oriented have a high rate of ‘giving up’, instead CIOs should move their team towards a group learning process and be themselves active in that learning circle.

Developing Personal Proficiency: As the CIOs will become key influencers, it will help their cause if they consciously develop in them certain fundamental skills that make c-suite executives stand out. Clarity in communication, compelling presentations, preparing clear business cases, being ease with numbers are some traits commonly observed among the C-suite executives.  This is important for the CIOs as they present business cases, they need to avoid technical jargons, use the business taxonomy and more importantly articulate the business benefits than technology specifications.   Further, managerial skills that a CIO ought to be proficient in, like stakeholder management – understanding their positions and converting the opponents –change management, program management continue to be critical qualities that CIOs should invest further.

Character Shifts

So, here is a summary of what can be some o f the key shifts for the CIOs:

From

To

Technology geek Business leader
Order taking Direction setting
Functional impact Organizational impact, seeing ‘Big-Picture’
Sequential / linear thinking Multi-tasking, addressing inter-dependencies
Measuring cost and time Measure outcomes
Control freak Facilitator

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It is indeed an interesting time to be a CIO. The renowned computer scientist Ray Kurzwel  said in the beginning of this century that the progress in technology in 21st century will be more like 20,000 years of progress at the prevailing rate that time. He defined it as ‘Law of Accelerating Returns’ where the ‘returns’, be it chip speed or cost effectiveness would increase exponentially.   As the technology is making deep inroads into businesses, CIOs are best placed to bring about the changes rapidly and effectively.  Locking the opportunities coming their way and being the one to take the initiative and risks, would make the CIOs central figures to orchestrate the business transformation and be recognized as one among the C-suite  leaders and move further to become part of the Board.

In the article “Unlocking the performance of a CIO”, the author Joe Peppard quotes a CIO who urged other CIOs to ask this question, “ Are you a business leader with special responsibility for IT or are you an IT leader delivering to business”.  The time has come for the CIOs from being the latter to becoming the former.

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About Raghuram S

I am a Management Consultant with over 25 years experience in the industry and run my own firm called Cohere Consulting since 2008 focusing on business strategy, IT advisory and program management. Prior to this I was with some of the top consulting firms in India including S.B. Billimoria, PricewaterhouseCoopers and IBM. I have participated in a number of strategy and IT delivery engagements across a wide range of industries including manufacturing, consumer products and IT Services. In addition to my consulting assignments, I also spend considerable time in industry research and teaching at premier management institutes. I am based out of Bangalore. I have an MCA from Birla Institute of Technology, Mesra, Ranchi and an MBA from XLRI, Jamshedpur. I can be contacted at raghurams@cohereconsulting.com
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