You have a new CEO. Now what?
- 15 February, 2013 15:37
The changing of the guard at the top of an organisation can, and does happen. In today's profit-aggressive business landscape, the arrival of a replacement CEO part way through your CIO tenure is a not uncommon possibility.
As the purpose of IT is to enable the business to achieve its goals, in one sense nothing should really change with a new CEO -- if the corporate strategy maintains its course.
In reality, most new CEOs will want to stamp their own personality on things -- isn't that why they were recruited? Engaging with the senior executive, while maintaining a good working relationship, is therefore pivotal to success for the CIO. In practice, a lot will change.
One thing I've learned in a long IT career is that "the boss makes the job". As CIO, your boss is most likely to be the CEO (or certainly a key stakeholder). Having a change of chief executive midway through execution of your strategic IT roadmap will surely have implications which must be managed.
A CEO who sees IT as a costly operational nuisance, compared to one who sees IT as a vital strategic partner and business enabler, are very different working scenarios.
So what changes could an incumbent CIO expect with a change at the top?
There are three potential impacts:
Strategy: The directional emphasis of the business could significantly change, which will directly impact the IT strategy and delivery model.
Communication: The dynamic between the new CEO and CIO will change, requiring a different 'bedside manner' when engaging your key stakeholder.
Budget: The fiscal landscape could change dramatically resulting in increased funding availability or (let's be realistic) a greater scarcity of capital.
Despite widespread posturing about the importance of technology for corporate growth and survival, unfortunately there remains minimal IT representation at board level within big business.
Boards are elected by the shareholders to represent them. Traditionally, the board would devise the business strategy. The board would then appoint a chief executive who was charged with delivering their strategy and reporting back on progress.
Nowadays, the common tendency is for the board to charge the CEO with developing the business strategy. This results in the CEO engaging with senior executives to develop a plan and then presenting this plan to the board for approval.
This contemporary model is a devolution of part of board responsibilities to the CEO. This delegation process breaks the governance structure of the traditional model. (This is evidenced daily in the press with CEOs paid out and replaced when strategies go awry. Rarely is there publicly visible comeback to the board, which is ultimately responsible.)
As the experience and skill set of CEOs vary, this strategy delegation model is a high risk approach to company management, especially as tempting "low hanging fruit" options tend to be pursued by CEOs more frequently over longer term visions (which could provide sustainability and growth of the company when markets downturn).
A sudden change in priorities could seriously impact the CIO when they unexpectedly find that newly anointed priorities are syphoning off much-needed capital and resources.
Unfortunately, a complex IT infrastructure rollout doesn't usually respond as quickly as the changing mind of a CEO with short vision. So a stable incumbent CEO (and continuity of the strategic business vision) is definitely pivotal to ensuring consistency of sponsorship for the CIO.
It is also prudent for CIOs to resist basing their IT strategy on the personality of the incumbent CEO. In other words, take care not to follow a certain strategic path just because of the influence or prejudices of the CEO -- things could change.
There needs to be an inbuilt degree of flexibility into any IT strategy to compensate for minor business direction changes. Ultimately, a healthy collaboration between the CEO and CIO will usually forge a good, workable business and IT strategy.
Geoff Lazberger worked as a CIO for three separate corporations across investment banking, property development and hospitality. Email comments and feedback to firstname.lastname@example.org.
This article came out as part of the report on the State of the CIO Survey 2013.
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