What CEOs Want From Their Next IT Leaders
- 07 October, 2008 15:46
The question of what CEOs want from CIOs has been asked for as long as chief information officers have existed. On the face of it, the granting of a C-level role would appear to ensure that information leaders are regarded as strategic authorities by their ultimate bosses. However, reports of what status the CIO has in the organization remain mixed. CIO magazine in the US recently gathered together leading executives and academics to discuss the CIO-CEO relationship.
Michael Friedenberg (CIO magazine): What has changed about what CEOs expect from the CIO?
Raj Gupta (Kellogg School of Management): I have talked to 15 to 20 CEOs directly, and they are looking for someone who can be a trusted business partner. Of course, the CIO has to keep the trains running; otherwise there is no opportunity to be a business partner. But CEOs want the CIO to be a senior leader such that, when you are with the rest of the executive team, it's hard to tell that you are the CIO.
Chris Patrick (Egon Zehnder): No CEO asks us to recruit a great technologist who can get email working -- that's table stakes [the minimum requirement]. They want people who can connect the technology to their strategic intent. I have clients who are investing billions of dollars in IT. They want a person who can show the team the ROI from this investment.
Bob Badavas (TAC Worldwide): A lot of what CIOs have developed and been known for during their careers is now just table stakes. The equivalent with the CFO is the ability to balance the books. I don't give the CFO a lot of credit for that. CIOs must move beyond the plumbing. At the end of the day, what CIOs are paid to do is take a full seat at the strategic planning table and be an integral part of the strategic decision-making -- which means they need to know what business they're in. Get out of the office and find out why people buy your product or service. IT is a strategic weapon. To find out how to use it, the CIO must get out of the office and engage with clients and the front-line distribution or sales organization.
Steve Merry (Sara Lee): It's imperative that the CIO is at the table. Technology is a given: it works, and there is more than enough technology to last us the next 100 years. We need to get value from that by removing the clutter and making it easy to use. Then we can sit with our business partners and take the business forward, focusing on things that make a difference -- growth, innovation and acquisitions.
Friedenberg: I don't know of any CIO or CEO who would disagree with the need for CIOs to drive business value. But not everyone succeeds in doing that. Do CEOs really mean what they say about CIOs?
Patrick: CEOs all read the same Harvard Business Review articles. They all want "strategic CIOs". But often they are not sure what to do with them and how to best leverage the talent and expertise these individuals can bring.
Gupta: While everyone wants this strategic role, both sides are not quite sure if the CIO is as ready as they think. The test I pose to CIOs: 'Can they talk to the management committee and outside stakeholders in a language that doesn't label them as a CIO?' That's the test of credibility. The CEO isn't quite ready as well. They are so engaged in keeping the business running that they have trouble finding time to give the CIO the opportunity to be a strategic business driver. They must have commitment and belief and not just talk the talk.
Friedenberg: Bob, as our representative CEO, how do you respond to that?
Badavas: CEOs have the company they deserve. If I say 'get out of the office' and don't give you a travel budget, who are we kidding? I can't say IT is important if I'm cutting initiatives that could enhance the value of our infrastructure. I can't pontificate on how you should transform yourself if I'm not willing to make a personal investment. My responsibility to my direct reports is to have an environment that allows them to blossom to their full extent, and to allow them to make mistakes. I owe them the opportunity to grow and to be part of my succession plan. I have had conversations with them that start: "If you want to be a CEO someday...".
Patrick: There's an opportunity here for the CIO because there's an appetite at the top for people who are different. If you can show that you're different and bring strong business skills, you will be in demand.
Merry: Who has broadest perspective across the business? I say it's the CIO. All the other executives are focused on a particular segment of the business. If a CIO has been around long enough, then nothing is new. I hear the same arguments I heard 30 years ago. We've seen everything done several times over and can give that perspective back to the executive team. But we must have the balls to challenge the people who see themselves as experts in their function area. Speak up or you don't have the right to be in the room.
Reporting to the CFO
Friedenberg: CEOs say they want the CIO to make this broad, strategic contribution as a business partner, yet they continue to have the CIO report to the CFO.
Badavas: The CIO has to report to a CXO who believes that people should not just be focused on their functional silo. It's fine if the CIO reports to a CFO who is tracking to be a CEO. But if it's a functional-oriented CFO, then that flows downhill, meaning the CIO will probably be expected to focus on the IT function only. How can the CIO communicate the value of IT if the CFO has IT sitting in a corner just like the maintenance function of the company?
Patrick: One of the first questions I get from CIOs when I'm conducting a search is "Tell me about the reporting structure". In general, the reporting structure is a good proxy for how strategic the role will be. It's not an absolute -- I meet some highly effective and strategic CIOs who report to CFOs. But it is a good indicator. More important is how the company is structured. Is it in a way that truly leverages the CIO position? It's clear that Steve [Merry] plays a strategic role because he's meeting with the business leaders regardless of who he reports to. It's not black and white.
Gupta: The reporting relationship is just one indicator. Is the CIO involved in the informal dialogue that happens within senior leadership circles? If you are only involved when presenting the IT plan, then the opportunity is missed. I think CIOs do have the broadest possible perspective of the business. But why doesn't the rest of the firm understand that? The answer lies in communication; the ability of the CIO, and just as importantly, his IT team, to speak the language of the business.
Merry: It has to extend to the next level down. If my direct reports can't get out and mingle with the business and speak up and be respected, then I have failed too. So when selecting the next level down, you need to find business-savvy people who can converse with all of the business at the level where things actually get done.
Badavas: The layer below the CIO and the CEO for that matter is the enabler of how high we can fly in our own positions. If my executives can't push me up higher, that will impair the growth of my company. We generally don't spend enough time thinking about and clearly and overtly communicating on succession planning. But it's a key to success. A philosophy I adopted long ago was that to get to the next level you have to behave and think as if you are on that level. If you don't, you won't get there. The same goes for your direct reports.
Gupta: Management must grasp the CEO's agenda. It's not technology. It's growth, innovation, risk mitigation, alliances. The CIO and the management team have to figure out how to feed into that agenda.
Audience member: We also have to be better sales people. Other CXOs are out tooting their own horns every chance they get. I was shocked when I moved into IT to see how little the team bragged about its accomplishments. They had no PR plan. You have to convince people in real ROI terms why IT is important.
Gupta: Many CIOs see marketing as a dirty word.
Merry: We branded our IT group. We gave them a logo and played the marketing guys at their own game. Sell yourself because you have something to sell.
Badavas: Don't market 'stuff'. Market the value, the result you caused. That will have people sit up and take notice. CEOs would love to cut through the pre-amble before the answer. Start with the answer and then you've got my attention.
Patrick: But be careful what you ask for. If you ask for that seat, you'd better be able to deliver value. If you can only talk about speeds and feeds, you'll find yourself quickly out of there.
Friedenberg: [To audience] How many CIOs are in customer-facing roles? [Few hands are raised.]
Gupta: Other CXOs are more comfortable than CIOs in that role.
Badavas: It may not be as natural for a CIO as it would be for a sales leader, but you're all much better than you think when it comes to talking about using information as a growth driver. You need to be put in the right opportunity to succeed. Then getting up in front of the customer is a natural. It's a requirement for our CIO. 'Everyone sells' is a basic premise at our company. Because we provide contract and temporary employees to businesses, our CIO represents the customer more than any other executive. He is uniquely positioned to get in front of our clients and represent the service our company offers.
The long view
Friedenberg: What does the role of the CIO look like 10 years out?
Gupta: Boards of directors will get younger, and they will have more appreciation of technology. So there'll be a better chance for that connection with the CIO to happen naturally. But since many more people in the organization will understand the strategic use of technology, the person with the CIO title will no longer have a monopoly on that. Expectations will be higher as both sides get more sophisticated.
Merry: It won't be like today. We won't have the typical roles. There will be more collaboration and partnerships with non-competing companies in the use of technology and sharing of resources. You won't need a CTO in the organization: HP will do that and you'll manage the relationship. There'll be a much smaller senior IT team working with the business and managing relationships. And there will be a lot of Indians and Chinese in our organizations.
Friedenberg: What advice would you give the audience that they could take away and use to get better prepared to meet the new CEO expectations?
Patrick: Get exposure beyond your function area of expertise, and get inter-national experience -- live overseas. I look for that with every person I place. And though it seems basic, work for good companies. People want to hire talented, innovative change drivers.
Merry: Be brave in front of the business and make sure you get the relationships and governance right.
Gupta: Learn the CEO's agenda, get your team on that agenda and make sure the CEO knows you understand that agenda.
Badavas: Make something happen from a business perspective. Influence your peers, articulate future possibilities and just be bold.