Why CIOs should practice running IT like a CEO
- 24 April, 2018 14:25
Treat the IT organisation as a microcosm of the business
The future is digital, placing a CIO as the key leader in moving enterprises towards that future. It’s the perfect launching pad to move into other business leader roles. Yet some CIOs hold themselves back — maybe because they don't want to take the leadership role or perhaps because they restrict themselves to the technology role.
Many CIOs also have a hard time competing for a business leader role because they "grew up tech" instead of "grew up business." For those who came to the CIO role from outside of the technology domain, the perception may still be one of a technology person.
If you’re a functional CIO who wants to take the leap to become a business leader, the key is to take action. Behave as if you are in the business leader role before you have it. You may have habits that hinder you from stepping into these roles and performing effectively, so new habits will need to be formed.
Shifting into a business leader
To consciously make the shift into a business leader, there are a number steps you can take:
Support revenue generation
Focus on enabling revenue generation. Flip your personal brand from being associated with IT cost to that of contributing to top-line revenue. Successful CIOs are salespeople – they sell the value of IT and the vision of how technology can propel the business. Extend this to selling to customers. Partner with sales to understand customer needs and gaps to serving those needs. Embed yourself in the sales process so the business sees you supporting revenue with ideas and your time.
Learn the data and customer value chain
Use technology projects as a learning opportunity. The very nature of technology requires that IT understands the processes and details of the business. Follow the data of the organisation. Then, become an expert on the business processes that support the operations of the business. These are the building blocks of the business and value is created through them.
Practice running IT like a CEO
Treat the IT organisation as a microcosm of the business. Evaluate the organisation by focusing on the people, the process and the technology. Clarify the IT operating model and align all the aspects of the business to it to ensure that IT processes work effectively together. Investigate technology used by employees and re-examine the digital workplace strategy to make sure they’ve the tools needed to get their job done. Build in continuous cost optimisation strategies to ensure IT is paying the least amount of money for the services provided and allow for the reallocation of those savings to investments for the business.
Earn P&L responsibility
Technology underpins new digital business innovations such as platform ecosystem or API data monetisation, but few traditional executives know enough about technology or business model economics to lead these digital transformations. Digital business has created leadership voids in many enterprises that business oriented and forward thinking CIOs are well positioned to fill. Whether turning IT into a direct revenue stream or adding additional business responsibility, 51 per cent of top CIOs have growing revenue and 44 per cent had growing business margins as one of their personal objectives, according to Gartner research.
Learn the numbers
Understand how the price of products and/or services are determined. Study the next level of detail underneath the balance sheet and cash flow statements reported every year. Talk to leaders who report to the CFO to truly understand how different line items are calculated. If you’ve a technical degree, then you may have missed learning about accounting, finance, economics and operations. You may need the language that is learned in an MBA programme to be a business leader.
Consider being on the board of directors for other companies to learn different business models
Practice by jumping to the punchline
When presenting in front of senior executives, start with the bottom line. Telling a story is a best practice for explaining what the enterprise should invest in and why/how that impacts the business model. However, there’s an art to knowing when and how (and possibly when not) to tell that story. The facts that the business wants to hear are how the investment impacts top-line growth and bottom-line costs and/or risks. Being clear about the bottom line is critical.
Pivot personal brand to business
How CIOs act matters. Changing other executives' perceptions happens one interaction at a time. Take advantage of each opportunity that presents itself to demonstrate understanding of the business and be part of solving business problems. Engage in thought leader discussions about business strategy (not just from a technology perspective). Reframe all discussions of technology initiatives in terms of how they enable business outcomes.
Learn the value of mentors
Mentors challenge us to think about situations and problems differently. They come in many different forms and sometimes from unexpected places. Be open when they’re offered to you or seek out individuals who’ve different experiences, perspectives, business views or career paths. The point is to challenge your way of thinking. Also consider being on the board of directors for other companies to learn different business models, understand the value of a business and learn the language of executive teams.
Practice by managing complexity and leading change
One reason the CIO role can be a launching pad for future roles is because the IT role is inherently complex and constantly changing. Fully embrace the role as the change leader for the enterprise and become excellent at inspiring and motivating employees to travel the journey of change. Bring employees along for the ride by letting them help co-create the vision and by understanding where they are in the change journey.
Christie Struckman is a research vice president at Gartner, focusing on the complex challenges of organisational change and business transformation. She specifically looks at IT management, the role of the CIO, organisational change, cultural change and leadership practices.