Cooperation and alignment at the executive level are paramount today—especially when it relates to the intersection of business objectives and technology. The Chief Information Officer position is often underestimated, thus confusion and sometimes tension exist due to a misunderstanding of what this executive leader role entails.
CIOs must juggle building a long-term IT strategy for the business while ensuring new IT development projects are delivered on time and under budget, managing the disparate needs for new tech solutions from different departments, and reviewing cutting-edge technology and trends. Needless to say, it’s a delicate balance, and dropping one of the balls can quickly signal an exit, warranted or not.
Our experts identified patterns that keep appearing when ASC works to mediate and create alignment between the Chief Executive Officer and their CIO. We’ve listed both the problems and their solutions: read on and see if you agree.
- 1. The top IT leader does not need to report to the CEO: As technology becomes more accessible and outsourcing becomes mainstream, both business leaders and shareholders are taking IT leaders for granted. The CIO’s reporting relationship greatly affects an organization’s IT strategy and allocation of resources. CEOs focus on how much value IT delivers to the business as a whole. However, if a CIO reports to the CFO, they may be directed or encouraged to emphasize cost and efficiency over effectiveness in driving objectives.
- The fix:
- Leave the “cut cost no matter what” mindset behind. Costs will always be a factor, but forcing budget to be the only focus doesn’t necessarily translate to more effective results with new technology. In 2020, successful corporations invested on average 2.8% more in their IT budgets, compared to more fragile enterprises that only grew by 0.9% (1)
- 2. CIOs are expendable and easily replaced every few years: The average tenure for CIOs is lower than that of their executive counterparts – anywhere from 18 months to 3 years. IT leaders typically need to job hop in order to advance their careers, as few companies promote from within. But the largest reason CIOs are let go is due to the failure of a major IT project – whether or not the CIO had the resources to succeed or was brought in as an attempt to fix a previous leader’s fiasco.
- The fix:
- Invest in homegrown talent and look inside your organization to find your next promotion. This includes allowing the current CIO to advance in their career and providing co-ownership and buy-in from the business units affected by large-scale programs. Without it, projects are more likely to fail.
- 3. CIO is a cost more than an asset: The CIO and their respective assets are often viewed as a cost to the business. Sometimes this is based on the perception that IT would be cheaper if it is all outsourced, and it contributes to a misunderstanding of the role. See number 5 – an effective CIO is much more than an employee who manages the basic workings of corporate infrastructure. Not only do CIOs require technical expertise and business acumen, but they often manage very large teams, and thus need to be developed fully as a leader and personnel manager.
- The fix:
- Take the time to understand the full scope of your CIO’s abilities and ensure the rest of the executive team is aligned. Instead of asking “Do we really need a CIO?”, consider “What kind of CIO do we need, and how can they support the CEO and company in ensuring the business succeeds?”
- 4. The company does not need a CIO to successfully define and implement a cloud or cloud migration strategy: This is a common oversimplification and short-sighted view, which results in failed projects that cost too much money and don’t deliver on their listed requirements.
- The fix:
- Empower and support your CIO’s leadership as they develop corporate IT standards, enterprise-wide systems, and centralized IT policymaking. Their expertise and direction are essential to successfully executing significant infrastructure projects like cloud migration.
- 5. The IT function is tactical rather than strategic: The most successful leading companies use technology strategically and effectively. This executive position is so much more than making sure the server works or the website doesn’t blink out! One of the most important roles a CIO plays is seamlessly blending tech strategy and application to business operations. It’s not enough to just have technology know-how. This executive position requires a strategic mindset, strong communicators and relationship builders, AND the ability to spot innovation opportunities on both the business and tech fronts in order to effectively drive change.
- The fix:
- Do as much as possible to ensure your organization—including leadership— embraces technology. All employees need to understand how and why corporate technology functions. Make sure the CIO has a seat at the table when developing corporate-wide strategy and is empowered to drive innovation and change for the business.
According to a 2020 IBM report on the state of CIOs, companies that rely on their CIOs to utilize data to make business decisions, build more efficient operations, and forge closer links to their customers are more flexible, innovative, and profitable than their peers. The organizations that invest in technology and innovation are more agile and able to pivot quickly to manage changing business conditions and unforeseen crises.
Did we miss any other misconceptions? Let us know in the comments.
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