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Shaping CIO Legacy
ME PoV Summer 2016 issue
In terms of demands, the Chief Information Officer’s (CIO) role has varied widely over the last few years, perhaps more than any other CXO position. The CIO today is expected to take on a much larger role in running an organization and shaping its business strategy. In essence, every company today is becoming a technology company and the CIO has a unique opportunity to drive and impact both, top-line and bottom-line initiatives.
For highly successful organizations, the CIO’s impact and influence is extending well beyond the day-to-day operations of its IT investment. The CIO’s business priorities are not confined to their industry and are operating in an environment where industry boundaries are blurring. CIOs play a critical role and are instrumental in enabling the organization's ability to predict and quickly respond to market demands. Their effective use of technological disruptors is allowing organizations to reach markets well beyond their geographies.
In preparing for the Deloitte 2015 Global CIO Survey, we examined CIO job descriptions to determine the role of a CIO. Our analysis was built on our experience, which identified business priorities, leadership and talent, relationships, and investment priorities as the four factors that shape a CIO's legacy and three distinct patterns/clusters CIOs fall into on how they deliver value. We looked at the attributes, skills, and competencies that define the CIO role across industries, geographies, and company size. We analyzed how CIOs deliver value and how they operate within the leadership ecosystems of the organizations they serve.
Context shapes the CIO agenda
The marketplace and the individual organizational strategy sets the context for the CIO agenda. It defines the boundaries of the CIO playing field and sets very high expectations for performance. CIOs are involved not just in driving efficiency, but also in reimagining customer experiences, reshaping how work gets done, and even rewiring business models. Business priorities are key drivers for shaping the CIO agenda. CIOs around the globe were nearly unanimous in identifying the top five business priorities: performance, cost, customers, innovation, and growth. These top priorities were consistent across industry, geography, and size of organization. One understandable exception: CIOs involved in the public sector selected “cyber security” over “growth” as a top priority.
CIOs need to have not only technology acumen but also the courage and conviction to lead their organizations through change. CIOs need to have the ability to craft a long-term vision, and possess the dedication needed to manage the day-to-day operations.
CIOs unanimously expressed a desire to spend less time on operational activities and more on strategic activities. But when asked about their biggest obstacle, many responded that they lacked staff to whom they could delegate. Those CIOs who do invest in their talent often rely on their lieutenants to augment their skill sets; they focus on building a team that can deliver a balanced set of IT capabilities. CIOs should give themselves the choice to spend the time on the things they need or want to spend time on. Building a comprehensive IT organization structure and support system will allow a CIO to effectively delegate his responsibilities and focus on the value added activities expected of them.
When asked, CIOs overwhelmingly picked the following six as the most important for success in their role: influence with internal stakeholders, communication skills, understanding strategic business priorities, talent management, technology vision and leadership, and the ability to lead complex, fast changing environments. However, 91 percent of CIOs in our global survey acknowledged lacking at least one of these key skills.
Three skills with the largest gaps were the ability to influence internal stakeholders, talent management, and technology vision and leadership. These gaps point to a general proficiency in “managerial” skills and a relative deficiency in the “leadership” skills for CIOs.
Building credibility and influence
The ability to influence internal stakeholders was among the top competencies that successful CIOs require. However, many mix up strong relationships with the ability to influence business decisions and initiatives. While having good relationships, these did not guarantee influence and credibility. Our global data suggests that a majority of CIOs are not yet truly influential.
One CIO advised that the four ingredients to build influence are “trust, credibility, consistency, and track record.” The CIO’s relationships must extend beyond C-level and business unit leaders/senior executives to include other business stakeholders and executives. The CIO should spend the time listening, relate and empathize (not sympathize) with businesses and their challenges.
CIOs must sell their capabilities and value adds to the business. Frequent interactions with other business stakeholders are a key ingredient to their effectiveness and influence within the Csuite. They must demonstrate their credibility and trustworthiness consistently.
Business leaders expect CIOs to provide the competitive edge to their organizations through technology. Technology investments represent the basis of value and impact for a CIO. The budgets that CIOs oversee and influence are a direct reflection of how they are creating value for the organization.
CIOs have faced the age-old challenge of optimizing operational spend while creating a long-term vision and infrastructure to support the future needs of the business. This is further complicated by technological development and rapidly increasing number of disruptors a CIO has to face. It is essential for the CIO to introduce technologies at the right time in their hype cycle to address specific business needs. Being hard-pressed to introduce a new technology at the wrong time or without strong business need could result in an undesirable outcome.
When asked which technologies will have significant impact on the business within two years, CIOs unsurprisingly named analytics, business intelligence, and digital. What was surprising was that the definition, scope, and specific technology investments for each of these technology initiatives varied significantly from organization to organization. This lack of definition is often confusing for business leaders and can lead to misunderstandings and conflicting goals. It is the CIOs responsibility to remove the technical jargon and focus more on the business solutions, impact, and value that these technologies deliver.
There are three different patterns that describe how CIOs are delivering value today and provide a powerful approach for understanding how CIOs must adapt to meet the dynamic requirements of their roles. These are as a trusted orchestrator (operator), business co-creator and change instigator.
The Trusted operator (orchestrator) CIO is the largest CIO legacy group at 42 percent. They are focused to deliver operational discipline within their organizations by focusing on cost, operational efficiency, and performance reliability. They also provide enabling technologies, support business transformation efforts, and align to business strategy.
The business expects trusted operators to concentrate their efforts on the fundamentals of delivering consistent, reliable, scalable, and secure technology while ensuring cost efficiency. Trusted operators are most likely to report to the CFO because of their cost mandate.
The Change instigator CIO represents the smallest CIO legacy pattern group, accounting for 22 percent of our survey population. A Change instigator CIO takes the lead on technology-enabled business transformation and change initiatives.They allocate significant time to supporting business strategy and delivering emerging technologies.
Change instigators’ investment priorities tend to be customer-focused, with a priority on flexibility and speed. Because of their mandate, change instigators typically report to the CEO. They would be actively looking for ways to enhance the role of technology in their organizations.
Change instigators spend much of their time, naturally, initiating change. They have strong involvement supporting end customers and are most likely to be engaged in end-customer-related initiatives. They are highly interested in aggregating and analyzing data to help business leaders make more informed decisions. They ranked analytics as the technology that will most impact their business in the next two years.
Change instigators are often brought in to change the status quo and are likely to be found in organizations undergoing fluctuating corporate revenues. Change instigators have an unambiguous view of their destination. They are experts at painting a picture of this destination and motivating others to follow and execute.
Business co-creators account for little over a third (35 percent) of the survey population. Their primary job is to support and drive business strategy and spend most of their time on driving business strategy and enabling change within their businesses. Co-creators represent the most balanced of the three patterns in terms of time allocation across the breadth of CIO activities.
Business co-creators instinctively want to balance cost and performance goals with growth, innovation, and customer goals across the organization. They predominantly report to the CEO and spend relatively less personal time on building technology platforms and running operations.
Business co-creators tend to have diverse backgrounds and successful records of accomplishment working in multiple business areas. Because business co-creators have influence and credibility within their organizations, they generally have a seat at the table with other leaders. They tend to make significant investments in building talent so they can focus on their strategic roles.
Business co-creators are interested in new technology primarily as a way to drive new sources of revenue or to transform the way they deliver value to customers. They see analytics as a key to building new business models and digital as a way to drive new revenue.
Shaping the legacy
Shaping the legacy is driven by the CIO answering: “Why do we do what we do?” In some cases, the answer extends well beyond the realm of business and profession to blend a CIO's personal passion. Four significant themes around the CIO’s personal passions and motivations emerged:
- Maximize the impact of IT and have a strong desire for their companies to understand and appreciate the contribution that IT can make.
- Use technology to help their people become more effective in their jobs, make better decisions, and lead happier, more fulfilling lives.
- Aspire to broader leadership, especially as their companies come to recognize how technology can drive competitive advantage.
- It is personal; many CIOs want to use their position as a platform to give back to their communities and companies.
Shaping CIO legacy requires reflection, understanding, and intentional selfdevelopment that considers both perspectives. As we think about the three patterns previously discussed and chart out a plan for how to evolve, CIOs should consider the following:
- It is not one size fits all–one CIO legacy pattern is not better than another. What matters is choosing the pattern that matches the business context as framed by the four elements at any given time.
- Accommodate change–CIO legacies are works in process; patterns are fluid. A different pattern may be needed when the business context changes.
- Grow with your organization–leading CIOs consciously move from one pattern to the other based on their time and place. They develop, hire, or rent talent to fill any gaps in complementary skills needed to succeed and add business value.
- Expand your horizon–it’s uncommon to find all answers and insight within yourself, or even within your team and organization. Build peer relationships outside your four walls, outside your industry, and even outside other CIOs. Seek mentors, and reciprocate.
The CIO job description will continue to evolve further, integrating technology and influencing, if not driving, business operations. CIOs must continue to align with, and look for, opportunities to contribute to the success of their organizations beyond the day-to-day operations. They should enable their organizations to predicting and quickly respond to market demands. CIOs who are successful at supporting business priorities, developing organizational leadership and talent, building influential relationships, and focusing their investment priorities will be able to shape their legacy to significantly impact the success of their organizations.
By Rajeev Lalwani, Lead Partner, Technology Consulting, Deloitte, Middle East