Executive summary Taking charge: The essential guide to CIO transitions

Introduction

As CIOs transition among companies and environments, many frequently juggle new leadership responsibilities, shifting business mandates, and complicated technology projects. Taking charge: The essential guide to CIO transitions leverages lessons learned from several hundred interactions with CIOs in transition.¹

The goal of this report is to share insights, identify common transition patterns, and provide recommendations to help CIOs prepare for a successful transition. Here are some highlights of the research.

Shared characteristics of CIO transitions

Although every transition is unique and there is no single formula for success, we do find consistent themes and characteristics.

• Evolving business needs and dissatisfaction with IT can drive transitions. About three-quarters (72 percent) of business stakeholders said that a significant change in the company’s direction or strategy preceded the CIO transition, and about the same percentage (74 percent) reported that change was necessitated by a general dissatisfaction with IT.
• Internal candidates are often preferred, unless drastic changes are needed. Overall, internal candidates were nearly twice as likely (64 percent) to be selected for the CIO role compared to external candidates (36 percent). However, when the former CIO was demoted or asked to resign, or the CIO role did not previously exist, companies preferred an external candidate.
• Emotional intelligence can be more important than technical competence. Forty-five percent of business stakeholders we interviewed said that they selected their new CIO because of leadership and credibility, attributes that stem from emotional intelligence. Strategic thinking, business alignment, and technology vision were all lower priorities.
• Talent, timely execution, and relationships are often key measures of success. Fifty percent of business stakeholders surveyed named creating a high-performing IT talent and culture a key measure of success. Timely execution of critical IT initiatives (49 percent) and strong relationships with key business leaders (47 percent) were also named key success metrics.

Three critical dimensions: Time, talent, and relationships

Our current research validated the three key success measures uncovered in earlier Deloitte research: Time, talent, and relationships continue to remain the most critical aspects of CIO transitions.²

Time. Transitioning CIOs spent the majority (62 percent) of their time handling operational and technology management responsibilities such as understanding the IT environment and stabilizing core IT operations. Business stakeholders often underestimate this operational focus and expect CIOs to drive strategic work immediately. Early in their tenure, CIOs may need to reset these expectations and, over time, shift toward strategic activities.

Talent. Seventy-three percent of business stakeholders surveyed named talent a top priority. New CIOs often have to quickly assess talent, fill key roles, and realign and integrate the current team to eliminate siloed centers of expertise. Transitioning CIOs often face difficult talent decisions, such as recalibrating the leadership team to infuse IT with new ideas or replacing recalcitrant staff who are resistant to change or new leadership. Many CIOs are able to retain and engage high performers by rebranding the IT mission and role, and building an IT culture that inspires, excites, and challenges staff.

Relationships. Many CIOs told us that building deep relationships with key internal stakeholders can help them align with business priorities and influence corporate strategy. As the CIO role expands, establishing or renewing important relationships with ecosystem partners such as vendors, customers, and innovation incubators can help CIOs deliver technology capabilities, identify opportunities for delivering business value, and drive rapid disruption.

Common transition scenarios

Our research revealed four distinct transition scenarios, each requiring a different approach for dealing with opportunities and challenges.

• Internal hire. Many internal hires are slow to make talent decisions because of their existing relationships. Some are first-time CIOs; they may find it difficult to delegate work and manage reports who were formerly colleagues. Inside hires may encounter resistance from peers who were vying for the same role. Many inside hires we interviewed said they underestimated the importance of relationships.
• Hybrid insider. A hybrid insider is a non-IT leader from inside the company who is asked to lead the IT organization. Coming into the role, the hybrid insider may be overwhelmed with technical jargon and may quickly need to learn about relevant technologies. Existing IT staff may be skeptical of the hybrid insider’s authority, causing him or her to work hard to gain credibility and respect. Many hybrid insiders report being surprised by the complexity of the IT environment, and a common mistake can be to overcommit to business partners, focusing on short-term wins at the expense of long-term total cost of ownership or broader strategy.
• External hire. CIOs are typically brought in from outside the company when significant change is needed within IT. They often are given a short timeline to end or redirect bad initiatives. In addition, they typically must simultaneously gain understanding of a new industry, culture, and business, and they may take longer to establish key stakeholder relationships than internal hires or hybrid insiders.
• Mergers and acquisitions (M&A) or divestitures. CIOs in M&A- or divestiture-driven transitions have a unique situation and are not always new hires. M&A and divestitures generally present CIOs with tight deadlines, strict financial and talent targets, and the complex task of either integrating or separating multiple business-critical applications and platforms. Often, the CIO may be working with unfamiliar IT staff.

Navigating the transition and beyond

Regardless of transition scenario or business context, CIOs will likely face many challenges and difficult decisions as they navigate the triangle of time, talent, and relationships. CIOs can benefit from creating a vision for prioritizing key business initiatives, developing talent and culture, and enhancing governance and operating models to build deeper business relationships.

Increasingly, this also involves stepping up as the company’s digital leader by crafting a digital strategy; building multifunctional, agile teams to deliver business impact; developing real-time information systems to support decision making; and encouraging staff to iterate, experiment, and adapt.