“Information is Power,” said someone, somewhere at the time when realization dawned that data alone helps stay one on top of any situation. Today, this sounds more than just a cliché as Boeing recently named Ted Colbert as its CEO. Okay! So, what’s there to shout about? Just the simple fact that Ted was among a handful of CIOs who made it to the corner room in the corporate world where this promotion is usually reserved for people with sales and finance backgrounds.
More than the fact that the top roles seldom have Information Officers, there is also the challenge that these personnel feel about their ability to switch to the all-important head honcho position. Market analysts believe that the Teds of industry have a slightly different mindset in terms of both ambition and leadership skills. This is where CIOs of the day should seek to establish a close association with the other C-suite members, given that the roles are changing and changing fast.
Periphery to Central
Given the technology-focus that CIOs have, there is an assumption that they do not speak the CEO language (and vice versa) that usually is full of sales, finance, marketing and operations jargon. This didn’t matter a few years ago, but with digital technologies offering a host of new prospects, the CIO would be better served by partnering with other C-Suite members to actually drive business growth.
Steve Bandrowczak, President and COO of Xerox, who earlier served as CIO of HP enterprise services was quoted by Economic Times saying that CIOs need to anticipate CEO and customer needs. He goes on to recall that while reporting to HP CEO, he focused on anticipating the things that “kept her up at night,” specifically around what drives quarterly closes, earnings-per-share and other factors that impact the delivery of shareholder value.
Vishal Anand Gupta, Head IT Applications at Religare Health Insurance believes that CIOs should have a thorough understanding of business in order to expand his role beyond the realms of IT. For instance, in an organization where the CEO is looking to expand to newer markets, the CIO could influence the decision-making by giving a plan on how to leverage technology to manage cost or risk exposure.
“The CIO needs to understand the company’s business needs as well as the technologies being used, and accordingly, collaborate with CEO and others in the C-suite to understand its internal workings and needs,” says Gupta.
Unfortunately, in reality things are far from hunky dory. For, it’s often the case that CIOs seek approval rather than inviting other C-Suite partners to a discussion on the Information Systems decision-making process, says Leigh McMullen, vice-president of Research at Gartner. “This can lead CEOs to view the IT department as a service provider, rather than as a strategic business partner, which in turn, can lead to reduced IT budget and a lack of CIO involvement in the making of decisions that affect business outcomes,” he says.
Kumar Parakala, an industry veteran who worked as a CIO adviser with organizations and is currently the co-founder and Managing Director of digital firm Technova, says CIOs are at a crossroads in defining their role. “While CIOs recognize there is a unique opportunity to leverage new and emerging digital technologies to enhance business growth, they also face several challenges – one being underinvestment in IT, which he sees as the primary barrier to a successful CEO-CIO partnership, as business leaders treat IT as a business commodity rather than as a business enabler.”
While CIOs are striving to connect with their CEO and boards in many firms, it may take a few more years for the CEO-CIO partnership to reach the heights of maturity. A study conducted by Advisory Firm Korn Kerry suggests that CIOs are the youngest in the C-suite with an average age of 51 years. They also have a relatively short average tenure of 4.3 years. In contrast, CEOs are the oldest and longest-tenured members of the C-suite. Among all industries, the average CEO age is 58 with an average tenure of 5.3 years.
When discussions center around digital transformation or a succession plan, the question that gets asked is who among the C-suite can take up digital leadership. And CEOs usually do not think that the CIOs are up to the task of taking over the top job, says a Harvard Business Review Analytic Services survey indicating that digital goes beyond ‘mere technology practice’ in the firm.
In spite of barriers, the digital economy is providing CIOs many more opportunities to reset their roles from that of an approval-seeker to a contributor on the discussion table. A 2018 Gartner research suggests that CEOs rank IT as an important strategic asset and as a means through which they can innovate. Hence experts see CIOs gradually becoming the change maker, exerting much influence on the top boss.
“For CIOs to influence future investment choices or increase IT’s credibility and business value, having an engaging conversation with their CEO is critical to being viewed as their CEO’s close confidants,” says McMullen, adding that this would also mean that the conversation the CIO has with the CEO should include how to improve profit margin and about gaining competitive advantage.
Of course, much has changed from the days CIOs fought for a place in the C-Suite as cyber-crime and digital transformation became mainstream. They continue to hold the view that CEOs do not always know what kind of business discussions are mandatory with CIOs before the Board decides to take crucial and often game-changing decisions for the enterprise. Which is why the CIO today has a dual role – of keeping the lights on and providing inputs to facilitate innovative use of technology to spur growth.
Nonetheless, if CIOs aspire to take over the corner office at some time, they need to take an active role (not just interest) in strategic and operational issues related to sales, marketing and operations.
Which is why Ted Colbert’s elevation makes for an interesting case study for aspiring CIOs.