Why CEOs Want CIOs to Drive Digital Business

At Industrial Corp, a midsize company headquartered in the U.S., executive meetings are increasingly focused on digital business. The head of sales mentions analytics and artificial intelligence (AI) as ways to sort through data and target new leads. The chief supply chain officer is excited about how blockchain might revolutionize logistics. The chief human resources officer talks about the challenges in attracting digital talent. However, all the pieces of digital business that are being discussed highlight a distinct lack of ownership. Great ideas and technologies, but there’s no real adoption plan.

This void represents an opportunity for the CIO to step forward and create direction for the enterprise and its digital ambitions. In fact, the CEO will soon be looking to the CIO to do just that.

More midsize enterprise CEOs are now focused on enhancing technology leverage and structural and workforce deployment to grow and scale the business. The role of the CIO in an MSE is more critical than ever. Digitalization is driving business change and CIOs must decide now to capture the opportunity that this presents to them and their organizations.

The Gartner 2018 CEO Survey looked at responses from 460 CEOs and C-level business executives to pinpoint goals and concerns from the C-suite. Out of those, 220 respondents were from midsize enterprises (MSEs), organizations with $50 million to $1 billion in annual revenue.

Growth was mentioned less frequently in the CEO Survey than in previous years, but it is not less of a priority. The focus has merely shifted from small incremental growth to strategic changes within the business that will enable more substantial and sustainable growth. MSE CEOs are no exception, with the majority of enterprise leaders citing changes to the business and culture as goals for 2018 and beyond.

Identify growth opportunities

Sixty-three percent of MSE CEOs surveyed said they have embarked on a digital business journey comprising optimization and transformation. MSEs are seeking growth through geographic expansion, which requires scaling and optimization within the business. They can win big with a series of smaller bets, aligning these investments with the development of the necessary set of digital technology platforms. MSE CIOs should focus on enabling the delivery of existing value propositions to new customer segments, markets and geographies.

Talent and skills

Midsize enterprise CIOs’ biggest internal challenges are employee issues, talent and skills, making talent the No. 1 priority for those looking for real digital business growth. In fact, nearly one-third of MSEs cite a “lack of appropriate talent and capability in the workforce” as the biggest or second-biggest inhibitor of digital business progress.

MSE CIOs are looking for traits such as adaptability, leadership and nontechnical business skills, for example, in marketing and sales. Given that MSEs often work with leaner teams, the focus will naturally be on versatility. CIOs should create a plan that looks for employees who are well versed in multiple, adjacent knowledge domains. Though competition for talent is fierce — particularly with larger enterprises — MSEs can differentiate themselves by focusing on the benefits of working for a smaller organization.

Executive relationships

MSE CEOs are looking to their CIOs to drive and enable digital business. CIOs must be able to rally the rest of the executives around a clearly defined, well-planned digital business ambition. With this in mind, CIOs should establish digital leadership to prevent disagreements about who is responsible for what parts of digital.

The CIO ranks behind the CFO, chief marketing officer, chief operations officer and chief sales officer in terms of close relationships with (proximity to) the CEO. However, CIOs can gain a more influential position by accepting business-outcome-focused performance metrics in their personal objectives. CIOs must be able to speak to the business outcomes of investments in the IT world and convey not how the technology works, but how it will work to advance the business.

For example, in the above example for Industrial Corp, the CIO would begin explaining that analytics and AI technology would enable reduction of time spent on client questions to the call center. CEOs rank technology as the second-highest business priority for 2018 and 2019, which means the CIO has a unique opportunity to step forward and become the steward for the company’s digital journey.