About a decade ago, when a collection of CIOs got together, it was misery time. They felt undervalued, overworked, under pressure and above all, frustrated. They felt they should be leading their organizations to new ways of doing business enabled by IT, but no one else would listen.
After all, in the eyes of many of their business peers, they were techies who should be kept in their box, making sure the technology was working-period. If it wasn't working, well, the popular thinking was, we should outsource as much as possible and maybe appoint a new CIO who knew his or her place and was a strong, hard-nosed manager. And if this replacement CIO wasn't always seeking corporate support for another IT standard, an infrastructure investment or a new strategic initiative, but would be quiet and invisible, even better! The more that CIOs of a decade ago shared their frustrations with each other, the more depressed they became. In fact, I once heard a CIO remark that he would prefer to be a divisional CEO again and gladly take a 50 percent cut in salary too. Even the media picked up on the occupational malaise, and in February 1990, BusinessWeek carried an article suggesting CIO means "Career Is Over."
No longer. A new CIO is here, according to a survey I have recently completed of almost 100 CIOs in the world's largest companies (sponsored by Egon Zehnder International), including the BBC, The Gillette Co., Smith Kline Beecham and Time Warner Inc. This new CIO is unrecognizable in terms of role, status, expectations, capabilities and confidence when compared with the bleak picture of 10 years ago. For starters, more than 70 percent of respondent CIOs report that they are now on their company's main board or executive committee. They often take part in strategic meetings and generally are expected to make contributions on business as well as technology issues. Another significant trend the survey revealed is that 59 percent of CIOs report to the CEO or COO, with only 22 percent following the more traditional reporting line to the CFO.
In other words, the role of CIO, far from being on the decline as some writers predicted a few years ago, is ascending. Indeed, in some senses, the role that CIOs have aspired to and demanded for years has finally materialized. Can they make the most of the opportunity? They'll need a deeper skill set covering a wider range of perspectives on their organization if they want to continue advancing the CIO's standing within their organizations.
FOUR KEY ORIENTATIONS So what does the modern CIO do and where is he or she going next? My analysis of CIOs' activities suggests that the position remains first and foremost that of a technology policy-maker, masterminding and overseeing technology choices, new technology adoption, corporate IT standards and information management policies and procedures. Furthermore the CIO is a functional leader, the senior executive presiding over what is still a large function in many corporations and in particular orchestrating continuous change in the skills and organization of IT departments.
Today's CIO also remains a systems strategist, ultimately responsible for planning the applications development portfolio and promoting new initiatives to exploit technology in changing the way we do business. He or she also still has to focus on IT delivery, ensuring top-notch operational performance every day. As one survey respondent said, "If I don't deliver the mail, then I won't be able to effect change."
But two further roles are being demanded of, and fulfilled by, the modern CIO.
He or she has become a change master, often leading projects and certainly being considered by the CEO as an executive whose responsibilities include change management. Some even have the term in their title, such as director of IT and process change, and as one of these CIOs put it, "I'm in the business of change." Another observed that wherever change programs were being implemented, IT was heavily involved. Second, at forward-thinking organizations, the CIO increasingly is a business strategist, participating in discussions and activities that determine where the business will go in the future and how it will compete. CIOs are leading experiments and new ventures in e-commerce, they are being asked to spot and buy relevant Internet startups, and some have formal business strategy responsibilities.
The CIO was always a technologist, responsible for infrastructure planning and technology policies. And in the last decade, where business has become ever more dependent on IT, the CIO survived only if she or he was fireproof on delivery and service. But now CIOs are expected to be able to both craft relevant IS strategies and contribute to business strategy-making. And increasingly they are charged with leading business change projects, not to mention transforming their own function. They need to bear in mind each of these responsibilities and how they interact.
CIOs are upbeat about their position and bullish about the corporate context they have to work in. Respondents report that board or executive committee support for IT has increased over the last five years, and they believe it will continue to grow. The same is true for involvement of the board or executive committee in IT matters. CIOs surveyed report that their corporations have willingly adopted corporatewide standards, policies and application projects, and they sense that this trend will continue for some years.
THE CIO SKILL SET To be equipped to cope with the demands outlined above, respondent CIOs believe three skill sets are vital: business know-how, technological confidence and behavioral skills-the last needing to be of an especially high order. For example, CIOs stress managing and facilitating change, personal communication skills, leadership, teamwork, and influencing peers and executive teams. In other words, the strategy and change orientations require much deeper and broader soft skills than ever before.
That array of required skills may not be surprising, but what is noteworthy is how respondents rated different types of career experience as a development path for an effective CIO. Clearly they all valued substantive experience in the IT function-to develop both technological know-how and an understanding of how to manage a specialist function. Those who had held the position of CIO before deemed this even more valuable than did CIOs with other backgrounds. A striking finding, however, given the business strategist and change agent roles now demanded of the CIO, is that those who also had been a senior executive outside IT, or had run a business or business unit as CEO, rated such experiences the most useful of all. They said that running a business gave them perspective on what appropriate IT solutions look like and gave them judgment on when to push hard for change and when to relax.
THE FUTURE CIO? The survey collected a host of other data, but the last question asked respondents their opinions on how the CIO's job would evolve over the next five years: Is the position becoming so demanding and challenging that no one person can cope, or will individual CIOs continue to respond to the rising expectations of their corporations? Opinions divided almost equally.
One favored scenario featured a single CIO responsible for technology policy-making, business and IS strategy-making, running a reliable infrastructure and daily operations and leading or facilitating change. The other favored scenario created two different positions. One is the CIO responsible for strategy matters, business change and managing information as a resource. This last domain is a recognition of the increasing importance of knowledge management and of the value of content in e-commerce. The second position is that of a CTO responsible for technology policy and IT operations (and perhaps technology forecasting).
The dual model is emerging in some corporations, often where the agendas are very wide or where no one ideal executive can be found who matches the new specification for the CIO. By contrast, the single model may avoid problems of ambiguity, conflicts and power-games. It is also the sort of position many industry watchers have called for for several years and the one to which would-be CIOs most likely aspire. It certainly is a big job and explains why salaries of top CIOs are commensurate in size to both the increased scope of the job and its consequent business risks. I find more and more top executives freely observing that the CIO has the most important job in the corporation, and some go on to say, "and they can be paid whatever they demand." Can there be a better market test of how far the role of CIO has come?
Michael J. Earl is professor of information management at London Business School in England. He can be reached at firstname.lastname@example.org.