COULD CIOS BE MORE IMPORTANT THAN CEOS WHEN IT COMES TO BUSINESS TRANSFORMATION?

By Charlie Mayes, Managing Director, DAV Management

According to analysts at Forrester, CIO’s are now viewed as the most important senior leaders in driving business transformation, with many believing them to have more input than a CEO.

In a recent report, Forrester highlighted the CIO’s key role in supporting business transformation, with technology being a primary enabler for change and playing a key part in breaking down barriers within an organisation’s structure. Their view was backed by a survey of respondents from the US and Europe involved in business transformation programmes within the last three years.  29 percent of survey respondents believed that the CIO was the most important figure in terms of supporting and driving business change. This was the highest amongst the C-suite, and more than that of the CEO, which was seen as most important by 24 percent of respondents, alongside the chief technology officer.

The role of the CIO has changed dramatically in the last decade. Technology now forms the backbone of most businesses, where it is a major enabler of change and a driver for sustainable competitive advantage. It’s no surprise, therefore, to discover that IT has become a key component of organisational planning and strategy. As such, today’s CIOs need well developed business and leadership skills, in addition to their more traditional technical abilities,in order to operate successfully at this level.

The magnitude and complexity of responsibility has also increased. Time was when the IT leadership was just about implementing technology and delivering projects to time and budget.  Clearly these things remain important but they are now hygiene factors.  What really matters for the new generation of CIOs is delivering value to the business, whether this comes from the way in which they support the day-to-day operations, ensuring that business and IT strategies are aligned or by helping to deliver IT-enabled business transformation.  Unfortunately, when it comes to the latter, findings contained in the Forrester report suggest that many CIOs still have some way to go.  The report identified four types of individual:

• Soldiers or Order-Takers – These CIO’s do not have the ear of the project leader in the way that other CIO’s often do. According to Forrester, they account for roughly 10% of CIOs and should, as a minimum, make sure that the business leaders are aware of the potential pitfalls of a project and highlight the most damaging mistakes to any allies with greater influence on a project.

• Leaders of IT – This group successfully balances IT and enterprise business needs and is capable of ensuring that the appropriate IT functions are involved in a transformation project, as well as providing a wider enterprise focus. Leaders of IT account for the majority of CIOs, approximately 70%.

• Change Consultants – According to Forrester, around one in 10 CIOs have extensive experience in advising and consulting on the business transformation process having been involved in projects in the past and are able to implement templates, best practices and learning from other companies.

• Transformation Leaders – This group is given or takes the responsibility (either hands on or as a sponsor) to lead the transformation themselves. They ensure effective resource application, funding and progress tracking, and report directly to the CEO. According to Forrester this CIO role is relatively uncommon and accounts for around 5-10% of CIOs.

Many CIOs are evolving into business leaders and are proactively encouraging business innovation. However, not all are moving in this direction. In our experience it is still very much dependent on the individual and the relationship that he or she has with the organisation.  Other factors such as culture, the agenda for change and the nature of the relationship with other leaders in the business, will also shape the role and responsibility of a CIO.  Inevitably, there are those CIOs that have a keen understanding of the business and approach technology from a business driven perspective, and there are those that are born and bred technologists.

So that leaves us with the original question – could CIOs be more important than CEOs when it comes to business transformation? They could indeed, but the variation of skills and approach in CIOs remains vast. Few CIOs today can be regarded as change consultants or transformation leaders according to Forrester’s definition. Many simply don’t yet have the experience of leading and driving large-scale technology enabled business change programmes to successful conclusions.  But I believe this is changing with CIOs increasingly maturing into true business leaders.  As they develop their skill sets, garner business experience in the wider organisation rather than just in IT and function more entrepreneurially (whilst retaining a ruthless focus on good business practice), then I think we’ll see a new breed of CIO that is well equipped to lead and deliver business transformation.