Overcoming IT Gravity

Why do CIOs not become CEOs? What prevents them from achieving at the highest organizational levels?

It's because they don't have their hands on revenue, unlike CMOs, CFOs, brand marketers, and strategists.

But now we are entering an era where CIOs must manage two agendas: 1) the internal systems (IT), and 2) the systems, processes, and technologies to win, serve, and retain customers, what we call business technology (BT). As shown, CIOs should be guiding their companies along a path to high IT and high BT -- the place where technology will truly move revenue and profit.

Is it happening now? At the Wall Street Journal CIO Network event, I asked attendees if they were involved with serving customers and building BT agendas -- most of the hands in the room went up. I thought: "Wow...a pretty advanced group." But at the end of the conference the CIOs presented their collective priorities. The word "customer" was nowhere to be seen. The list was a litany of traditional IT agenda items -- from training to H1B visas to creating more of a "business vision," whatever that is.

Why aren't CIOs stepping up? The gravitational pull of IT suppresses BT -- stalling companies in the lower right quadrant. These forces include: 1) Timid leadership. Many CIOs are comfortable with the control, costs, and security of IT and won't stretch. 2) Culture. Companies still see the CIO and staff as back-office players. 3) Crisis du jour. Perennial IT fire drills (...the data center is aging!) divert attention away from customers and back to internal problems. 4) Cyber-security. The newest excuse for CIOs who want to hunker down in their familiar cocoon. 5) Skills. Technology management is often staffed with techies who don't know or want to know about customers.

How do you overcome IT gravity? The more-brilliant-than-me Forrester analysts have issued a lot of research on exactly that topic -- the best place to start would be this playbook. But here are a few starting points... 1) Parse out the tech management budget between IT expenditure and BT expenditure. If it's not in the 75/25 range, you've got gravity problems. 2) At CIO staff meetings, carve out 15% of time to discuss how and if tech is directly improving your company's customer experience. and 3) The CIO and CMO should have bi-monthly get togethers -- this relationship is found in almost every high-functioning customer-obsessed organization I've visited over the last six months. These recommendations won't get you totally clear of IT's gravity, but they will get you off the launch pad.

Comments

Who's holding these CIOs accountable

To add fuel to the fire: Who is challenging CIOs to deliver new sources of customer value; to deliver on the BT agenda? CEOs need to be held accountable - they get the CIOs they deserve. It's high time boards held CEOs accountable for their firm's ability to use business technology to win, serve and retain customers. Then we'll see a big shift in the CIO's focus. But CIOs still won't get to be CEO without P&L experience - too few CIOs have experience of business outside of technology management, yet it is consistently one of the experience attributes we see in very successful CIOs.

Nigel, I agree blame for this

Nigel,

I agree blame for this lies with the Board/CEO. The CIO needs to be treated like a true business executive and held accountable for business goals. Moreover, it's up to the CEO/Board to employ the right kind of CIO: a technologist capable of navigating the disruptive technologies appearing ever-faster, AND a business executive who understands markets, customers, competitors and thinks in terms of winning share and driving profits.

I suggest CEOs/Boards get the CIO they settle for, rather than deserve.

Once the right CIO is on the team (and must I say, reporting to the CEO?), how does the Board oversee technology opportunities and risks? Does the Board even have IT-savvy members?

Yes, gravity pulls CIOs down. It's up to the Board to be sure the right CIO is in place and given the chance to obtain enough lift to soar.

Can the data economy provide CIOs P&L experience?

Could data services become a path to power for the CIO? In the new world data is a valuable asset and companies are increasingly exploring opportunities to monetize it. CIOs currently coordinate the governance and management of the data. Will they step up to building a business around it? Only if they are willing to move outside of their IT comfort zone, and worked closely with their C-suite counterparts. While they might not become a full fledged product/services team, developing and launching data services would be a step in the right direction along the evolutionary path George describes.

Try this Playbook too

Customer Centricity

Good post George, and you're right that it's very easy for most CIO's to stay internally focused. Nigel has a good point as well that CEO's need to hold their Tech leaders accountable for their level of customer engagement.

There's also a more general cultural expectation that CIO's should stay focused on all of the internal issues. I'm a CIO and spend about 85% of my time on customer-focused work, with great support from my boss the CEO. Even still, though, I sometimes hear from the Sales, Marketing, or Product Management teams that they are surprised that I am meeting with customers or worrying about new product features.

CIO's need to up their game, no doubt about that. But they also need good partnerships with colleagues in the more traditionally client-facing groups. I think there's a shared accountability here that many organizations are simply not addressing.

It's all about reporting structure

For many years I attended several of the BIG CIO conferences, Forbes, Fortune, dare I say Gartner and I quit going because I thought they were a waste of time. I always took an informal survey of how many attendees reported to their respective CEO. The stats were depressing, very few were true officers and very few reported to the CEO. So George, I suspect that's why you got the answers you got from the WSJ event. If you were to ask the same question of CIO who report directly to the CEO, I suspect you would get entirely different answers. I've had the good fortune to reorganize several IT organizations so the CIO reported to the CEO. That makes all the difference. When a CIO reports to the CEO your list of things (gravity) are priorities for the staff in charge of each. As the CIO, when I attend the Office of the Chair staff meetings, I'm there to contribute to the collective discussions on IT priority. There is no distinction between IT and BT, it's the company's money and the officers have to decide how to allocate that finite resource.

IT gravity is a smoke screen and does not exist where the CIO reports to the CEO and is an equal partner with the other officers. It really isn't that difficult. For the twenty years I spent reorganizing IT for clients, I began every CEO meeting with a statement that re-engineering IT is child's play, the real work will be changing the way the business justifies and uses the IT resources.

Most of the blogs and other articles like this should add the word,, "many" or "Some". Many and some CIO's are better informed business executives than some of their peers

CIOs Should Eat Their Own Dog Food!

Many CIOs I know have never ever tried using the software developed by their teams meant for use by customers in self-service mode e.g. Online Banking. On the other hand, the way a typical company is structured, there's no natural forum for CIOs to meet with customers. So, we're where we are. I wish I could prescribe a solution for these issues but CIOs could begin by test driving their customer-facing software in order to improve their UX. This might change the CMO / CRO perception of their CIO and drive them to think up of occasions where their CIO could interact with customers. While this is not applicable universally, there are cultures in which tech has a halo and the entire IT organization basks on the glory of technology and looks down upon sales and other commercial functions. To defy IT gravity, CIOs should break this halo and orient themselves and their team members to appreciate the challenges of revenue earning functions of a company.

IT and BT Initiatives

Excellent blog and great insights into the evolving role (or what should be?!) of the CIO and the broader category of IT service delivery. I believe that there have always been two camps. The first believes that IT is a necessary evil. An organization that delivers a utility (of sorts), but which, when business is on hard times, tends to be looked at as a vehicle to "cut costs" (i.e., by reducing the unit cost of the utility). The second camp believes IT is a necessary good. And by that I mean that IT provides intrinsic value to the company and that without it, the company cannot be a healthy, growing, entity. The issue with the concept of BT is that most IT organizations are of the former, rather than the latter camp. So to introduce the concept of BT to these types of companies is very foreign and maybe even threatening to some LoB's who are in a constant power struggle for $ resources and mind-share within the company. Not until top executives begin to realize the importance of IT's (and the CIO's) role as a business enabler and innovator rather than just as a business supporter, will they be able to incorporate the concepts of BT into their organizational psychies.