The New New CIO Role: Big Changes Ahead

CIOs know all about change management--from jettisoning legacy apps, to prodding line of business VPs to share virtualized resources.

But today, CIOs themselves are in the midst of a make-or-break personal change-management project: CIOs who can only take orders, who can't speak the language of the business, who can't step out of the proverbial back-office and into the front lines of customer service, social media or supply chain management will soon go the way of ancient tech gear--remembered fondly on occasion but sidelined in the future.

Simply put, there is no future for the "order-taking, looking only for efficiencies" type of CIO: Change or be ousted. "Do not expect IT value from a CIO with an operational profile," proclaims a 2010 KPMG report. Chris Potts, an IT strategist and author of FruITion, says "the big game in town now has moved on from efficiency--although that is still important--to how everybody exploits IT to create value and what that does for a company's investment plans and the changes that [the company] makes."

CIOs are not oblivious to their decades-long struggle: They know they need to be more "strategic." And they're certainly sick of hearing about "business-IT alignment." Has there ever been another department so ruthlessly grilled about the value it is (or is not) delivering?

But facts are facts. Those perceptions of the CIO who doesn't get the business big picture still linger today.

The CIO extreme makeover necessitated right now isn't a mere cosmetic rehab, however. It will demand a mighty effort from those IT leaders whose comfort zone involves four walls, lots of servers and voluminous air-conditioning.

In fact, say CIOs and IT strategists interviewed for this article, a CIO who wants to transform must concentrate effort in four key areas. We'll call them the "4 P's": Perception, Profile, Participation and Performance. Each is critical to understand, analyze and explore. Those CIOs who've nailed the "New New CIO" role--and all four of the "P's"--say the job demands much, but can be unlike any other out there.

"The CIO role is a very exciting role to play in when you don't think about it as an all-technology role, but when you think about it as a business leader role," says Wayne Shurts, CIO of grocery giant SuperValu. "You're a part of the strategic leadership team; you're on the inside of all the issues to help the company win today, tomorrow and the next decade."

Do You Really Want to Be CIO?

First things first: Who'd actually want to be a CIO now? The question might sound flip. Naive, even. But consider how companies have traditionally thought of the CIO role and those people given the assignment: Men and women who knew how to keep the trains running on time and lights on. Grown-ups who knew their servers and storage, but were prone to techno-babble once called to The Big Conference Room. Strategists? Hardly. Business leaders? Yeah, right.

For that matter, just what is a Chief Information Officer actually supposed to do? Unlike, say, the CFO title, "CIO" has been a nebulous moniker for many business execs from the get-go. The title is "very diffused," says Abbie Lundberg, the former editor of CIO magazine, now a consultant working with CIOs on strategy and executive communication skills. "It has tons of potential and can mean different things in different companies, depending on what their goals are."

It's no surprise, then, that Tom Davenport, Babson College's Distinguished Professor of Management and IT, says this: "I hardly get anybody ever who wants to be a CIO, which is probably indicative of something. And if they do want to be a CIO, it's like: 'Fine, it'd be useful to rotate through this for a while on my path toward CEO.' I think people respect technology, but there aren't that many people anymore who want to be career CIOs."

Why? "It's just not the center of the action anymore, in terms of technology," Davenport says.

As strange as Davenport's last statement may sound (read it again), one can easily make the case that IT leaders face unprecedented challenges today. First up, there's the "C" word: Complexity. According to the annual IBM (IBM) survey of CEOs, 80% of CEOs are worried about growing complexity in their businesses (of which IT is a big concern) and more than half of them admit that they are ill-equipped to deal with it.

Then there's the New Normal economic climate laden with instability; and a push for ever greater business efficiency and "do more with less" mantra. Finally, there's the advent of cloud computing, social media and mobile devices that have greatly empowered workforces everywhere.

"The whole consumerization movement is really tough on CIOs," says Davenport, "since now, for probably the first time in history, people have more powerful technologies at home and in their pockets than those that are provided by IT. I also think IT is more perceived as a barrier to getting things done now more than it ever was." One stark example: Articles in The Wall Street Journal and Forbes openly encourage execs to bypass IT for their sales, CRM, marketing and business intelligence applications.

Where does that leave the appointed leader of corporate technology strategy?

SuperValu's (SVU) Shurts, for one, doesn't view the "going around IT" managerial initiative on tech purchases as a bad thing, necessarily. "The key is having an IT department that is relevant, proactive and helpful. Because where I've seen business units getting their own technology and implementing it, for some of that, IT has to look itself in the mirror, because IT probably has been slow to act, been not too easy to do business with. That has probably lead the businesses to say: 'I have to go do something, because the world's getting by me.'"

In short, he says, "We, as IT, need to get on the front foot, because we've been on the back foot."

If you're ready to move to the front and change into a strategic executive, dive into the four areas where you must concentrate.

We all know that perception does not always equal reality. But most any CIO's transition from "order taker" to "strategic player" is going to be that much tougher if he and his IT staffers are perceived mostly as geeks who manage the help desk, PC passwords and data centers.

Here's the rub: Before CIOs even start talking about being more strategic, they first have to nail the IT basics. No one is arguing that the bread-and-butter IT deliverables are going away. It almost goes without saying these days. Almost.

Ken Harris, CIO of nutritional product maker Shaklee who also had senior IT roles at the Gap (GPS), Nike (NKE) and PepsiCo (PEP), says that the elevated, strategic CIO position today is "a mix of two dramatically different roles." One part is composed of the operational requirements: keeping systems, applications and data centers up; having security and disaster recovery covered; and ensuring subsecond response times on queries, just to name a couple, Harris says. "That is absolutely critical to be done," he says, "but by itself, it's not a sufficient condition for success."

If the perception is that IT can't even keep the trains running on time, then there's no way that CIO will ever be considered a business leader by peers. Perhaps just as critically, CIOs also have to maintain the respect of the IT department while in pursuit of the brass ring from Mahogany Row. Which is no small feat.

Yet even if a CIO does master operations, that doesn't mean a CIO will suddenly be seated next to the CEO in the boardroom. That comes from the second role that a CIO has to play today. Harris calls it the "change agent" role--"finding ways to enable the strategic opportunities within the company." (More on this later.)

To Monte Ford, the CIO of American Airlines, the status of the CIO is related to what he calls the "earned political capital" of the IT leader. In his mind, there are those IT chiefs who work in systems development roles, and that's what they are known for, more or less; and then there are CIOs, he says, whose roles are "integrated into the fabric of the business."

"That's as much a function of the person as it is the view of the senior leadership of the organization--not just the CEO, in particular, but the rest of senior leadership team," Ford says. He contends that some CIOs subjugate themselves to a lesser standing among peers--they let the role define them rather than them defining the role. "A big part of this is how you treat yourself, as well as how you allow others to treat you," Ford says.

So what does that look like? Says Ford: "If the company has some strict financial goals and objectives, and you're ahead of everybody trying to help not only your group but everyone else to fulfill their goals and objectives unsolicited, then you will be viewed differently than if the CFO is chasing you around about 'Can you get your expenses down by 1%,' and you're fighting him on it."

When it comes to the perception of IT's strategic worth these days, CIOs will continue to have to overcome plenty of skepticism. Ford's appearance on Fortune's 2010 "Smartest People in Tech" list was gratifying to him. Yet he was the only CIO who made it.

A decade ago, it was easy to tell the type of profile a CIO had within a given company: Was the CIO listed among other execs on the "Senior Management" page on the corporate website? Though it's rare not to see the CIO's photo on that webpage today, it doesn't mean that the CIO's stature among peers is that elevated. Or secure.

One reason CIOs have struggled: CEOs require that their CIOs should innately be both operationally and strategically sound, Shaklee's Harris points out. That combined skillset is highly sought-after yet not easy to come by.

In a June blog post, Patrick Gray, the president of IT consulting firm Prevoyance Group, writes that the CIO role continues "to suffer from a multiple personality disorder of sorts." At one moment, Gray says, CIOs must understand and capably discuss the strategic direction of their company and, seconds later, consider a complex technical problem with costly ramifications.

"Some CIO job advertisements laughably demonstrate this dual role, in the same sentence asking for a 'strategic partner' and 'extensive Cobol knowledge,'" Gray writes. "It is as if the CFO was called on to make journal entries after discussing the latest M&A activity, or the COO running down to the shop floor to spend a few hours on the drill press after pondering a complex rethink of the global supply chain."

CEOs want what they want, of course. And if they want a CIO who can discuss brand positioning and blade servers in the same breath, then so be it. "I think most CXOs have a vision of what a change agent can do, but there's a lot of them who don't really know how to help make that happen or find the right person to make that happen," Harris says. "That's one of the big challenges that CIOs face: To try to educate the executive committee, CEO and CXOs on how a CIO truly becomes successful and becomes that person that they want the CIO to be: that change agent. By and large, CIOs won't get there by themselves."

Lundberg concurs with Harris's assertion. "Part of it is: Does the CIO have the right combination of skills, mindset and abilities?" she says. "And part of it is: Is the rest of the organization there as well?"

According to Lundberg, there are many leading companies that are knowledgeable of and adept at using technology to the fullest. Inside those companies, CIOs can flourish. "But at the majority of companies--even the ones with executives who understand that this is the future and where value will come from--they don't have all the pieces in place yet to do that well," she says.

Of course, there's been a limitless amount of discussion around CIO reporting relationships--as in, can a CIO be a strategic leader if she doesn't report to the CEO, but into, say, the CFO? Some CIOs are steadfast in that to be truly strategic they have to report into the CEO. Others, such as SuperValu's Shurts, disagree. "Reporting to the CEO helps, but it's not required," he says.

At his previous job, Shurts reported to the CFO at Cadbury. "But I stayed relevant to the business," he says. How? "It comes from approach: Do I approach my job from an information and technology approach? Or from a business approach? To me, that makes all difference." (At SuperValu, Shurts reports into CEO Craig Herkert.)

The IT agenda, Shurts says, must flow from business strategy and need. "I'm going to be spending a lot of time with the head of marketing, CFO, the head of supply chain, and the CEO and all their direct reports working through issues and figuring out what role IT role plays in helping delivering it," he says. "The role of a CIO today and tomorrow is always going to begin from the business and then work back into the technology issues."

When interviewed in July, SuperValu's Shurts had not been on the job for long, having taken the reins in late April. When asked what "boardroom expectations" had been placed on him, he replied that "it's probably fuzzier than most jobs, I'll give you that." But that lack of clarity (at that point in his tenure) didn't bother him in the least. He was taking initiative to set the overall expectations--for his department and for himself.

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