Posts Tagged ‘IT leadership’


Corporate boards are more concerned than ever about technology and its effects on the company.

They hear the horror stories of millions of dollars sunk into technology projects that fail to meet their goals.  They see how one dissatisfied customer can use technology-enabled social media to ignite public outrage against a company. boardroom

They read about website failures during critical times and understand the potential for both short-term and long-term consequences.  They may have even themselves endured fallout from a computer virus.  They see the adverse effect a cyber-attack can have on a company in terms of bad press, lost revenue, legal woes, and erosion of customer trust.  They hear of companies failing because of inadequate preparation for continuation when a disaster occurred.

They fear rival companies gaining a competitive advantage through some technological investment.  They see whole industries disrupted as a result of new technologies.  They know of companies no longer in existence because they failed to react to technological changes.

And they see – and feel – that the pace of technological change and its effect on business is rapidly increasing.

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There has never been a stronger need for a solid relationship between the CEO and CIO.  Rapid technology advances are causing changes in societal behavior which in turn are having a profound effect on business.  Social and mobile technologies have given new power to the customer to compare products, solicit/discover third-party product recommendations, publicly voice their support or displeasure, and buy from anywhere.  This has ushered in the ‘Age of the Customer’ which Forrester defines as a “20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers” (Technology Management in the Age of the Customer). Connecting

Technology is also enabling disruption of entire industries.  Think about the effect, for example, that Amazon has had on retail brick & mortar booksellers.  In fact, an IBM study found that 41% of CEOs expect increased competition from companies outside their industry in the near future (The Customer Activated Enterprise).  They also recognize that companies within their industry are using big data/analytics to improve their decision-making and more precisely target customers.  CEOs are placing a priority on shaking up the status quo in their organization.  There is a sense of urgency and a push for innovation, and technology is obviously a major part of the solution.

But in too many companies, there is a disconnect between the CEO and the CIO.  Jim Stikeleather writes in a Harvard Business Review blog about a research study on the changing role of the CIO and IT (The IT Conversation We Should Be Having).  In short, the study found that CEOs believe that CIOs are not in sync with the new issues CEOs are facing.  In addition, CEOs feel that CIOs do not understand where the business needs to go and do not have a strategy truly supportive of the business.  More specifically, almost half of CEOs feel IT should be a commodity service purchased as needed and do not feel that their CIO understands the business nor how to apply IT in new ways to the business.  Moreover, a KPMG survey found that only 5% of executives feel that their business and IT strategies are 100% aligned (Executives See Disconnect Between Strategy and Technology Within Their Organizations).  Given this, is there any wonder at the call for the elimination of the Chief Information Officer position and/or the addition of other C-level positions like the Chief Innovation Officer, Chief Data Officer, or Chief Digital Officer? (Will CDO Steal CIO’s Leadership Role?)  Yet I can’t help but feel that the major issue here is that too many CIOs have not truly gotten involved in the business and have not worked to develop a solid relationship with the CEO and other C-suite executives.

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The CIO may historically have had no stronger ally in the C-suite than the COO.  The focus of both roles has typically been on improving operational efficiency and reducing costs.  A large percentage of IT projects supported these twin objectives and may have ultimately been under the oversight of the COO.  It is interesting that many COOs express that they face an issue of visibility.  When everything is running smoothly, they rarely receive the credit they truly deserve.  Yet when things go wrong, they can appear to be in the crosshairs.  That is very much akin to an issue the CIO faces in keeping the lights on.high-five_business_partners

Today’s COO faces increasing demand and complexity.   Perhaps more than ever before, companies are realizing that although cost minimization and efficiency are very important, they must be careful not to adversely impact functions that customers value or that are needed to achieve strategic goals.  As such, the COO is being called upon to strike the balance between efficiency and flexibility.  Change has become more of a constant, and the COO is assuming a major role in the business transformation necessary to achieve the strategic agenda.  Again, isn’t it easy to see the commonality with what the CIO is being asked to do?

CIOs have seen so much synergy in the roles that they envision the COO position as their next step up the corporate ladder (Forbes’ Beyond CIO series).  But even with all this in common, COOs view their relationship with the CIO as one of their least successful among other executives.  In fact, just 32% of COOs consider their relationship with the CIO to be very strong (The DNA of the COO by Ernst & Young).  

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From a distance, one might expect the relationship between CFO and CIO to always be strong.  After all, aren’t there a number of similarities?  Numbers are at the core of both career fields, and both are driven by logic, rules, and standards.  Analysis and problem-solving skills are highly valued, and the quality of results is important.  Coming up through the ranks of Finance and IT typically required significant time spent alone at one’s desk, which may contribute to the attraction of these professions to many tending toward introversion. 

There is no doubt of the importance of the CFO-CIO relationship.  A Deloitte CFO Signals survey states that “45 percent of CFOs surveyed had IT as a direct report, and about 25 percent more as a dotted line report.”  A Gartner study conducted for the Financial Executives Research Foundation found that CFOs have increased their role in technology decision making and that the CIO most often reports to the CFO.

Yet despite the similarities and the importance, there are major issues in the CFO-CIO relationship.  CFOs have long been frustrated by an inability to get a “single version of the truth” from the data in many companies (The Customer-Activated Enterprise).  This frustration is exacerbated with the mandate to accelerate the company’s performance while increasing transparency.  In fact, Deloitte reports that only a little over half the CFOs in one survey felt that they have the information they need to effectively manage the business. Another study by Gartner and Financial Executives International cites that only 25% of CFOs surveyed were confident that their CIO and IT department had “the organizational and technical flexibility to respond to changing business priorities” or are “able to deliver against the enterprise/business unit strategy.”  The study also noted that only 18 % of the CFOs surveyed believe that their “IT service levels meet or exceed business expectations.” In addition, only 1 out of 4 CFOs saw their CIO as a key player in developing and implementing business strategy.

So what actions can the CIO take to improve his relationship with the CFO?  Here are some practical suggestions:

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Perhaps no C-suite relationship today is more broken than the relationship between the CMO and CIO.  In the past, there has been little need to collaborate.  Far too often the CIO functioned as a technologist who was not recognized for having a complete view of the overall business.  He concentrated more on cost cutting and efficiency.  On the other hand, the CMO was about direct mail, magazine advertisements, and television spots.  He was aimed primarily toward branding, lead generation, and communication.cmo-cio-best-friends1  They were almost like two ships passing in the night.  Neither had a tremendous need to interact with the other.  Each was relegated to (or chose to remain in) his own realm.  In some ways, there have been a number of similarities between the two positions.  It was quite normal for neither of them to actually sit on the executive team.  Corporate strategies were often determined without their input.  Just as the CIO struggled to explain the return on infrastructure investments, the CMO had difficulty proving the value of investment in various marketing programs.  It should not be surprising to learn that both the CIO and CMO have struggled in developing relationships with the rest of the C-suite (Outside Looking In:  The CMO Struggles to get in sync with the C-suite and The DNA of the CIO).

But as a result of societal, business, and competitive changes driven primarily by big data, analytics, cloud, social, and mobile technologies, the pressure is on both the CMO and CIO to transform themselves, their departments, and their relationships with other executives in order to ensure the success of their companies.  They need to markedly increase the collaboration between them.  Both need to move from their functional silos into becoming recognized leaders within the broader business context.  This will take a concerted effort – and for the benefit of the company, it needs to be done quickly.

Here are some suggestions for the CIO to improve his relationship with the CMO:

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