The CIO is Dead; Long Live the CIO
Since the initial advent of the CIO title, CIO’s have lamented their lack of a seat at the “big table” – that elusive peer relationship with the CEO, CFO, COO, and President. It is not a reporting relationship, but one of providing value to BUSINESS. In the overwhelming majority of organizations, this remains true even today. The reasons are many and complex, but there is one overriding aspect that is at the root of this situation.
Most CIOs are neither C level peers, or corporate officers, but CIOs-in-name-only; VPs or Directors of a single functional organization with an grossly inflated title.
Is this an unexpected epiphany? Do you feel denial? Anger? If you do, you are probably part of the problem, but one that you have the ability to remediate.
Neither aggression or depression should be the next step, as understanding this situation is a major milestone in resolving a more substantial role in the corporate hierarchy, and one that moves you beyond the role of a technologist.
The myriad reasons behind this situation are many and complex. Let’s start with the role of IT.
Where Value is Derived
The role of IT has historically been as a cost center, or a service delivery function; the business of IT. However, that mode of operation provides limited value to the business – you are a service, not a partner, peer, or leader advancing the business with the myriad of unique capabilities that IT can provide. If you don’t, the business will do it without you. The trend is inexorable; 2014 was the first year that corporate IT spending was greater than 50% OUTSIDE of IT, and outside IT’s control, with corralling and securing the rampant proliferation of data – typically an unfunded liability – performed by IT as an afterthought.
The history of Electronic Data Processing (EDP) for accounting, then Management Information Systems (MIS for management), then Information Systems (IS for everyone), then Information Technology (when proliferation of technology moved outside the data center) are all obsolete paradigms. To be of value to the business, IT must transcend this role and take on the prime role of something like business process automation with a prime directive of making the business cheaper, better and faster (the modern terms for old school quality, quantity, cost).
To do so, IT must change the dialog with the business. Every time I hear the terms “IT Strategy”, “IT Initiative”, “IT Project”, or “IT-Business Alignment”, I cringe. The red flags go up, as the signs of a dysfunctional IT organization have reared their ugly head. Repeat after me: “there are no such things; there is only business strategy, business initiatives, business projects” – all of which have an IT component that is geared around making the business cheaper, better, faster. IT alignment is a given, as IT’s sole role is to enable the business, and as such, 100% of IT’s efforts are in support of a business strategy and are part and parcel of the strategic planning process.
Business Leadership, Technology Roots and Consumerization
But few IT leaders are prepared for that reality. They grew up as technologists, often with a modicum of management moxie recognized at some point of their career. And to be fair, the world of IT is a world of high velocity change, with new technologies and their associated capabilities arriving daily. The “consumerization” of IT has also caused IT to be playing catch up with a more technically literate, early adopter user base, with renegade IT, and rogue data stores popping up all over. The user community has little regard from the complexities of IT’s management and security responsibility.
Even more important: most business executives have not seen – with few exceptions – any glimmer of business acumen from their IT leaders, so why invite them to the party? Yet in dozens of conversations I’ve had with CEOs, they long for an IT-literate business leader to be part of the team, that also brings this crazy world of IT into the advanced planning activity. And they are finding it outside of IT, in the CMO (another CxO in name only), which itself is a sorry state of affairs.
IT’s lack of business knowledge it is not about the business of any particular company, but about business in general. IT does not have to be the expert in their company’s business; that is what we have business leaders for. Conceptually, IT is IT is IT, regardless of the company, just with different implementations and tools. But understanding how business in general, operates, is essential for IT to learn to engage business operations effectively.
The other dichotomy of this situation is that, of all the organizations that exist within business today, IT is the ONLY one that has the full range of business functions, internal to their organization. Marketing (IT capability), sales (IT efforts), R&D (new technology and systems development), production (the IT “factory” aka data center), delivery (transition to production) and customer support (help desk), accounting (charge backs/budgets), and HR (IT specific skills management) are all functional activity within IT. They are, unlike any other department within a company, a microcosm of business as a whole, yet for some reason, are unable to be that IT-representing business leader at the big table.
IT is pervasive today, and even more so in the future. They span HR, finance, and the core business functions, and unlike HR and finance, which also span everything, IT in the enabler, the mechanism, the tools that can make/break a business, create competitive advantage and market differentiation.
What an opportunity – IT has the world at one’s feet, yet an opportunity most generally squandered.
IT Leadership Skills Gaps – Real or Perceived
Few in IT have the business acumen or the social skills to have that executive business presence required to interact with their C level business peers. Business suffers the consequences.
IT has a huge potential to provide market differentiation and competitive advantage, but not if IT remains a cost center or service delivery function, producing commodity services, and primed for outsourcing. If the business is not seeing any value creation from IT to the business, the option is to cut costs, typically by outsourcing IT, and further commoditizing what should have been a major source of business benefit and value creation. Optimized service delivery – a euphemism for creating a separate business unit disengaged with the core revenue creation – ends up realizing the business opportunity to reduce costs through the synergies gained in outsourcing IT, but loses the ability to create that market differentiation and competitive advantage. Outsourcing tackles “Cheaper”, but ignores “Better” and “faster”. Not that it isn’t appropriate to outsource much of current IT’s space, but make sure the outsourcing decision process is sound.
IT is the Mechanism of Cheaper, Better, Faster
Even fewer in non-IT executive roles recognize IT’s potential value or that IT leadership should ever be involved in the strategic as well as tactical day-to-day decisions. Like the proverbial sailboat – a hole in the water into which one throws money – they see IT and IT leadership as those people that we give lots of money to, but gain little in return, and nothing of value. IT is a necessary evil. The people they continually see in these CIOs-in-name-only roles, may be adept at running a service function, but they seldom sit their ego on the shelf long enough to recognize that IT is NOT the center of the universe.
Face reality: IT is NOT in the core business delivery process chain. IT is neither an input or an output to marketing, sales, R&D, production, delivery, or customer support. However, IT IS the mechanism behind virtually everything done today; IT provides the one great opportunity to enable business to make things cheaper, better, faster, and have the tools and opportunity to do so.
HR does not provide this capability, nor does finance, yet HR and Finance are seldom the target of cost reduction through outsourcing (although they should be!). An engaged IT organization, marketing the capabilities that IT can provide to business, can be a powerful force for change, for improvement, for that elusive market differentiation and competitive advantage that commoditized IT can NEVER deliver.
The maturity curve for IT organizations, is from the basic cost center, to service delivery, to business partner, business peer, and maybe someday, business leader. Optimized service delivery is the initial ante to get into the game, but is certainly not a winning strategy.
So what can be done?
The walls of the ivory tower must come down. Drain the moat, lower the drawbridge. Shelve the ego, and embrace the fact that IT can be the organization that can make or break the business, provide that competitive advantage and market differentiation, and become heroes in the process. Make it your mission to do everything in your power to enable business, ideally using IT expertise. Outwardly, eliminate IT as an adjective to anything – it is all about business, period. Get the business engaged with what you are building for them. Find out what they want, but also market what IT can do for them. Swallow your pride an embrace a major dose of humility; IT must recognize that they are not the center of the universe, but can provide the most effective transportation for the [business] driver, and done right, propel the business to new heights.
And if you don’t want to do this, but instead, stubbornly cling to your inflated CIO title and single functional organizational leadership, ask yourself, what is the role in IT that DOES sit at the big table, and helps direct the future of the business through technology-enabled business capabilities, because without some serious changes, it ain’t you? Your ego has created an impenetrable glass ceiling, commoditized IT, and impeded the business from ever realizing the wondrous capabilities that IT can bring to business process automation … to the detriment of both business and IT.
Read on grasshopper! In another post, I’ll explore methods of making the transformation of IT into a business leader, the history of the roles of IT, and how that history is an additional impediment, but for another time…..