Whatever the company or industry, sooner or later, we all deal with the various issues that challenge a CIO and IT department to become more effective as well as deliver increased value to the business. The classic case is of a company that might be going through a tremendous change—say, a major merger or acquisition. And, of course, with this major change comes new challenges for the IT department.
For example, how will the CIO ensure the transition goes smoothly? He has to develop a laser-like focus on aligning processes such as compliance and governance as well as systems and infrastructure to support the business needs. He must give priority to the hardcore technical skills that will be required to fully marry two organizations that may be vastly different. After all, he must ensure that two IT organizations can work seamlessly as one. And to do it, the CIO must make serious cuts to the budgets, while still maintaining service levels.
But then, what typically happens? Now that the CIO has done his job—probably even a stellar job at getting everything integrated and running—the company must again shift focus. Now they must concentrate on operational efficiencies and reducing the budget. They have to start thinking about how the new organization will define its business goals, gain synergy and get its products to a larger base of customers and, ultimately, increase revenues.
Call it that classic point in a company when the business cycle has yet again changed. This is usually the point when the company decides they must change CIOs, too.
This scenario hasn’t only defined IT departments for decades, but CIOs themselves. And no wonder. When it comes to an organization’s information technology needs, company leaders want to know the technology expert running the show can deliver on specific goals. So historically, the quest to find “niche” CIOs has certainly served companies well. It does make sense to hire a CIO whose expertise is in risk compliance and other regulatory issues if that’s indeed what the company needs. If the company wants to save money, it does make sense to hire a CIO who knows how to deal with the bottom line and effectively reduce costs.
As a result, CIOs historically have adapted to this culture within IT that demands core competencies and highly honed skills that can be harnessed at exactly the time business cycles demand them. So, CIOs have largely been “specialized” within their field. They know exactly what they can deliver, and they know they can do it well. Of course, this also means that when the business cycle changes, a new CIO with a different set of highly honed skills will be needed. Is it any surprise, then, that the average tenure of a CIO over the last few decades has been three years—or less? This might sound like an awfully short time to professionals in other fields, but for CIOs, it just comes with the territory.
But what if it didn’t have to be that way? What if one CIO really could deal with all those various issues that come and go? What if it mattered to CEOs that the people running their IT initiatives really did know—and care—about the long-term goals of the company?
The Tide Is Turning
Evidence in just the last couple of years suggests that the tide might be turning in that direction. According to Gartner, the average tenure for a CIO a decade ago was two to three years. Now the average tenure is about 4.5 years. That may not seem like a significant bump, but couple that with the changing perception among CEOs that all company leaders should be attuned to all aspects of the business, and it’s become somewhat easier for the industry to warm up to the fact that CIOs no longer exist in a vacuum. CIOs and their IT teams can—and should—be able to do more than just fix something when it breaks.
Here’s another telling finding from Gartner: Three out of four CIOs still come to the job with a hardcore technical background. But this also means that one out of every four doesn’t. What is their expertise instead? They’re bringing with them solid backgrounds in business. They can speak in business terms. Whatever the business vertical, they’re versed in not only the lingo, but the actual processes, too. For a CIO working at a natural gas company, for example, this means she probably truly does understand upstream exploration.
This is extremely good news for any CIO who longs to step out of the traditional IT box that has placed rigid definitions on both low-level workers and the highest-level leaders in the past. It also means that another type of CIO—the one who can bring both technical and business-oriented skills to the table—will likely be in more demand as industry perceptions and expectations continue to change.
And yet this ongoing change isn’t just because company leaders all of a sudden became “enlightened” when it comes to what a CIO’s role should be. These changing perceptions of IT’s role, it turns out, actually make good business sense, since IT looks little like it did even 10 years ago.
CEOs, now more than ever, are starting to realize the processes and innovations that a CIO can bring to the table can help grow the company—and revenues. Therefore, CEOs also realize they may not be using a CIO to his or her highest potential if they aren’t expecting a higher level of performance. So, while a CIO’s technical skills are important, those skills are no longer the only things that are important. In fact, the initial conversation may no longer even be about a CIO’s technical skills at all—and that’s a good thing. First and foremost, a CEO wants to know that the CIO will be able to deliver business value. The CEO will expect that IT deliverables will constantly be contributing to the overall growth of the company. And they will want a CIO who knows every aspect of the business at least as well as any kind of technical function. In the past, I’ve worked with a financial services company that believes they’re a technology company just as much as they’re a mortgage company, and they had a CIO who came from the marketing department and before that was the head of HR.
And speaking of technical skills, that conversation between a CEO and CIO will change, too. Business analytics, which has exploded on the scene, is a good example of much of where the new CIO’s technical focus will be placed. In the past, companies would sit on an ever-growing warehouse of data and generate reports looking at historical performance, but never had concrete ways of using that data to push business forward. With this new concentration on business analytics, a CIO will start to look at this data in more innovative ways. The CIO will be able to take that data and turn it into actionable business solutions, gaining meaningful insight along the way into important company elements such as customers and supply chains in order to model predictions of what will happen in the future and make even better informed business decisions.
Of course, what all this means for the CIO is that the work he or she does could ultimately become more meaningful—and ultimately, more satisfying. Leaders are starting to see a CIO’s value as going way beyond that of the “fix it” person. The culture is opening up. CIOs will not only be expected, but encouraged, to be involved in the actual business of the company. They will be expected to have a say in the future of the organization. And they will be expected to deliver long-term solutions that contribute to the overall health of the company.
This is definitely an exciting time in IT, and the changing role of the CIO is one of the major reasons. In the narrowly defined roles of the past, CIOs had to make tough decisions on how they were going to execute specific tasks. With the more open culture, their careers will have a chance to thrive with a company, giving them longevity and making them infinitely more valuable than ever before.