CIOs and their route to ‘executive mastery’

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What we all share among BIM students is a passion for technology, and the belief that digital transformation is THE leverage for companies to gain a strategic advantage and win over competitors. Most of us plan to bring new ideas and tools into big organization and lead the change that will make them more data-driven or tech-focused. Some of us hope to become CIOs in the future, and manage the IT projects of a company. Then, for those who may be interested to enlarge their career scope and wish to become CEOs: is there any correlation between CIOs and CEOs?

Unfortunately, a recent article from Financial Times (listed in the references) points out that “despite the need for technological know-how at the top of organisations, there is no great trend of chief information officers becoming chief executives”. Truth is that many Chief Information Officers do not even aspire to become CEOs. However, those who have the ambition, may not have the experience needed to succeed. A tip is for CIOs to get a job into young “disrupter” companies that heavily rely on technology to deliver their products. Another advice is to critically assess the importance of technology in the organization: is it considered as a strategic asset? Does the CIO get to seat at the table of the board and executive management team meetings? If the answer is no, then the CIO will never be in the running for the top spot in that company.

Still, several success cases are presented that give hope to digital-enthusiast CEO-wannabes: Anthony Watson, former CIO for the retail banking arm of Barclays and then Nike, is now leading a blockchain-focused startup; Lars Fruergaard Jorgensen, former CIO and now CEO of pharma company Novo Nordisk; or Janie Miller, CEO of GE Transportation. However, what they all have in common is a diversified background: some finance, accounting, supply chain, etc., before moving to CIO positions. Broad experience and a great record across a range of disciplines is what sets apart those CIOs who do make it to the top.


Source:

Financial Times: https://www.ft.com/content/c13883d0-4a98-11e6-8d68-72e9211e86ab

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What does a CIO actually do all day?

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In this blog post, I want to elaborate on the article ‘The future of the CIO in a Digital Economy’.  (Weill & Woerner, 2013)

The two research scientists from MIT conducted a study that is based on several years and several methods of research. They looked into how CIO’s spend their time, and not any less important, how their managers actually wanted them to spend their time. From this study, they found four main CIO types.

The first one is the IT services CIO, the focus of this CIO is to provide the firm with all the IT services that the firm needs to operate in a digital economy. The external customers CIO, the second type of CIO,  works with external customers or partners to sell and provide them with IT enabled products and services. The third type is the embedded CIO, this CIO is more focussed on the management of the company and is thinking about the strategy of the company together with other managers. The fourth type is the enterprise process CIO, this CIO manages and oversees key operational processes, including IT processes.

It depends on the company’s goals what is a more effective type of CIO. For example, when you focus on return on capital you should be an embedded CIO. However, focussing on innovation requires an external customer CIO, and profitability measures an enterprise process CIO. Firms with a mixed performance focus likely have IT services CIO’s.

The other managers want their CIO’s to be an IT service focussed CIO at first and then become an embedded CIO, working with non-IT colleagues as well. Once this is the case, they want the CIO to focus more on external customers.

The CIO’s themselves consider themselves mostly as an IT service CIO that wants to develop into one of the other types. In order to do so, CIO’s can do three things to save time that they can spend on other activities; mentoring, governance and partnering. The goal is to allocate time wisely, develop leadership strategies to save time and look at the future and anticipate on what type of CIO is needed.

I can conclude that CIO’s are much more than only managers of IT services. The want to do a lot more and other managers require them to add a broader business value to be able to keep up with the digital economy.

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When the CIO reports to the CEO – What does it mean for the organization?

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As we have recently learn it (at the third session), the Chief Information Officer (CIO) can be placed differently within the organizationasl structure depending on the digital purpose of the organization. If Information Technology drives significant value within the enterprise, it means that IT is a strategic function, therefore the CIO should report directly to the CEO. On the other hand, if the company is focused on maintaining cost efficient operation, the CIO is most likely to report to the CFO.

There has been an ongoing debate in literature about the position and the reporting structure of the CIO. But it seems that in true digital companies, CIO reporting to the CEO is the way to go.

In today’s digital world, IT has become more important than ever and most companies realized that already. Therefore, IT is now an essential part of their business and holds a strategic role with a CIO on the executive board. In this case, when IT is of strategic importance in the company, it is evident that the CIO reports directly to the CEO. This implies that the CIO has more freedom in managing the whole organization’s IT activities and able to take more risks which can eventually lead to greater success.

In ideal digital companies, the CIO should be treated as an equal partner to the CEO. This way the IT strategy presented by the CIO can be aligned better with the company’s overall strategy, therefore, as a result, IT would support business activities more efficiently.

A CIO reporting to the CEO has other implications within an organization. This direct relation to the Chief Executive Officer can deliver a clear message to all the functional areas in the company, that IT is of strategic importance.  This can help the IT department and the CIO itself build a stronger and more respected image throughout the organization.

It is worth mentioning that a CIO who reports to the CEO and is part of the top management, has to have certain capabilities apart from sole technical knowledge. A competent CIO is ambitious and has strong leadership capabilities with a good sense of business when it comes to strategic decisions. Besides, a true IT leader has to be experienced and visionary in order to steer the company in the right digital direction.

As we can see, the CIO’s place in the organization hierarchy highly represents the status and importance of IT in the whole organization. In the age of digital transformation, the importance of IT is increasing in many industries across many companies. Therefore, in my opinion, the discussion on the reporting structure is leaning towards the CIO’s direct reporting to CEO as it represents the high importance of IT within the organization.

Sources:

Session 3

http://www.cio.com/article/3074899/cio-role/more-cios-report-to-the-ceo-underscoring-it-s-rising-importance.html

http://www.theceomagazine.com/business/why-cios-should-report-to-the-ceo/

 

 

 

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The difference between a CIO, a CTO and a CDO

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In light of the importance of leadership capabilities for the digital transformation of an organization, chances are high that you stumble upon abbreviations like CTO, CIO or CDO. I didn’t really know what the exact difference is, so I started to do conduct a little research and I would like to share the results with you.

The term CIO, Chief Information Officer, was first defined by Synnott and Gruber in 1981 as a senior executive of the organization responsible for information policy, management, control, and standards. They further added that the five primary functions of a CIO include participation in corporate strategic planning, responsibility for information systems planning, leading the development of corporate or institutional information policy, management of the organization’s information resources, and development of new information systems capabilities. I believe this definition is still quite accurate to describe the role of a CIO today. Just today the focus of a CIO is much more on actually increasing profits with the use of IT. From the definition, you can also tell that a CIO is rather internally faced and is mostly responsible for processes that happen within the organization.

The role of a CTO, a Chief Technology Officer, shares some common attributes with the role of a CIO. Both positions need to have a strong business understanding in order to bring added value to the organization and to align their respective responsibilities with organizational goals. They also need to have a technical background, so that they can understand and evaluate the underlying technologies in a business. In comparison to a CIO however, the CTO has a more customer facing role and is mostly responsible for enhancing the company’s product offerings. Connected to that, another difference of both roles is that the CTO is usually responsible for the development of new technologies in a company, whereas the CIO has its focus more on organizational problems and tries to solve these with existing IT solution.

Next to both roles, which have been around for a while now, the role of a CDO, a chief digital officer, has emerged recently. His major responsibility lies in digitally transforming traditional businesses to digital ones. In order to do so, the CDO needs to determine the parts of the business where influencers are able to support the change and to empower these influencers. That’s why, it is especially important that the person that fills in this role is not only a digital expert but also familiar with all parts of the organization.

I hope this short summary helped you to get a better understanding of these particular roles in an organization. Please keep in mind that these are not fixed roles and every company can interpret a role differently and the roles have been changing throughout the past. If you want to read further on this topic, I recommend you to check out my sources. Also, if you are curious how people actually became CTOs, CIOs or CDOs and what jobs they did prior to that, I recommend you to just use the LinkedIn advanced search and search for these positions in the country of your choice. This works fine even if you are not a Premium user.

I wonder what your opinion is on these roles. Does every company need to have all three roles on their board? Or do you think the CDO is just an evolution from the CIO and will make this role redundant?

 

Sources:

Penrod, James I. “The Chief Information Officer in Higher Education. Professional Paper Series,# 4.” (1990).

Synnott, William R., and William H. Gruber. Information resource management: opportunities and strategies for the 1980s. John Wiley & Sons, Inc., 1981.

http://www.computerwoche.de/a/der-cio-totgesagt-und-alle-haende-voll-zu-tun,2528153

http://www.forbes.com/sites/peterhigh/2014/03/03/why-your-company-should-consider-adding-a-cio-to-the-board/#4791a363e2f6

http://www.uniforum.org/publications/ufm/nov96/cio.html

http://www.huffingtonpost.com/don-tapscott/do-companies-still-need-a-cio_b_6214482.html

https://en.wikipedia.org/wiki/Chief_digital_officer#cite_note-8

https://en.wikipedia.org/wiki/Chief_technology_officer

https://en.wikipedia.org/wiki/Chief_information_officer

http://www.techrepublic.com/blog/tech-sanity-check/sanity-check-whats-the-difference-between-cio-and-cto/

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