The Strategic CIO: Using Leadership Skills and IT to Create Competitive Advantage

CIO — You wouldn’t expect a traditional CIO to manage the process of, say, opening 10,000 seasonal locations and hiring 100,000 seasonal employees, and then be asked by the CEO to run a line of business in addition to the IT function. Nor is it typical for a CIO to routinely work with business leaders to clarify their strategy and translate it into action, and then be asked by the CEO to manage business strategy worldwide. But this is what happened to us last year at H&R Block and Chevron Global Downstream, respectively.

We aren’t unique in seeing our roles evolve and take on a broader, more business-oriented and strategic focus. We believe that this is the future state of the CIO role, which in time will become the mandate for most CIOs at most businesses.

What distinguishes a strategic, or “future-state,” CIO? Fundamentally, the CIO role encompasses three aspects: the function head (focused on operations), the transformational leader (focused on alignment, enablement and process change) and the business strategist. The strategist targets how a company creates shareholder value and serves its customers. The strategic CIO is a business leader who happens to use technology as the core tool to create competitive advantage. CIOs who primarily have an operations or transformational role look at a company from the inside out—starting with how they operate and then looking out to the customer. Strategic CIOs look at the company from the outside in and ask, How is the company perceived by customers? What is the technology platform our competitors are using to compete against us?

How We Got Here
Why are CEOs asking CIOs to act more as strategic business partners—and why is it happening now? First, IT is more and more pervasive in everything we do, and this drives a strong relationship between business goals and the IT that will help achieve those goals. Therefore, the CIO must be effective at understanding strategy, and working in a structured way to translate that strategy into opportunities and sound IT investments.

At Chevron during the past three years, Louis Ehrlich had made great strides in helping the business turn strategy into action. At the same time, because of globalization and the need for a more integrated value chain, there was a desire to get better at strategy deployment. The dialogue Louis was having with the chief executive of Global Downstream and others was about strategy in general and what it takes to achieve it. Ultimately the business unit leadership recognized the value of a deliberate approach to translating strategy into action. They moved the business strategy group, along with a new group focused on overall business architecture and many other services, to the new position that Louis now holds.

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