Leadership - Picking a CIO Career Path Based on Leadership Strengths

CIO —

Recently I participated in a panel at a financial services technology conference. During the question and answer period, a senior partner from one of those high-dollar strategic consulting firms had the temerity to ask me how quickly I thought the role of CIO would disappear.

This gentleman is a friend and former colleague and was himself a successful CIO. He and I have been discussing this very question for a number of years now. But there, in front of dozens of current and aspiring CIOs, I had to admit that I believe the role as we know it would disappear at many companies—and in the not-too-distant future.

Perhaps you’re skeptical, but hear me out: Change in the CIO role is already upon us, and I would argue that it’s a natural evolution. Although technology will always have an integral role in business—we’ve become dependent on it—we’ll see a segmentation of CIO duties. In many instances, the CIO will continue as an operations leader, delivering services to the business units of an organization. However, in time we’ll see more CIOs evolving into strategic leaders, driving and enabling business strategy.

This evolution will be good for all of us because we’ll have the opportunity to make the best use of our strengths as leaders, whether as operations experts or strategists.

Two Visions of IT Leadership

Which type of leader a CIO becomes depends on how critical technology is to a company’s operations. A useful way to think about this is to use a measure that I call "IT Intensity." IT intensity is a company’s IT expense as a percentage of total operating expenses. In firms with high IT Intensity, it may be said that technology is part and parcel of the business and that it is difficult to separate the two. An example would be my company, Ameritrade. Technology is paramount in everything we produce, from the tools our clients use online to the back-end technology that routes their orders to the stock markets. At the other end of the spectrum are low-IT intensity companies, such as retailers or hospitality companies, for which other factors, such as efficiency or client service, are more critical for achieving business goals.

At low-IT intensity companies, the CIO will become a manager of relationships with outsourcers. For such companies—where IT is not a core function—efficiency, availability and cost are likely to be the primary drivers of IT decisions, and these companies will be better off having someone else deliver IT.

Continue Reading