Cynthia Hamburger spent years climbing the corporate IT ladder, including a stint as a CIO at Dun & Bradstreet, yet when she was offered the CIO post at Learning Ally, she politely declined.
It wasn't Learning Ally's nonprofit business model or smaller stature that was the turnoff, and she clearly spied opportunity for technology-driven change at the company, which provides audiobooks and services for people with learning disabilities.
The problem, as Hamburger saw it, was that the CIO role was too narrow to drive the scope of what needed to be accomplished. It was only when the company agreed to create a combined CIO/COO post that Hamburger was game to get on board.
"When I was first offered the position as CIO, I had no interest," says Hamburger, who stepped into her official role in April 2013. "When they started to add in the operational side ... it became much more interesting. This was a 65-year-old company in need of a technical reinvention. I had to have [responsibility] for enough of the business that I could control my destiny and really start the transformation process."
With technology now the cornerstone of most companies' operations, there is a growing cross-industry push to connect the oversight of IT with operations. In some cases, like at Learning Ally, the answer is a blended CIO/COO position. At other companies, the CIO is now reporting to the COO or to a hands-on CEO instead of the CFO, which had been the prevalent organizational structure in recent years due to the focus on cost cutting.
The 2013 IT Trends Survey conducted by the Society for Information Management confirms some movement as to where the CIO fits in the overall executive management suite. The study, of 650 senior IT leaders, found that 44.7% of CIOs are now reporting directly to the CEO, up from prior years, with 14.4% answering to the COO, and 27.1% under the jurisdiction of the CFO, a decline from years past.
While the actual reporting structure will vary according to a company's business goals, culture and executive skill sets, the common theme to the reshuffling of the management deck is to break down organizational silos and other barriers preventing technology from driving innovation and delivering a competitive edge.
"IT and business operations have converged in the enterprise to the point where you can't have one without the other," says Cory Chaplin, director of technology solutions for West Monroe Partners, a management and technology consulting firm. "It used to be that IT was a support function, making sure people had phones and computers. Now IT is in charge of everything from e-commerce applications to mobility. Since those things are the business ... it makes sense to have more overlapping roles."
The case for CIO/COO alignment
Having a closer CIO/COO connection, whether in the form of a new reporting structure or a combined role, makes particular sense in a couple of scenarios. Companies with a strategic mandate to effect operational efficiencies or those divesting assets as a result of a merger or acquisition stand to gain significantly from tighter alignment between these two roles, says Tim Stanley, a former CIO and COO and now president of Tekexecs, an executive advisory and consulting company.
Companies that have also made a significant operational investment in technology and have heavy lifting to do in the areas of IT deployment and change management would also be well served by fostering a tighter relationship between the two posts and their respective organizations, which historically have been run separately, he adds.
"The COO is often a ringleader and the accountable party to pull stuff together across areas, and IT by definition is the connective tissue and an enabler for getting stuff done," Stanley explains.
Richard Thomas, CIO at Quintiles, which helps drug and medical device companies through the process of clinical trials, says his direct reporting relationship with the COO was invaluable during a period of heavy transition back in the mid-2000s.
In addition to keeping up with the rapid-fire pace of change in the healthcare sector, Quintiles was transforming to become a global company, Thomas explains. That process involved leveraging a range of technology initiatives, including clinical systems, modern email and collaboration platforms and an ERP upgrade to enable new global processes.
At the time, the Quintiles CEO and company founder played more of an external-facing role, according to Thomas. The COO was a natural candidate to oversee IT since he had visibility across the organization and could control the pace at which things changed. "Working with the COO in such a tight partnership meant tradeoff decisions could be made in real time and with complete clarity on what the future would look like," Thomas says.
Trending: "CIO-plus" roles
In many cases, when IT and operations do converge, it's not a case of a traditional COO taking the reins of IT, but rather of an elite CIO stepping up. That's part of a broader trend to award the senior IT role more responsibility -- what some management consultants are calling "CIO-plus."
"The great CIOs are becoming more of an operator and view their role like a COO, thinking more broadly and recognizing their strategic perch in the corporate structure," says Peter High, president of Metis Strategy LLC, a boutique strategy and management consulting firm. "They are more likely to have an intimate understanding of other areas like human resources and the supply chain that arguably no other leader has, so it's logical for them to take that next step to COO."
For Duane Anderson, a CIO-plus role has always been a goal. Anderson, now CIO/COO at marketing agency Marquette Group, has had several key mentors, including Tekexec's Stanley, who blazed the trail for a broader CIO role when the pair were at Harrah's Entertainment, now Caesars. "It was part of the proving ground when I came up," Anderson says. "I didn't know that it wasn't normal."
Given that IT has become so strategic to what most companies do, Anderson says it's imperative for the CIO to report to a visionary leader like the COO or CEO, not the CFO, who tends to become too focused on IT as a cost center. "For any technology initiative to be successful, it's not just about the technology being implemented, but also about the processes around it and the people who can deliver," he explains. "That coupling of CIO/COO -- whether it's a dual role or a direct report -- helps unlock the three ingredients of people, process and technology."
When Anderson started at Marquette in June 2009, he came onboard as CIO; there was no formal COO position. After a couple of years, Anderson was recognized for driving a lot of the product direction and for identifying the business requirements that were influencing where the company should be headed, he says. The carrot, he says, was an offer to become the company's first-ever COO.
The benefits of having core IT, operations, and development and infrastructure report to a single person have been significant, Anderson says. "We now have much more streamlined requirements between operations and IT and a much closer melding of the groups now that they are under one purview," he says. "While there are still lines of demarcation, it's much grayer -- it's no longer that there's a business customer over here and the IT group over there."
For years, the goal of top CIOs has been to understand and get closer to the business, but what's different with these new reporting scenarios is that there is actual authority to get things done, adds West Monroe Partners' Chaplin. "While a CIO may understand the business side, those business folks don't report to him and he can't control how often they meet with him or what training they get," he explains. "If he's in charge, he can mandate expectations of the team and have authority over them that was previously lacking."
Having the power to make decisions across the business is what Learning Ally's Hamburger knew was essential to achieve the company's aggressive goals. Given the cost pressures and the demand to move quickly, Hamburger says there was no room for the usual roadblocks impeding IT deployments, including traditional layers of leadership.
"We don't have the time to think about business requirements and then translate them into IT requirements and then start programming with a waterfall approach to building systems," she explains. "We needed a more iterative 'test, learn and change' environment, and to move that fast, we couldn't have all those handoffs in the organization."
Hamburger is using a similar approach to building out her team. "I don't run a technical or operations team any more -- I run a combined team," she says. "We're not just combining things at the C-level, we're integrating operations and technology at the next level because it makes for a more efficient organization."
Unique skill set required
While there are synergies between the CIO and COO skill sets -- strong communications skills, deep knowledge of the business and robust leadership chops -- not every CIO has what it takes to win oversight of operations. While CIOs typically have a keen understanding of metrics and key performance indicators, a COO needs knowledge of how the business is performing and what levers to push to drive the necessary outcomes, says Tekexecs' Stanley.
Profit & loss (P&L) experience, understanding value creation across the business, and earning the confidence of the rest of the C-suite are other characteristics that will help a CIO move confidently into COO territory.
"A good CIO receives strategy from other members of the C-suite or division heads and recognizes the IT components articulated in those plans," Metis Strategy's High says. "The really great CIO-plus recognizes that there are themes emerging across the different strategies, and from that strategic perch within the organization, starts to tie things together across divisions."
Then there are some tried-and-true IT habits that will have to fall by the wayside, says Stanley. "You have to purposely forget to be a 'techie CIO,'" he explains. "And you have to have an intellectual curiosity about things that traditional CIOs find a little ephemeral or distasteful" -- like brand marketing, for example.
Barry Carter says it was his ability to recognize and articulate how to solve operational issues in the language of the business that ultimately won him the CIO/COO spot at EFG Companies, which develops consumer protection strategies for businesses. Carter, who came in as CIO reporting to the CEO in 2012, had P&L responsibility at a previous post as well as operations experience, which primed him for taking comparable responsibility at EFG.
"As CIO you get to see the business from end to end," he says. "As you automate processes, you start to see the macro picture on how to influence the business, and pretty soon you get really good at knowing what's needed to run operations."
Under his direction, EFG resolved some major issues surrounding how it met its service levels and financial targets -- a set of work that earned Carter the COO post after less than year.
In the end, Carter says it's not really about the title, but about the influence. "We're seeing a blurring of titles and accountability," he says. "The person that delivers the most value for the company is the one getting the more senior spot."
This story, "Ambitious IT Pros Seek COO Role" was originally published by Computerworld.