I was recently talking with Scott McKay, CIO of $10 billion insurance provider Genworth Financial, and he offered the following analogy:
"In the boardroom, there are chairs around the table and chairs lining the walls. Every chair is occupied by an executive who is highly valued and highly compensated. But there is a clear difference between the people who sit at the table and the people who sit along the wall. The people at the table are making decisions about what the company will do. The people around the walls decide how to deliver on those decisions. In the boardroom, there are the 'what people' and the 'how people.'"
Charged with operational efficiency, security, delivery, and support, CIOs have spent years focused on the how. After all, unless you are in a high-tech company, technology has always been a "how." Technology delivers. Technology operates. Technology enables. But with advances in consumerization, big data, and mobility, technology is becoming such a disruptive force that it is time, suggests McKay, for CIOs to switch chairs.
Before all of you second-row CIOs march right up to the table, however, you have some work to do.
CIO as 'capabilities champion'
"Each 'what' executive has a unique perspective on the business," McKay says. "The CFO knows how the numbers need to move to create shareholder value. The head of sales knows what customers are looking for. What is the CIO's unique perspective?"
I know what you CIOs are thinking: We know technology! We know APIs and Hadoop and cloud and Splunk, and how it can impact the business — that is our unique contribution.
True, but technology is an enabling tool; it cannot be the totality of what you bring to the table. There is so much more.
"The CIO sees beyond the silos and is intimate with how the business works end-to-end," says McKay. "The CIO knows the data, the processes, and how the organization operates. In today's business world, 'capabilities' have become critically important to competitiveness.
The CIO has the unique opportunity to become the 'competitive capabilities champion' at the executive table. CIOs can take key capabilities, like processes for new product introduction or for customer fulfillment and say, 'If we want this process to differentiate us, here is what we need to do to.'"
But here’s the rub. It is not enough to look across silos for opportunities to improve capabilities. CIOs need to dig deeper.
Accept ownership and risk
"For years, IT leaders have been taught to enable the ideas of others," says McKay. "They have been taught always to have a business sponsor, and that they should spend their time aligning IT to a business strategy. They have had it easy, because they have not had to take ownership for anything. They just ask the business, 'what do you want to do?' They don't have to put forth opinions. They don't have to make tough decisions. They don't have to take personal risk."
But how do CIOs, who are burdened with massive operational responsibility and who have learned — through their entire careers — to enable and support, shift their mindsets toward ownership and personal risk?
"Owning is very different than enabling," says McKay. "The head of sales has to commit to a sales plan every year but doesn't control product or manufacturing. CIOs who want to earn the respect of their sales leaders must be willing to take ownership for big initiatives that really matter to the business. They need to own the outcome even when they do not control all the resources necessary to deliver it. Ownership takes more personal risk than enablement."
New IT leadership skills required
OK. So you've done the gut-check and decided to step into the breach of ownership. Are you ready to sit in the big chair?
"Once CIOs have decided to take on more personal risk, they have to back that up with a broad skill set," says McKay. "In addition to the technology and operational skills that CIOs have always had, they need to develop a much more strategic view of how capabilities create value. This includes classic strategy skills around markets, customers, and products, a deep financial understanding of how cash is generated and delivered to shareholders, and an understanding of how to improve the business's most important capabilities to a level where the market can really feel it."
The 'connect, automate, and decide' framework
The task of improving a business's capabilities is a heady one. McKay offers a framework.
"In the end, we can change only three things: connections, automation, and decisions," he says. "With this framework, you can look at any capability and see first, how people interact with each other and how that interaction can be improved. That's the connection part. Next, you have the ability to replace manual work with robotics and other technologies. That’s automation. And third, every capability involves decision making, which you can improve by delivering better data in a better way. Apply the [connect, automate, and decide' framework, and reimagine a capability to be more competitive.”
Take care of your basics
As a CIO who has spent years in the second row, where do you start?
"Take care of your basics: your infrastructure, cost structure, project management, and delivery," McKay says. "Then start taking smaller ownership opportunities that reach beyond IT. Own a new product introduction, run an acquisition. You'll gain experience in broader business ownership, and you'll build your knowledge of strategy.
"Over time, you’ll be recognized as a broader contributor, and you'll find yourself creeping from the second row to the first. But you cannot just declare yourself a first-row CIO if you don't manage second-row activities. If the network is down, nobody will care about your point of view."
CIOs have a critically important view of the business that no one else has. For years, that view has enabled efficiency, productivity, security, and operational excellence. As McKay suggests, it is time for CIOs to start defining, not only enabling, their company's futures. So, make sure your team can handle the "how," and go take that chair!
About Scott McKay
As executive vice president and CIO at Genworth Financial, Scott McKay is responsible for leading the company's technology and corporate strategies. Since 1993, he has performing a variety of business functions involving technology, servicing, marketing, and acquisition integration.
Prior to 1993, McKay spent 10 years consulting in the insurance and financial services industries, working with technology, operations, quality, marketing, and product development. He obtained a Bachelor of Science in computer science from West Chester University of Pennsylvania.