by Isaac Sacolick

3 ways CIOs can change the CEO’s perception of IT from cost center to strategic

Jun 22, 2018
CIOIT LeadershipIT Strategy

CIOs that want to drive transformation should champion customer impacting programs and empower IT lieutenants to pursue operational efficiencies.

strategic planning notes and ideas
Credit: Thinkstock

I fielded a question at last week’s Enterprise Transformation Exchange on how CIO can get their CEO and the Board to think of IT more strategically and beyond a cost center. While many CIO have had success moving from back office support functions and taking on strategic roles, others are still struggling to get their leaders to escape IT’s outdated mission of “keeping the lights on” or just “supporting the business”.

A recent survey of 199 IT leaders confirms this gap of haves and have nots. The good news is that fifty-two percent of respondents said their role is viewed as more strategic today than compared to 3 years ago. The bad news is thirty-two percent say their CEO does not fully understand their role, and 38% believe the CEO and Board still see the technology officer function as more of a cost center than revenue generator. In fact, only 7% of respondents strongly agree that their Board and CEOs view the technology organization as revenue generators.

If you’re part of the thirty two percent trying to break out of the back office, then you can only take some comfort that you’re not alone. Changing leadership mindsets is not trivial or something that can happen quickly. What should IT leaders do differently to change the CEO and Board’s perspective of IT’s mission to include opportunities that drive digital transformation and grow revenue?

1. CIOs should focus more time on customer facing activities

Picture the CIO that develops relationships with strategic salespeople and establishes enough credibility to go on customer calls. That same CIO dives into the data and analytics to learn how the best salespeople win business, what sources marketing uses to find the best prospects, and understands the profitability factors around growing businesses. When this CIO has the opportunity to ask a question or present a new idea at a leadership meeting, they have more data, insights, and experience to propose solutions that impact customers and revenue.

Then picture the CIO that spends more time reviewing operating metrics, evaluating technical implementation details, negotiating contracts with key vendors, or addressing compliance issues. This CIO has a very different message when asked to present status or new ideas at a leadership session.

One of the hardest things CIOs must do is to figure out how to best spend their time. This choice exists for CIOs at large organizations that may have sufficient lieutenants to oversee technology functions but still must decide what business areas and functions to invest time into. CIOs of smaller organizations may need to get into the technical weeds more often but must also deliver on customer experiences and relevant analytics. CIOs that take charge of their calendar and manage it strategically to learn how customers use their business’ products and services are more likely to see new opportunities where technology can improve customer experiences and drive revenue.

2. CIOs need to market and sell customer impacting innovations

CIO’s that want to get out of the back office must take on front office responsibilities like pitching ideas, selling solutions, and marketing capabilities. This is a new skill set for many CIO that grep up with “business driven IT” and primarily developing solutions to the opportunities and business cases presented by business sponsors.

There’s different ways to accomplish this change. For larger organizations that already develop customer facing technologies, CIOs should consider developing a product management team that can research opportunities and develop business cases. CIOs working in smaller, less formalized organizations should still be using customer insights, competitive information, and market research to present compelling reasons to invest in new innovations. Regardless of organization size and required formalities, all CIOs must be able to tell good stories and sell a sense of urgency when it comes to investing in innovations and new customer facing capabilities.

CIOs must also learn how to time their pitches and plans. Asking for investment just after an IT outage or after learning about disappointing financial results is ill advised, but there are more subtle timing issues that CIO must recognize. In addition, CIO must be persistent. As with any sales process, CIO should expect rejection and continue to pursue innovations that have the greatest chances of impact.

3. CIOs should champion agile leaders that pursue automation

CIOs can’t transform IT let alone the business without strong, empowered leaders that can listen, partner, drive changes, and adjust priorities based on feedback. These are the traits and skills of agile leaders that have been practicing agile methodologies long enough that they apply its principles in day to day workings with stakeholders and team members. This implies that they are not order takers and can listen for clues from business leaders on what opportunities to focus on that will truly impact the business. It means that they build scalable team collaborations and technology architectures because getting things done is not good enough and how they get it done is what implements strategy and drives scale.

These CIO also trust their lieutenants to champion the technology agendas that will make the organization safer, nimble, faster, and efficient. That means implementing DevOps practices, automating key business processes with RPAs, moving more payloads to the cloud, educating team members of security practices, championing data governance, pursuing a mobile first development strategy, enabling APIs on all strategic assets, and other technology strategies. These are all critically important to modernizing IT and enabling the business, but it creates a different leadership dynamic when the CIO empowers IT lieutenants to drive these changes.

The CIO can then use their clout to champion top line impacting changes, while being a “member of the leadership team” when programs that drive efficiencies, compliance, and technology stewardship are pursed and presented by IT lieutenants. Executives, and especially the CEO and Board are more likely to view their CIO as strategic when operating in this manner.

For CIO to be perceived as “strategic” by CEOs and Boards, it requires championing customer experience improvements and other top line initiatives. Adjusting how CIOs spend their time, work with their direct reports, and present new customer impacting capabilities are the keys to driving this change.