by Mary K. Pratt

What it takes to be a true transformational CIO

Nov 27, 2018
CIODigital TransformationIT Leadership

The CIO role has undergone significant change as organizations transition into digital enterprises. Here’s how to move beyond being an operational leader.

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Credit: Thinkstock

Atticus Tysen initially framed his challenges in technical terms.

“I thought we had a technical problem, and that was why we couldn’t get new products out fast enough. I thought the company had too many systems, and that the systems were too brittle, and if we just fixed them, we’d be OK,” he says.

That was back in 2013, when he became CIO at Intuit after 12 years working on the product side at the software company.

Tysen, however, quickly realized that the most impactful CIOs today don’t view operational excellence as the top measure of success. Instead, they see that as the starting point and quickly move beyond it to leading transformational change.

“We had to move to thinking about the value we provide: Is something I’m doing going to open up a new market or reduce the number of phone calls I get about billing? We still have to manage operational metrics, but frankly no one else cares about those. You have to focus on business outcomes and business metrics,” he says.

Many IT leaders are facing the same realization that Tysen reached: that the CIO position needs to evolve as organizations transition into digital enterprises.

Management experts, researchers and CIOs themselves in multiple studies and in interviews say that becoming a transformational CIO is a challenging journey that requires a combination of new skills and tactics that are layered onto — but not displacing — all the ones needed in the past when the top priority was operational excellence.

They acknowledge, too, that most CIOs are still on that path, moving first from operational leader to enabler and then to this next step: the transformational leader.

“CIOs must be operational, but they also need to be forward-thinking and they have to be thinking about how to generate revenue,” says Anna Frazzetto, chief digital technology officer and president of technology solutions at Harvey Nash, a global recruitment consultancy and IT outsourcing service provider.

From navigational to transformational

Frazzetto says her firm has moved from calling on CIOs to be “navigational” leaders who guide C-suite colleagues through changing technologies to now labeling them as transformational.

Indeed, Harvey Nash and KPMG titled its 20th annual CIO Survey in 2018 “The Transformational CIO.” The survey of 3,958 CIOs worldwide found that the top priorities listed by CIOs reflect their expanding responsibilities. The top six priorities (out of the 19 listed) are:

  • Improving business processes
  • Delivering consistent and stable IT performance to the business
  • Increasing operational efficiencies
  • Saving costs
  • Enhancing the customer experience
  • Developing innovative new products and services

Telling, however, is how these priorities have changed over the past five years, with improving business processes and developing innovative new products and services each increasing 2 percent over 2013, and enhancing the customer experience making its debut on the list this year.

On the other hand, traditional CIO priorities are not getting the same focus. Saving costs — the No. 1 priority in 2013 listed by 71 percent of respondents — is now a top priority for only 55 percent of CIOs. Delivering consistent and stable IT performance has seen a similar decline, from 70 percent in 2013 to 62 percent this year. Increasing operational efficiencies also dropped, from 68 percent to 62 percent.

The study results show the wide range of expectations that CIOs must meet today, Frazzetto says. “CIOs need to manage and play an active role in being able to drive the organizational forward. They have to be nimble and responsive. They can’t be all process-oriented,” she adds.

A new type of CIO

The shift to a stronger focus on transformation requires a new type of CIO, one focused on the organization’s customers, its revenue stream, its growth, its market and its future, experts say.

Deloitte’s 2018 global CIO survey, “Manifesting legacy: Looking beyond the digital era,” found that the top priorities for its 1,437 respondents were transforming enterprise business operations and driving top-line growth and revenue.

That takes a CIO who understands value creation, top-line growth and disrupting markets, says Kristi Lamar, managing director and the experience leader for the U.S. CIO Program at Deloitte Consulting.

Deloitte sees CIOs as having four distinct faces today:

  • The operator, who delivers efficient IT services
  • The technologist, who assesses technologies and designs technical architectures
  • The strategist, who partners with the business to align business and IT strategies
  • The catalyst, who initiates innovation through transformational change

Lamar says transformational CIOs have their deputies focus on operator and technologist tasks, leaving themselves to focus on being a strategist and catalyst.

Painting a compelling vision of the future

Tysen has seen that in his own evolution. Yes, he says, CIOs still need to execute flawlessly but they need to understand that’s a given. As he says, “The end customer doesn’t care whether their interaction is on a legacy system or a modern system, it just has to be seamless.”

As CIO, he says his primary focus is on how enterprise IT serves the company’s customers, a mindset he developed while working on Intuit’s product team and carried into the IT department. He requires IT team members to observe their business-side colleagues, such as call center workers, as they interact with the company’s customers so they can better understand those touchpoints and where they can improve.

Tysen says he does this because the line between what IT, product and customer service enables is blurring as enterprises become digital companies. He points to one of Intuit’s offerings as a case in point: Intuit customers who need help with their taxes can now interact with tax professionals via video conference. Tysen says it’s hard to distinguish where the product team’s and his own IT staff’s contributions to this capability begin and end.

CIOs also must be able to communicate their visions for the future based on why it matters to the company and the company’s customers, Tysen says.

“The typical story of a tech presenter is spewing out facts. But you have to start with what the future looks like, what’s the change you are trying to create, what are you going after, what’s the outcome and then talk about how will you get there,” he explains. “You need to paint a compelling picture of what the future can be. That’s the role of today’s CIO.”

Traditional vs. transformational CIOs

Tim M. Crawford, CIO and strategic advisor for advisory and holding company AVOA, sees several characteristics dividing transformational CIOs from traditional ones.

He says transformational CIOs have positive and engaging relationships with all their C-suite colleagues, including the CEO. “They almost look like the right-hand person to the CEO,” he adds.

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They see the company’s customers as IT’s customers. “They know what the customer looks like and what the customer journey is, and they think about how technology can make this customer journey better,” Crawford says, noting that transformational CIOs even meet directly with customers to get a better line of sight into the touchpoints they have with their organization.

Tom MacMillan, CIO of EmblemHealth, one of the country’s largest nonprofit health insurance and wellness organizations, believes transformational CIOs need to look “toward the future, 2020 and beyond, and at what shift from legacy practices to digitalization is required to make the business operating model successful in the future.”

He adds: “Historically the CIO role was about bringing systems to human problems and looking at operating scale and efficiencies. Scale and efficiency today can be bought, for lack of a better term, through cloud, AI and robotics. But transformational CIOs are looking at different ways to enable operating model changes using those technologies.”

MacMillan says he works with his C-suite peers to articulate what outcomes the organization wants in the future and to devise how they’re going to use technology to get there. He talks about being an “enabling coach” and creating capabilities that the business can control and change as their markets evolve and their needs shift.

“Instead of the business being a user, and because we’re moving to cloud-based platforms like Salesforce as a service, we look for our business units to develop competencies to be nimble. So they’re engaged in ownership of the products they use, and that tends to let us move more quickly to release new functions or have better conversations with the vendor because we’re all around the table to talk about the business goals,” he explains.

As a result of this shift, CIOs and their IT departments need to bring a different mindset to the table, McMillan says. “There was this whole notion that IT was a service that was provided to everyone else. They have to be service-oriented, but they have to measure their actions in value, not in ‘Did I meet my commitments to the business?’ but ‘Did we create the value we wanted for the business?’” he adds.

MacMillan says adaptability and flexibility are key traits for today’s CIOs, as they need the ability to pivot quickly in response to shifting objectives and technologies that emerge with ever-increasing speed.

“Technology turns over every two to three years now, so you have to be willing to divest yourself of prior beliefs,” he says. “It’s really about being open-minded to a host of different technologies and a host of different solution options. The folks that tend to get married to any one of a few ways of getting a task accomplished will stall out on being transformation.”

Similarly, Frazzetto says transformational CIOs need to become comfortable with diffusing control of some IT throughout the organization — the most modern incarnation of “shadow IT.”

They have to move past project mode, recognizing that transformation is now a constant and the work is never done, Frazzetto continues. They have to have a higher degree of financial acumen, understanding not just CapEx vs. OpEx or profit and loss but also revenue creation. And they have to be more compassionate, understanding and engaged than was required in the past — even extraverted.

“They need to be able to relate to people, and they have to want to listen to what people say,” she adds.

Transformational title

Marty Boos, the CIO of ticket-exchange site StubHub, says he, too, has found that the top IT job requires different skills today as the position has added transformation tasks to its operational responsibilities.

He says he still must “make sure our systems are 100 percent available” so that customers can list, find, sell and buy tickets. But he has the equally, if not more, important task of leveraging technologies that allow for greater speed and innovations, such as developing capabilities to take new forms of payment in weeks — not months.

To do this, he has upped his level of collaboration by meeting more regularly with peers (including daily check-ins with the head of product and product owners) to get better visibility into workflow as well as potential obstacles.

He similarly supports more cross-domain coordination within his own IT team.

He says he focuses on being a leader to his own team, ensuring they have the needed training to work with new technologies and in new methodologies and still bring their institutional knowledge to bear. And he’s investing in new technologies, such as Pivotal Cloud Foundry, to add flexibility to the IT stack by enabling his team to develop and deploy using the same tools regardless of what cloud would host the finished applications.

CIOs also need to embrace that flexibility if they want to lead transformation, Boos says, adding: “We’re in a realm where we’re in continuous change so don’t be afraid of continuous change.”

At the same time, though, they need to be realistic about how fast transformation takes. CIOs experienced in transformation, management experts and researchers say IT leaders need to temper enthusiasm for change with patience and reasonable expectations — both for themselves and their organizations.

“There is a small percentage of CIOs who have really earned the title of being transformational,” Lamar says. “But for most CIOs, it’s going to take time before they get there. We’re at the very beginning stages.”