Forum – A Benchmark for the Strategic CIO

“If I were talking to a CEO or president, I’d tell him it’s insane to make any strategic decisions without the CIO at the table,” says Gerry McCartney, assistant dean of the Krannert School of Management at Purdue University.

CEOs seem to agree. Over the past year or so, CEOs have been telling their IT chiefs that they need them on their team. They need them to drive the business and to be strategists.

This growing mandate for the CIO—supported by findings in the latest “State of the CIO” survey (see www2.cio.com/research)—is causing sleepless nights for CIOs who lack direct business experience. What does it mean to be strategic? How does a CIO know if he’s doing the right things well?

To help both CIOs and CEOs get a firm grip on the strategic elements of the role, in early January, nearly 20 members of the CIO Executive Council set out to develop a benchmark that would define and measure the performance of the strategic aspects of the role. The result, fine-tuned by several CEOs, is a scoring system attached to 20 key indicators that fall into four groups:

1. Strategic IT leadership

2. Strategic business leadership

3. IT-business strategic alignment

4. Application of the CIO’s unique knowledge and perspective

The CIO’s knowledge and perspective are perhaps the most critical and least appreciated parts of his role. “The unique advantage of the CIO is his view into and understanding of the business,” says David Gutierrez, CIO of ING Americas. “CIOs understand the internal and external customers and how departments work with each other.” Therefore, he says, CIOs are well-positioned to generate and develop new ideas about the business.

For example, he says, when an annuity is about to mature at ING, it means that a lump sum of money is being released—money that could end up out of ING’s purview if oversight is limited to an individual business silo. Enterprisewide integration, however, ensures the appropriate department would be aware of an annuity’s maturity and would be able to offer a service to retain that money. “This requires a shift away from a product-centric view to a customer-centric view that crosses traditional lines of business,” says Gutierrez, a perspective that is natural to the CIO position.

The big-picture view not only identifies and drives cross-enterprise strategic synergies, it focuses on what’s best for the organization as a whole. “The CIO should be concerned only about value to the whole organization, bringing an impartial, informed voice to the table when making strategic decisions,” says McCartney.

And of course, CIOs alone can contribute a deep understanding of technology. “My unique value proposition for Stanford is my broad IT background,” says Carolyn Byerly, CIO of Stanford Hospital and Clinics. “I’m at the table with the CEO as one of five direct reports. We spend two hours each week talking about business strategy, and we each bring our unique expertise to that. Mine is how to use information to achieve our vision.”We invite all IT leaders to use the self-assessment tool. Ask your colleagues, boss and staff to fill out the peer-review version. We’ll aggregate the data (anonymously, of course) to compare and contrast perspectives. This data will help enlighten those in IT and the rest of the business as to what it means to be a strategic CIO.