THE STATE OF THE CIO – Building Executive Relationships

Next question, please. After more than a decade of debate over to whom the CIO should report?the CFO or the CEO? ?the argument appears settled. And the CIOs are the winners, reporting in the majority to their CEO. Just as they thought they should. In “The State of the CIO” survey, 63 percent of respondents said they report either to their CEO (51 percent) or COO (12 percent), with only 11 percent reporting to their company’s CFO.

Having such a direct line to the top has become so important to CIOs that many now demand such a reporting structure as a condition of employment, industry analysts say. “CIOs are totally hung up on wanting to report to the president or CEO in a company,” says Beverly Lieberman, president of Halbrecht Lieberman Associates, a Stamford, Conn.-based executive recruitment company. Often, the reporting relationship is a deal-breaker for prospective CIOs.

The issue: If the CIO isn’t near the top of the CEO’s agenda, then is IT? No CIO who considers himself a business strategist wants to work in an enterprise where IT is viewed as merely a tactical function. And because of this increasingly common stance, some holdout companies that still have their CIO reporting to the CFO are reconsidering. Otherwise, “they can’t attract the very best [job candidates],” Lieberman says.

At some companies, incoming CIOs have been able to negotiate a compromise: They’ll report to the CFO but also sit as a full member on the senior executive steering committee. These CIOs want to be a part of setting business strategy, and they need to be in position to build collaborative relationships with other business leaders.

In fact, “The State of the CIO” survey reveals that some CIOs have their best working relationships with other executives beyond their CEO. When asked with whom they feel they have the best working relationships, 43 percent of CIOs named their CEO, but another 40 percent said their COO (21 percent) or CFO (19 percent).

To some CIOs, reporting structure is less important than the perception of IT within the enterprise. When John Parker, former CIO of Northwest Airlines, switched jobs and industries last November to become CTO and senior vice president at A.G. Edwards & Sons, the St. Louis-based financial services company, he went from reporting to a high-level business executive to a CIO. But he says the reporting relationship was far less a consideration than the opportunity to bring his IT and leadership experience to an entirely new industry. “As long as I get the right level of communication and access [to the CEO], I’m not too worried about the relationship,” Parker says. “It only becomes important if there’s a huge difference between how the CEO treats me and how he treats one of his direct reports.”

Still, many CIOs aren’t willing to compromise on this issue. Laraine Rodgers, former CIO at Xerox and the city of Phoenix, says that reporting to anyone other than the CEO would be a problem for her if she ever returns to a CIO role. “The rank of your boss makes a whole heck of a lot of difference in how folks respond to your requests and demands,” says Rodgers, who currently serves as president and executive director of the Arizona Partnership for Higher Education and Business in Phoenix. “My current role is a good example; all I have to say is that my board chair is Bill Post, chairman of Pinnacle West Corp., and folks get me on their calendar, pronto.”