by Abbie Lundberg

CIOs Need to Look Beyond IT to Lead Business Innovation

May 07, 20073 mins
Business IT AlignmentCIOInnovation

To make an impact, it's vital for CIOs to focus on interacting with business colleagues and customers.

When things aren’t going so well, it’s human nature to focus on whatever’s closest at hand, what one knows best, to look for solutions there. So when IT is asked to contribute to business innovation, it’s natural for CIOs to turn to their staff and colleagues for ideas and to launch internal innovation projects.

But that response would be shortsighted. In a study conducted by IBM of 765 CEOs around the world, 75 percent said that collaboration and partnering outside the company are very important to innovation, while internal R&D has become much less so. The study cited business partners and customers as top sources of innovative ideas. Unfortunately, only half of the CEOs said their companies were collaborating beyond a moderate level.

Data from Egon Zehnder, the global leadership assessment and recruiting firm, illuminates another gap. Based on analysis of some 25,000 executives’ competencies, CIOs fall short in both market knowledge and customer focus—another reason they turn inward when confronted with the challenge of innovation.

CIOs know that business innovation trumps everything these days. In our 2007 “State of the CIO” survey (you can download the data via a PDF file here, respondents said “enabling business innovation” would be the way in which IT would have the greatest impact on the business in the year ahead, unseating “reducing costs” from the top spot for the first time in years.

But CIOs are focusing on the wrong things to deliver on the innovation goal. When we asked how they spend their time, only 17 percent put “interacting with business partners or customers” in their top five. Asked to name the top three personal skills most pivotal for success in the CIO role, only 15 percent said business knowledge and understanding industry trends.

What all this says to me is that CIOs need to get out more.

Get out of IT. Do a rotation in another part of the business.

Get out of the office. Go work with your customers; have your team do the same.

Get out of the country. Go work at one of your company’s international sites.

In the future, there will be two types of IT heads: IT managers, with a purely operational set of responsibilities, and true CIOs, who will be at the forefront of developing technology-enabled strategies for the business. Taking a parochial view of your role will pretty much guarantee you an operational future.