State of the CIO 2008: What Kind of CIO Does Your Company Need?

Summary

Based on the data compiled by the “State of the CIO” survey and insights from the CIO Executive Council we can make a set of recommendations for companies that want to gain the value that each type of CIO is suited to bring—particularly the Transformational Leader and Business Strategist CIO (see explanations of the three CIO types in the Findings and Analysis section). A parallel set of recommendations applies to leaders who want to match their focus and skills to the needs of their business now and going forward (see “What Kind of CIO Are You?”).

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Recommendations

1. Evaluate your current mission-critical needs from IT and IT’s leadership to determine what kind of a CIO you need. Below is a starter checklist.

IT Organization Needs

• Chaotic IT organization needs fundamental rebuilding, cost discipline and right sizing — Function Head

• Systems performance needs major improvement — Function Head
• Security and compliance need to be addressed — Function Head
• Outdated IT skills and processes need modernizing — Function Head or Transformational Leader
• Adequately functioning IT organization needs major strategic realignment with business goals — Transformational Leader

Business Needs

• Departmental and enterprise processes need to be reengineered and optimized for efficiency, effectiveness and/or growth — Transformational Leader
• New architecture standards and enterprise-level systems need to be implemented to support business growth and other goals — Transformational Leader
• IT and its business partners need to change the way they work together to create and execute the project portfolio — Transformational Leader
• The business needs IT to envision and enable new market opportunities — Transformational Leader or Business Strategist
• The business needs more sources of innovation — Business Strategist
• The business strategy team needs a representative from IT to help envision new ways to achieve business goals — Business Strategist
• The business strategy team needs a leader who can interpret market trends and how they can be exploited or shaped by technology — Business Strategist
• The business needs to exploit new technologies that make possible new types of competitive differentiation/advantage — Business Strategist

2. Depending on the CIO type you need, determine whether your current CIO has the necessary strength in the most pertinent leadership competencies for the role. If not, consider whether the CIO can hone those in a timely manner through executive coaching or whether you need a new person in charge.

Function Head

• IT function expertise — Thorough knowledge of the workings of the function and the ability to optimize its processes and operation
• Team leadership — focusing, aligning and building effective groups in one’s immediate organization
• People and organizational development — developing long-term capabilities of others and the organization as a whole
• Results orientation — a focus on improvement of business results

Transformational Leader

• Change leadership — transforming and aligning an organization through its people to drive for improvement in a new and challenging direction
• Collaboration and influence — working effectively with others, including internal customers, who do not work for you, to have a positive impact on business performance
• Strategic orientation — the ability to think long-term, leveraging business awareness, critical analysis and integration of information to develop an action-oriented plan
• IT function expertise
• Team leadership
• People and organizational development
• Results orientation

Business Strategist

• Commercial orientation — identifying and seizing opportunities to increase profit and revenue
• Market knowledge — understanding the market, including competition, suppliers, customer base and regulatory environment
• External customer focus — serving and building value-added relationships with customers or clients
• Change leadership
• Collaboration and influence
• Strategic orientation
• IT function expertise
• Team leadership
• People and organizational development
• Results orientation

3. Map priorities to needs. Check that the CIO’s management and technology priorities for the coming year map to the goals of the enterprise for the IT organization and for the business at large. Check that your expectation for the areas and processes that IT will impact in the coming year match the needs of the business.

4. Show them the money. Those companies that need a Transformational Leader should expect to provide a comparatively larger budget for IT given the serious changes that will be taking place. Those companies requiring a Business Strategist CIO should consider centralizing IT spending control under the CIO to avoid turf battles, maximize spending efficiency and allow funding for innovation pilots.

5. Put them where they can do the most good. Those companies that need the leadership of a Business Strategist or Transformational CIO should give them a participatory seat at the executive table and engage them regularly in the informal executive discourses, which are when the decisions are really made. Consider having the Business Strategist CIO report to the CEO or president. Consider having the Transformational CIO report to the CEO, president, or chief operating, chief process or strategy officers.

6. Set the expectation and provide formal and informal time for the Business Strategist CIOs to spend with other executive officers. Provide formal and informal time for Transformational CIOs to spend with business unit heads and owners of cross-enterprise processes such as supply chain.

7. Plan for the future. Businesses go through cycles, and needs can change profoundly in as little as two years. The executive team should look to the future and try to predict when its needs will shift. This is particularly important for organizations that need a Function Head CIO to fix problems today but will likely need a more strategic CIO to create advantages for it later. These may not be the same individual unless the CIO has past experience as a business strategist or the ability to grow those skills quickly.