by Michael Friedenberg

It’s All About the Top Line

Aug 27, 2010

As the economy recovers, CIOs have to help drive revenue growth, not just maintain profits through cutbacks and increased efficiency.

Bravo! Over the past 18 to 24 months, CIOs from around the globe have done an amazing job of optimizing, consolidating and standardizing IT operations. You’ve accelerated business priorities and driven organizational efficiency to new heights. Against the backdrop of the Great Recession, we’ve seen CIOs from a diverse mix of companies (such as Alcoa, GM and the New York Times) stepping up to deliver.

In the history of the CIO position—more than two decades—I cannot think of a more challenging stretch than 2008-2009. I’ve been impressed by all the CIOs who transformed their businesses and their roles within the organization. I hope everyone took a deep breath in the last few months, because the next wave is headed your way.

The story now is about revenue growth. What CEOs want most today is new revenue flowing to the top line. Of course, this won’t be news to our ­readers. You’ve soldiered through consolidation and standardization not just to cut costs, but also to prepare your companies for the eventual market comeback.

In the past few months especially, it’s been fascinating to watch Wall Street react to earnings reports that showed strong profit numbers but weak revenue growth. Stock prices soared or plummeted with the market’s reaction to news on revenues. Microsoft issued tremendous profit numbers but its stock dropped over concerns about future growth. Contrast that with the Apple of Wall Street’s eye, which continues to drive incredible profits while stacking up massive revenue gains.

More and more of the CEOs I talk with repeat this mantra: “It’s all about revenue growth!” Yet many of those same CEOs aren’t convinced that the CIOs who were great at cutting costs will be the right leaders to help flip the switch to making money again. We know from our research and in-depth discussions within the CIO Executive Council that your biggest skill-set challenges will show up in three areas: customer understanding, market knowledge, and your ability to effectively communicate. When it’s time to rev up the revenue, those are core competencies that CEOs expect to find in all their senior leaders.

So it’s time for CIOs to prove once again how nimble their business skill sets have become. This is your moment to show the organization what those hard-won strategic skills can really do for top-line growth. Game on!

Michael Friedenberg, President and CEO