What Makes A CIO Effective?

Technology Staff Editor
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It's a discussion suited to a late night with friends and a few glasses of beer: How do you become a more effective person? It's also the stuff of popular culture: There's a "secret" to personal effectiveness, and/or it's the result of seven particular habits. InformationWeek was interested in finding out the characteristics, personal traits, technology skills, and business acumen that make for a highly effective individual in one of the most demanding jobs in today's corporate environment: the CIO. To try and get an accurate picture of CIO effectiveness, InformationWeek queried more than 700 business executives, not only CIOs and VPs of IT but also IT managers and staff, senior corporate managers (CXOs such as CEOs, CFOs, and COOs), and line-of-business managers. InformationWeek asked effectiveness questions about CIOs in general and about the respondents' CIOs in particular--which, of course, included the 180 CIO respondents who were essentially evaluating themselves. The intent was to provide a complete picture of what makes for a highly functioning CIO. The result was a mixed review: some A's, a few C's, and some significant check marks under "needs improvement." ALIGNMENT ÜBER ALLES Far and away, the characteristic most identified with an effective CIO is that person's ability "to support company-wide business strategy." Seventy percent of IT chiefs agree on that, as do more than three-quarters of CXOs and almost two-thirds of line-of-business managers (see chart, right). The next two most important characteristics for CIO effectiveness are the ability to understand both business process and technology, and the ability to drive innovation. That's in line with what most observers see as the emerging role of the CIO: a strategist well versed in the processes encapsulated in a company's software applications and able to envision, articulate, and help implement business process change. Unfortunately, fiscal responsibility was the effective characteristic most respondents associated with their current chief tech execs. While being good with a dollar is a nice compliment, it's hardly a ringing endorsement for that person as a business strategist or an agent of change. Fortunately, the ability to support business strategy is a characteristic of a significant number of CIOs, according to 59% of their CXOs (see chart, p. CIO4). And almost half of those executives believe their CIOs have the ability to drive innovation. That should be an important signal to CIOs not similarly thought of: If you're not in lockstep with business strategy, you aren't driving business innovation, and your most recognizable characteristic is money management, then maybe your CEO is envisioning someone more effective for your position. The priority of aligning technology initiatives with business strategy appears several times in the survey. When asked which tech skills are most important to an effective CIO, business and technology alignment scores highest, with almost three-quarters of CXOs and 81% of CIOs agreeing (see chart, left). When asked what skill is the most essential to develop over the next 12 months, the ability to support company-wide business strategy was tops again. That alignment imperative is good and bad. Business-technology alignment has been a goal of tech managers for almost as long as the position has been in existence. It has scored in the list of top 10 management concerns in the Society for Information Management's annual survey for 27 straight years and was No. 1 from 2003 to 2006, edged out this year only by "attracting, developing, and retaining IT professionals." It speaks to the primary importance of technology in conducting business today that all parts of the organization acknowledge the need to match up IT initiatives with business strategy. On the other hand, "alignment is one-sided," says M.S. Krishnan, a professor of business information technology at the University of Michigan's Ross School of Business. Alignment is more closely associated with "order-taking," IT's old-line identity as a passive participant in business operations, he says, than with its modern-day embodiment as an agent of business process change. Krishnan prefers the expression "synchronization," as in business strategy and tech projects should be synchronized to achieve maximum impact on the company's business model. THE CULT OF PERSONALITY The survey also asked about personal characteristics, the individual traits that make for an effective CIO. Surprisingly, the ability to inspire and motivate an organization scored highest overall. CIOs aren't generally thought of as inspirational corporate leaders, cheerleaders, or motivational speakers. Except if you think of some highly visible CIOs, such as Rob Carter of FedEx, who isn't only a brilliant technical tactician but an IT visionary. At a recent SIM conference, Carter described business innovations made possible by the intersection of digital and physical networks, exploited by companies like Amazon.com, eBay, and his own. "I have the best job in business," he said. In terms of what survey participants' CIOs bring to the table, the No. 1 personal characteristic identified by most respondents is ethical integrity. Once again, it's a nice pat on the back but hardly an effectiveness endorsement. It's significant, though, for this reason: Because the CIO is the steward of a company's data stores--employee data, partner data, customer data--personal integrity is an asset for that person, and even potentially a competitive advantage for the company where he or she works. There are some disconnects in this part of the survey: More than half of CIOs give themselves credit for excellent negotiation skills, but only 17% of CXOs identify that as a valuable trait in a CIO. On the other hand, almost three-quarters of CXOs consider their CIO a team player, while only a quarter of CIOs think that's an effective personal asset. That can be read this way: Negotiation skills are table stakes, a given for a modern-day executive. But it's important for the CEO to know that the top technology exec is part of the team. It's that alignment thing, again: Are we all driving toward the same goal? As for more, well, personal personal characteristics, most respondents say CIOs need to sharpen their public-speaking skills. That includes improving (or actually acquiring) a sense of humor, such as being able to tell a joke every now and then. A style point: 35% of CXOs say the CIO should try to come across as less of a "techie." In other words, drop the acronyms and the code-jock jargon and brush up on your business lingo. That brings up a significant issue: How technical does a technology manager need to be? Most respondents see their CIOs' greatest tech asset as their ability to support collaboration. That makes sense: An army runs on its stomach, as Napoleon famously said, and a company runs on its e-mail system. Note that only a third of CXOs and LOB managers see supporting collaboration as critical to a CIO's effectiveness. E-mail, table stakes--you get the idea. As for knowledge of cutting-edge technologies, that seems to be a CIO thing: 42% point to that with pride, but less than a third of CXOs and only a quarter of both LOB managers and IT staff consider it important. Nonetheless, more than a passing knowledge of technology is necessary to function as an effective CIO, says Susan Mersereau, senior VP and CIO of forest-products company Weyerhaeuser. "You need to understand the questions you need to ask," she says. Otherwise, you end up with technologists talking over your head. The danger: "Long-term investments that are mistakes." A significant number of line-of-business managers, 67%, want their CIOs to help their companies choose the right technologies. Unfortunately, only a little more than a third, 37%, think their current CIOs do that. If LOB managers are asking for help, give it to them. As more enterprise-grade technologies are available to end users--such as software as a service, application mashups, and social networks--more LOB managers will take those projects on themselves. That presents the CIO with a choice: Sit back and wait, hoping that Web 2.0 is a fad, and LOB managers come skulking back to IT with their tails between their legs. Or get out in front and guide the selection and implementation process. Sure, it means more work on the front end, but it means less of an integration nightmare on the back end and ultimately more influence throughout the enterprise. GOOD NEWS, BAD NEWS The good news is that most executives believe IT departments, both their own and those in general, are delivering business value to their companies. Also, IT departments are successfully accommodating business demands with the resources they have. And more than half of CXOs say CIOs are able to handle the demands of business strategy while managing their operations. The bad news is that characteristics closely associated with the CIO of the future--externally customer focused, globally oriented--scored very low for CIOs in general. The percentage of respondents who identified an effective CIO with "visits often with company's customers" and "understands global competition" was in the single digits, and that was across the board. However, the numbers are significantly higher when CXOs refer to their own CIOs, and they refer to themselves: A quarter of top tech execs say they visit often with their companies' customers, and 35% of CXOs agree; almost half of CIOs (48%) say they understand global competition, and 39% of CXOs agree. It could be that many CIOs already realize the importance of these externally focused efforts. More should. Alignment oriented, process savvy, innovation driven, customer focused--these are characteristics that contribute to the overall effectiveness of the top technology executive. What else? "The ability to simplify complexity," says Weyerhaeuser's Mersereau, which is an answer that makes its own point: It simplifies the complexity of the question. And that makes us think Ms. Mersereau must be a highly effective CIO.
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