There is a profound shift taking place across the board rooms of UK businesses with the increase in appointments of chief operating officers (COO) from a technology background. [See also: COO Sheila Flavell explains why CEO is a natural next step for CIOs]
During 2013, we saw CIO to COO moves for Chris Taylor at News UK and Kevin Carrick at Local World amongst others.
Arguably one of the C-suites toughest roles, the COO has the mandate to transform by helping define the strategy that underpins a CEO's vision, and take the lead in implementing it. But this role has typically been recruited from finance, marketing or logistics functions, so what are some of the factors that are influencing this shift?
At the Word Economic Forum in Davos, business leaders ranked technology as their number one challenge for the year ahead, a sentiment backed up in the 2013 survey of CEOs by IBM that showed how technology had moved from fifth to the most important area for them to address.
So, it makes sense that many leading businesses are looking for commercially savvy technologists to lead enterprise-wide transformation.
Head-hunter, Simon La Fosse, has found that there is an increasing demand for senior technologists to step up to wider board roles. He said: "Good CIOs are great managers of perpetual change which positions them well to move into a COO role. When you also consider the digital challenge that sits at the heart of business strategy today it's not surprising that we're seeing an increased demand for those who can transition into this role. Looks to me that CIO stands for Career Is Optimising."
Leadership development expert Nigel Percy has found from working with a range of business leaders, CIOs are well suited to COO roles as "they are able to work seamlessly across varied functions and are able to flex to communicate and influence different personality types".
There is also evidence of companies retaining top CIOs by promoting them to the role of COO or adding additional duties such as logistics or procurement. But, this is no knee jerk reaction to the digital march that is seeing CIOs propelled into the COO seat, a good CIO should possess some key qualities that make them well suited:
- Rigour; CIOs are not afraid of detailed analysis, problem solving, identifying options, carrying out risk assessments and continuity planning. They have typically been placed in roles of stewardship and responsibility and have good understanding of regulatory requirements, and so are in positions of trust.
- Execution; CIOs are team players, adept at planning, breaking work into logical workstreams, assigning ownership, setting milestones and delivering operational services in parallel with transformational change. The best CIOs thrive on the challenge and the constant change that technology brings with it and tend to be strong at procuring and managing third party services and gather insight from data needed to make good operational decisions.
- Know, and are able to articulate, the art of the possible; CIOs are uniquely placed to see the entire business in ways that others are not, synthesising technological shifts with product development and consumer insight in order to identify ways to better use technology to serve customers, improve safety, cut costs or earn revenues. Whilst the COO does not have to make technology decisions or run the company infrastructure they need to show where to make strategic technology bets.
Sophie Relf of Jobsite believes that there is an increasing demand for senior technologists to step up to COO roles. "Many of our clients have unprecedented digital challenges within their businesses - since 2009 there has been a 170% increase in the number of senior technology vacancies - so there is a real need and desire for good ones to step up to COO. There are fantastic opportunities out there for candidates who can handle the fast paced changes that a COO has to deal with."
A recent survey by Deloitte found that a third of CIOs aspired to the COO role as their next step and concluded that the CIO has "never played a more prominent role in the boardroom". As more companies realise the power of technology and appreciate those effecting technological change – so the ambition of the CIO has rightfully grown.
Robin Young, COO of Mitchell and Butlers who first made the CIO to COO journey back in 2003 while in the banking sector, agrees that it's a highly satisfying move but argues that people skills are the biggest challenge for most CIOs. "With such a simple change in title, just the letter I turning into a letter O, one would imagine that the step wouldn't be too challenging. There are many elements of the COO's world that work beautifully with all of the technology and change skills developed over a period of years. Planning, budgeting and getting difficult things delivered consistently all neatly support the move. The more stretching parts are all around people and the ability to really let-go and focus on the bigger picture. Most technologists are control-freaks who like landing big programmes, that's why they are successful and remain at the top of their game. The best COOs are brilliant people developers and spend their time coaching and delegating, allowing others to get things done and avoiding (my toughest challenge) jumping in to help."
So for the third of CIOs that aspire to general management, here are five practical tips to consider in preparation for the next move.
1. Understand the economics of the business including the metrics and KPIs that ultimately drive profitability. Take time to read management accounts, interrogate colleagues when the narrative and the data do not match and put yourself in the shoes of an investor looking at your company.
2. Explain technology in context, not from the perspective of infrastructure or applications, but on product features, consumer needs or social impact.
3. Seek additional responsibilities, or ownership of a project, outside of the technology domain.
4. Hone your communication and influencing skills. Get a mentor, either from inside or outside your current organisation and seek impartial advice, feedback and coaching.
5. Ensure the succession plan you have put in place is credible with other members of your senior management team. It can be a difficult balancing act to find the right person with whom to co-exist and will usually be done in close consultation with the CEO or talent/HR director.
CIO and COO are great roles in themselves, but with the focus increasing on technology in business, ambitious CIOs won't stop there. For many, COO will be a stepping-stone to the top job as technology continues to be a key determinant of success.
Former Daily Mail General Trust CIO David Henderson is COO at Evenbase