The changing CIO role spells both danger and opportunity. CIOs who focus too much on technology and not enough on business may see their careers take a downward path. On the other hand, those who take a broader view of IT and embrace the business can move into bigger roles, including COO or CEO. [See also: From CIO to CEO - CIOs who made the step up to become CEO]
We often hear that CIOs should start thinking more like CEOs. But that's easier said than done. Consider the contrast in personality types. While there are a few CEOs who are introverts, most are extraverts and fit naturally into a role that requires constant interaction with diverse groups of people. Those CEOs who are introverts have to overcome their introversion to step into a role more suited for extraverts.
Research from Joe Peppard at the European School of Management and Technology in Berlin panders to the stereotype that CIOs are more likely to be introverts, tending to get bogged down in detail and ignore the big picture. While introversion is not a showstopper, it certainly doesn't help when it comes time to step into a CEO role.
Consider also the differences in the career paths it takes to get into the respective jobs. Most CEOs have some experience in a finance role early in their careers, and very little hands-on experience with technology. CEOs need to understand cash flow, since cash flow is the basis for any business.
By contrast, many CIOs had hands-on experience with technology early in their careers, and little experience with finance. CIOs, traditionally at least, needed to understand the evolution of technology, since adopting technology at the right time will make or break an IT department.
Finally, consider the differences in the attributes of the CIO role versus those of the CEO role. CEOs operate under a revenue and profit model - budget is allocated to ensure next year's revenue and profit; CIOs typically manage under a cost centre model - budget depends on last year's revenue and profit.
Management attributes are different from one position to the other. The CIO has to manage a team of technologists. The CEO has to manage a team of people with a range of skills. Communication attributes are also different. The CIO generally only communicates to the outside world about technology and transformation. The CEO has to communicate to the outside world about a variety of subjects - and he or she is one of the principle symbols that bolster (or damage) the corporate brand.
Despite the differences in personality types, career paths, and job attributes, there are several cases of CIOs who have become CEO. But sometimes the move doesn't work out so well. For example, Philip Clarke was a CIO and then became CEO of Tesco. He was replaced in 2014 for poor performance. Perhaps his poor performance was a result of his thinking like a CIO, although it is worth noting his background was coming up through the company at Tesco and not the archetypal route to the CIO role.
Justin Menkes sheds some light on what it takes to be a successful CEO. He spent a lot of time recruiting CEOs for Fortune 500 companies and authored the book Executive Intelligence: What All Great Leaders Have. Menkes says the best leaders understand that the right answer is the group answer. Great leaders know how to get a group to come up with the right solutions to the problems facing the company. Unfortunately, this kind of leadership is often challenging for CIOs who tend to find answers themselves. Often unknowingly, the CIO imposes those answers on their teams.
This difference in behaviour comes down to one other striking difference between CIOs and CEOs: CIOs are more likely to be specialists, whereas CEOs are more often generalists. One important consequence of being a specialist is that specialists tend to take a stronger position in a discussion. As Matt Graham-Hyde writes in his book The Essential CIO: Why The CIO Needs to Act Like the CEO: "IT is an expert knowledge-based function and the people who work in IT roles have their livelihoods tied to the success of the technology in which they are expert. More than their livelihoods, their personal equity and intellectual value are tied to these technologies. Generally I found IT people to be great at taking a technology position and then defending it to the end."
Justin Menkes says that even if a CEO is the smartest person in the room, he or she should avoid providing answers. "If you give them the answer, it may save you a day, but it will cost you three months in execution. If your staff comes up with a good answer themselves, they will bust their butts to prove they were right."
But what do you do if your staff comes up with a solution you think is clearly wrong? Menkes says great CEOs will ask questions that will cause their staff to see that the solution is less than optimal. According to Menkes, successful CEOs are good listeners. Less successful CEOs are too smart. They stop listening and start telling.
Despite the gap between personality types, career paths, and job attributes, more than ever CIOs need to start thinking more like successful CEOs, Matt Graham-Hyde believes. "If you get up every morning thinking, 'I am the CEO of this' you will start to adopt different behaviours and look for different opportunities and outcomes for your IT business," he says.
Once again, this may be easier said than done. The most challenging aspect of leadership for CIOs is that they have trouble with the idea that the right answer is the group answer. Successful CEOs know this. Most CIOs don't.
Next page - Nick Booth's 2010 article on the differences between CIOs and CEOs > >
Nick Booth's 2010 article on the differences between CIOs and CEOs is included below. To what extent has the situation changed since the turn of the decade?
The role of chief executive officer is now seen as an achievable goal for ambitious chief information officers, but apart from the greater responsibility of the former and the tech-specific scope of the latter, what are the differences between the two and how can IT leaders scale the heights of company leadership?
One crucial difference between a CIO and a CEO can be found in their reaction to the press. During the dotcom boom, one travel company CIO, asked what he thought was a silly question about his use of open source software, threw a tantrum and flounced off. This illustrates one of the crucial differences between a CEO and a CIO. A CEO must deal with everyone and speak everyone’s language. A CEO could never get away with being so blinkered or precious about technology.
On the other hand, there are chief information officers who undoubtedly have the right stuff to become chief executive officers, and anyone wanting to make the transition may want to take note of the hallmarks of each calling. The differences between a CEO and a CIO are real in some cases but only perceived in others.
Psion chief executive John Conoley says a CEO’s role is a 360-degree view, which calls for some skills in every aspect of business. “The CIO role is maybe 355 degrees,” he says.
The CEO is more likely to see IT as a support system. In the battle for business, the CIO might regard his technology as an offensive weapon. The CEO will want to know how information and IT can support his vision and strategy; the CIO wants to know how information and IT can drive the strategy, he argues.
To the CEO, business is about people, cash and customers, with each taking priority at different times, depending on business circumstances. The good CIO wants to help the business see what is possible and help stretch the strategic thinking.
The CIO must see the entire value network and manage IT on a platform or network basis. They should be a salesperson, an innovator, a mini-CFO and a great collaborator. But the CEO, however, has to be a dictator in some respects, albeit a benevolent one.
The CEO needs to be a spokesperson, a director and a great judge. In the orchestra of business, the CEO is like a good conductor, says Conoley, bringing all the instruments together in harmony and getting them to create something moving.
Managed service provider Star has produced a series of Frost Report-style class-system skits on the hierarchy that exists between a CEO, a CFO and a CIO. The most poignant line comes from the CIO, who says he looks up to the CFO and the CEO, but that he could lead the strategy if he had the inclination. The CEO, meanwhile, confesses that he leads the strategy, but doesn’t understand how the money is spent on IT.
Alan Mumby, head of the CIO/CTO practice at international headhunter Odgers Berndtson, outlines the differences in perception among his clients.
“The CEO has the leadership breadth over several diverse functions, while the CIO has a narrower range of vision,” says Mumby. “They should extend focus to the whole business, but they rarely sustain that vision for their tenure.”
The CEO turns left after getting on a plane, he says. The CIO turns right. The CIO watches the on-board entertainment system, while the CEO rarely has time.
There are differences in attitude as well as in job titles. “If you are a CIO, you will continually get dragged into the detail,” says Mumby, “but an adept CEO rarely does detail.”
The CIO may often expect the day to go badly, as they focus on service management issues. On the other hand, a CEO expects the company to rise above daily issues. He or she will focus their energies on higher matters than the humdrum daily transactions.
On the same theme, both chiefs are pigeonholed by the expectations of them. Both are weighed down, but in different ways. The CEO’s success is measured in at least half-year slices. The poor CIO, however, is measured by colleagues daily – when their PC fails to boot up or when they can’t find their tools in a new application. This exemplifies the strategic/tactical difference that often exists between the two roles.
By the same token, CEOs are measured for the good things they generate. The success of the CIO is often gauged by the frequency of bad events or failures to deliver on someone else’s promise.
“CIOs are aspirant CEOs who took an erroneous, technical career-turn sometime in the past,” says Mumby. In reality, however, the best CIOs are starting to invade the board after demonstrating people skills, strategic vision, a propensity to deliver and an unusually good commercial understanding.
Claire-Louise McSherry, founder and director of headhunters McSherry-Brown, agrees. “Karl Landert, the CIO at Credit Suisse, is a good example,” she says.
Not everyone can be like him, however, and Odgers Berndtson’s Mumby concedes that executives from a technology background can find it hard to leave the bits and bytes behind. “Most IT directors or CIOs fail to carry it off and get dragged down into the technical weeds,” he says.
Any conversation between a CIO and a CEO illustrates the essential differences between them, says Nigel Hughes, a consultant at Compass Management Consulting.
According to Hughes, the CEO will ask: ‘How do I reduce my costs?’, to which the CIO will typically respond: ‘What services do you want me to provide?’
“The CEO always wants better than we have today, but for less money,” says Hughes. But from the CIO’s perspective, it’s a question of priorities. It’s a choice between more services or higher quality.
This is where there is something of a gulf in knowledge. The CIO will explain that he has cut the cost per transaction, but that volumes have gone up. With more volume of work, the department needs more money. But CEOs don’t understand that. Or if they do, they turn a blind eye to the issue. The CEO just repeats the question: “How do we cut our costs?”
According to Compass’s own studies (Compass FactBase) its sample of CIOs have lowered unit costs over five years, but the volume of work has increased. For example the unit costs of storage are down by an average of 83 per cent, but the CIO is punished for their success as volumes have increased by 667 per cent. The CEO only sees the bottom line on the CFO’s report which says that overall costs have gone up 34 per cent.
According to Hughes, the dramatic tension that exists between CIO and CEO is that the former always wants to expand his or her remit and offer more services. But the CEO just wants them to get back in their box and cut costs. Maybe they suspect that if the CIO fulfils their potential, they could do the CEO’s job.
Often CIOs and CEOs have one very relevant thing in common, says headhunter McSherry, who places CIOs in the financial services industry. “They both see every aspect of the business. But the CIO rarely exploits that knowledge,” she says.
Good news for the CIO is that they will not be under the same pressure as their bosses. “CEOs worry about ending up on the wrong side of history,” says Ram Menon, executive VP at Tibco Software. A CEO can get the sack if the share price is down. The CIO is not under that pressure. But they must constantly reinvent how real-time information is used to ensure the right decisions are made by the CEO.