IBM's recent study into how members of the C-suite are working together to prepare for the digital era contains some key takeaways for CIOs who want to play a bigger role in shaping and leading the digital transformation of their organisation. The report, Exploring the Inner Circle, is based on face-to-face interviews with 4,183 CxOs from around the world and explores what makes an effective C-suite, how C-suite members interact with each other and how this impacts on financial performance.
So what does the IBM research mean for CIOs and perhaps more importantly what can CIOs learn from these results that may help them firmly establish themselves as a member of the CEO's inner circle?
The CIO is the third most strategic member of the C-suite. When asked which roles are involved in developing their organisation's strategy, CEOs put the CIO third on their list behind the CFO (72%) and the CMO (63%) with 42% listing the CIO as being a contributor to business strategy. Now, whether you see this as a good or a bad thing probably depends on whether you glass is half full or half empty. The positive slant is that CIOs are in the top three. The negative view is that they are quite a distant third and less than half of CEOs include their CIO in the development of strategy.
The CIO is the most specialised member of the C-suite. IBM asked the respondents whether they had experience across a range of business disciplines such as strategy, finance, marketing and IT. A small number of CIOs indicated they had experience in strategy in addition to IT but otherwise the CIO respondents had no other non-IT experience. It is worth pointing out that a number of other C-suite roles appear to have limited experience outside of their own discipline although at least some of the respondents from other functions indicated they had experience in at least two other areas. And another point of note, bearing in mind the first takeaway is that, other than the CEO, the CFO and CMO were the two roles with the most diverse range of experience outside of their own specialisms. So there is at least a correlation between involvement in strategy development and breadth of business experience, if not causation.
The ability to collaborate is the most important attribute for success. CEOs placed collaboration – defined as collegiality, teamwork and alignment – above factors such as honesty, shared purpose and communication skills when asked what made an effective C-suite. And given that 50% of CEOs listed collaboration as a success factor compared to 27% for honesty, which was the second most popular response, it is clear to see the importance that CEOs place on the ability of their senior team to work together.
So what does this mean for CIOs? Much has been written about the challenges facing CIOs who want to be more strategic but find that the majority of their time is spent on managing the organisation's existing applications and infrastructure. And while the IBM study didn't directly explore the reasons why some CxOs are less likely to be involved in developing strategy, the additional comments made by respondents do seem to point to the fact that some executives are considered too operational to be included in more strategic matters. The need for CIOs to move away from the day-to-day running of systems so that they can play a bigger role in shaping and leading the organisation is a subject I have covered on a number of occasions in my blog and in my book Disrupt IT.
Delegating responsibility to the next level of management, increased use of partners, and migrating as much as possible to the cloud are all potential routes for CIOs to free up their own time as well as other resources to focus on the organisation's strategic initiatives. It is also hard to ignore the correlation between breadth of experience and involvement in strategic discussions. It seems logical that the more an executive can contribute to broader business discussions outside of their own discipline the more value they are likely to offer as a member of the CEO's inner circle, involved in setting the organisation's direction and contributing to the big decisions that need to be made along the way.
This is why I believe that CIOs in the digital age need to have broader experience than has been required in the past. The digital business focuses on how technology can be used to create new business models, products and services. The CIO also has to have this focus and be able to contribute to the debate about how the organisation can use technology to create value and grow revenue. To do this they need more than just technical knowledge. CIOs need to add broader business knowledge and experience by spending time outside of the IT function at some point in their careers and by regularly spending time with their C-suite colleagues. And, if they have successfully freed up their time by reducing their involvement in day-to-day activities, then they should find it is something they have the time to do.
Regularly spending time with the rest of the CxOs is also the first step towards being able to collaborate across the C-suite. CIOs cannot influence or collaborate with their peers if they do not engage with them on a regular basis. And with other business functions becoming more involved in technology and spending an increasing proportion of their budgets on IT, the only way CIOs can ensure that they are still able to set the overall direction of the organisation's investment in IT is to work with them as a partner who facilitates as opposed to a gatekeeper that controls. That means adopting a collaborative style to technology decisions.
Overall though the IBM survey confirms that the digital era presents CIOs with an excellent opportunity to grow their influence and become a key member of their organisation's inner circle. But with that opportunity comes the need for change in how the CIO spends their time and how they work with their colleagues in the C-suite.