In the 2016 CIO 100 56% of CIOs reported to the CEO or equivalent, and according to the 2016 Harvey Nash survey more CIOs report directly to the CEO than ever before (34%), and more have seats on the board than ever before (45%). This is good news for current and aspiring CIOs, because it gives the more headroom for career advancement. But the less agile IT directors may find themselves bewildered in increasingly shaky environments where job objectives have become moving targets. [See also: The three things every CEO should learn from the CIO]
So what's driving this evolution? And how does the reshaping of the IT role change what's expected of a CIO?
One of the biggest explanations for the growing importance of the IT role is that most CEOs and boards expect that in the near future their industries will be "substantially or unrecognisably transformed by digital." This was one of the findings of a CEO survey published in April 2016 by Gartner. According to Gartner: "Our survey finds that most frequently, CEOs now understand that digital business is substantial enough to warrant them leading it personally. If they delegate primary responsibility then the next most likely leader is the CIO."
Many CEOs now want their CIO as close to them as possible - and executive recruiters, like Caroline Sands of Odgers Berndtson, see the change in the nature of the job orders they get. According to Sands, "CEOs recognise the need for CIOs to shift from operational focus to a focus on revenue generation, and are therefore seeking out a different profile. They want candidates who can take a 360-degree view of the business and find new ways of applying technology."
But are CIOs ready to rise to the challenge? And do they generally understand the expectations of their CEO?
Former CEO of Nominet Lesley Cowely says: "Yes, generally they do understand. However, expectations can change over time. So I recommend regular good dialogue between a CEO and CIO to set and agree on mutual expectations. I'd also suggest that CIOs need to understand the expectations of other people - their chair, their peers and their team, for example."
As the IT role shifts within an organisation, so does the influence of the IT director. With new reporting lines putting more IT directors on the same level as the CFO and the COO, CIOs have to change the way they communicate with these other executives.
When asked if CIOs lack communication skills, Cowley says: "They should not. But yes, sometimes they do. Over my long career I have often seen problems around communication in leadership teams. These tend to be down to the people themselves or the business circumstances, not necessarily as a result of any of them being in a particular role."
"Senior leaders often spend lots of time, effort and money on developing their professional skills, whether they be in IT, or something like Finance," says Cowley. "But they neglect to sufficiently develop their people and communication skills. At times of stress and change, it is the people and communication skills that can really make a difference."
So CIOs need to brush up on their communication skills. But they also need to perform a new balancing act between keeping costs down in operations and generating revenue through new business opportunities. CIOs are still stuck in an operational role. But at the same time, they have to look for new ways of applying technology for business transformation.
As if that weren't enough, cyber security is now more important than ever. Many companies have been embarrassed in the media by breeches. So CIOs can't take their eye off the ball when it comes to security. But at the same time they have to rise up and meet a new set of expectations to transform the business through technology.
How do successful CIOs find ways of transforming the business?
Transformative CIOs pay more attention to direct customer feedback to get ideas for business change. They look at new delivery channels for reaching out to the customer, for taking payment, and for delivering products and services. Transformative CIOs look for new ways of managing the supply chain. Information has always been king when it comes to supply chain management. So it's natural to use technology to reduce uncertainty in demand, and to reduce delivery time. Last but not least, transformative CIOs look for new ways of using the data already available to deepen their organization's understanding of their market.
This new way of thinking is not easy for everybody in IT. As Caroline Sands puts it: "It's hard for CIOs who were trained in computer science or hard science to take the 360-degree view needed to lead digital transformation. That's probably the reason so many of the successful CIOs these days have done their studies in other things, even things like psychology or religious studies. Taking a 360-degree view means you have to understand the business from different angles and find synergies in very creative ways."
But when it comes to what CEOs expect from CIOs, some things never change. Digital transformation aside, IT directors still need to demonstrate good, old-fashioned leadership. "Performance, leadership and honesty are at the top of my long list of what CEOs expect from CIOs," says Lesley Cowley. "As CEO, you need to know that the CIO will drive the best performance of their team. You expect them to show leadership, particularly at times of change. You also expect honesty, in terms of own performance and their team's performance. And you expect them to admit, when necessary, that things have gone wrong."