Every CEO needs to strike an important balance with regards to the IT department. In an increasingly digital world, IT cannot be treated as a black box. On the other hand, the CIO must be given the autonomy to do his or her job. [See also: The differences between a CEO and CIO - What CEOs know and CIOs don't]
CEOs who don't take a close enough look at IT are depriving themselves of an important tool. Non-Executive Director of several organisations and former CEO of Nominet, Lesley Cowley, says: "I sometimes see CEOs who place too high a reliance on their CIOs without ever fully understanding the CIO role and the potential of the CIO themselves. When working well, the relationship between a CIO and a CEO can be a powerful vehicle for business transformation."
Cowley, who was awarded Officer of the British Empire for her services to the internet and e-commerce, recommends: "In general, I think that many CEOs could do with spending quality time with their CIOs in order to ensure that together they fully realise the transformative power of IT and appreciate and understand the challenge of moving from current IT state to desired future state. Particularly where the CEO is not fully IT literate, they can underestimate the level of that challenge."
Although CEOs should take a close look at IT, they should be careful not too get in the way. Global CIO of International Federation of Red Cross and Red Crescent Ed Happ said: "A CEO ought to be asking two questions about the IT department. Is my CIO doing the right things to reduce costs? Is my CIO doing the right things to add value to the business? If you can't answer both of the questions affirmatively, either you don't have the right understanding of the technology behind your business, or you have the wrong IT department."
Should the CIO have a seat on the board? Although most CIOs may think they have a seat as executive director, most of them aren't offered the position. Executive recruiter at Harvey Nash Iain McKeand says: "It's still a bit of a challenge for CIOs to get a seat on the board. Innovation is always in the forefront of most of the organisations we hire for these days. Sometimes the CIO candidate is asked to come in and present his or her thoughts on something like Internet of Things to the board. Organisations want the comfort zone of having a CIO who's accessible. They want an IT director who can present technology in business terms to the board."
Where does the CIO role fit into the organisation chart? Should the CIO report directly to the CEO? Again most CIOs think so - and some even insist. Met Office CIO Charles Ewen says: "I would never work for an organisation where the CIO reports to the CFO or the COO. For me, that's an indication that the organisation doesn't understand the pervasiveness of technology and the importance of grasping technology at a structural level." [See also: CIO reporting lines - 56% of CIOs report to CEO in 2016 CIO 100]
Wherever the CIO sits on the organisation chart, the CEO should learn from his or her CIO. Ed Happ reckons: "If all businesses are digital businesses, then CEOs need to be more and more digitally savvy. And one of the people who can help them become more digitally savvy is their CIO. A question for the CEO would be, ‘How can I be an effective student of my CIO?'"
Every CEO should learn at least three things from the CIO:
1. A basic understanding of IT
Every business is a digital business. Just as they need to have basic knowledge in finance, CEOs should also have a basic knowledge in technology.
According to Charles Ewen: "A CEO takes it for granted that they have to have a working knowledge of financial structures and disciplines. You don't refer to your CFO basic questions or decisions about finance. Increasingly, the same is true around innovation and technology. Think of IT like Finance. Think of these two areas as basic knowledge that you would never be able to perform a chief executive role without."
Lesley Cowley says: "I think that the brilliant CIOs I worked with as a CEO helped me to learn and fully understand both the potential and the complexity of IT systems and how they can transform a business and support its strategic direction. Now that I've moved into chair person and non-executive director roles, I find that I'm easily able to draw upon that knowledge and experience to support and challenge the executives on the boards I serve on."
2. Business transformation and change management
The CIO is constantly on the lookout for ways of transforming the business through technology. The CIO knows better than anyone in the organisation that the only constant is change - and that change is occurring at an ever-increasing rate. CIOs can teach CEOs about business transformation and change management.
Executive recruiter Iain McKeand reckons: "CEOs have an idea of what technology is about. But they need somebody to explain how it works and how it can be used to transform the business."
As CIO Charles Ewen sees it: "Change and the increasing acceleration of change aren't going away. CIOs are used to the idea that change is a fact of life and that the rate of change is increasing continuously."
3. Cost cutting and supplier management
CIOs know an awful lot about supplier management and cost cutting. CEOs can learn from this.
Iain McKeand says: "A lot of CIOs are very, very good at vendor management. That's not just keeping costs down. CIOs might come up with a paper on how to cut IT expenditures by 10%. HR will come back and ask if that involves headcount. It usually doesn't. It's usually about squeezing the supplier.
CEOs are saying that all sections need to cut costs. They look at the CIO as a good example, because CIOs know how to cut costs. Often CIOs look at the supplier model and cut costs by reducing the number of suppliers. So the CEO asks why other parts of the company can't follow suit."
One final question that's important to include in any discussion about CEO and CIO roles: Should CIOs want to move into a CEO role? Lesley Cowley says, "I do think that CIOs should think about what they can learn from their CEO. I would like to see more CIOs with ambition to move into the CEO role and gaining knowledge, skills and experience to help them get there." [See also: From CIO to CEO - CIOs who made the step up to become CEO]
But Ed Happ begs to differ. He thinks CIOs shouldn't necessarily have ambitions to become CEO. In Happ's opinion, "The CIO role is a noble role."