In-depth: The evolving role of the CIO

Jan 2, 2001
Auerbach Analysis

Summary prepared by TechRepublic's Loraine Lawson

Would you encourage your child to become a chief information officer?

Jerry Kanter, executive director of the Center for Information Management Studies (CIMS), recently asked that question of former CIOs. While all agreed the job was challenging and rewarding, the question gave them pause, according to Kanter.

"Their reactions included a great deal of body language that conveyed feelings of ambivalence," Kanter said. "Responses were that, if there were no changes in the environments from which they had just retired, their advice would be negative."

And yet, the CIOs all agreed that the role of the CIO is rewarding and will improve as business units share more responsibility for IT decisions.

Kanter discussed this and other issues with CIOs in "Messages from the past, lessons for the future: In-depth interviews with successful veteran CIOs," an Auerbach Publications article.

He interviewed six former CIOs for the article. All were veterans who had worked in the role for at least four years, and one for as long as 14. That's well beyond the current average of between 24 and 30 months, Kanter noted.

The article provides a glimpse into the minds of successful CIOs and examines:

To read this in-depth Auerbach article, continue to page 2.

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Messages from the past, lessons for the future: In-depth interviews with successful veteran CIOs
Jerry Kanter

I interviewed six former chief information officers with whom I had worked and been associated. The purpose of the interviews was to encourage the CIOs to look back at their careers and reflect upon what worked and why, and what they would recommend to those considering information technology (IT) as a career.

Editor's note
Jerry Kanter is executive director of The Center for Information Management Studies (CIMS) at Babson College in Wellesley, MA. CIMS is a consortium of industry professionals and academic leaders working together to promote the effective use of information technology. CIMS provides its corporate members with access to educational programs, including conferences and workshops, ongoing research, working papers on a wide variety of topics, and a growing network of IT professionals. Kanter is in frequent contact with CIOs in organizations of all kinds, which allowed him to conduct these interviews.

I do not suggest that this was a scientific study, nor do I imply that the selected sample represents a cross-section of CIOs. One might agree, however, that the six have enjoyed considerable success. They have recently retired from their CIO responsibilities but continue to be productive in part-time consulting roles. With the current CIO job tenure between 24 and 30 months, my interviewees were each in their last CIO job for over 48 months.

The interviews were about two hours long and were held in the CIMS offices at Babson College.

An interview guide was used, but in an unstructured way so as not to interfere with the free flow of conversation. The conversations were candid and straightforward, and everyone had time to reflect upon their business careers. They were not thinking about their next meeting, their company's latest organizational move, or a new business alliance. They could concentrate on their answer to each question.

Also, each CIO was told that the discussion would be confidential, with no names mentioned in the report. I believe this added to the objectivity of the interviews.

CIO backgrounds
This group of former CIOs differs dramatically from today's CIOs. Members of the group held their positions from four to 14 years, significantly longer than the short CIO job tenures of today. They shared expressions of company loyalty, feeling that they owed their companies something.

They also admitted to observing a cultural change brought on in recent years by the proliferation of business alliances, mergers, and a propensity to cut costs via downsizing. Professional loyalty has replaced company loyalty.

These CIOs had been with an average of three companies over their careers; this contrasts sharply with current practice. All save one had long stints in management positions outside of IT. Their careers have been split almost evenly inside and outside IT. They have been marketing managers, manufacturing managers, financial executives, and general managers. All indicated that this background proved essential for IT success, though they realized this retrospectively. They are a bit leery of current CIOs who entered, remained, and worked their way up the IT ranks without work experience in other parts of the business.

One of the interviewees, however, thought that CIOs could be successful without a formal stint in an operating unit. He cautioned that you have to "get out of your cubby hole" and work with business units while remaining organizationally in IT. This was true of the IT people as well as the CIO. Technical people should look at projects as learning experiences in understanding the business side of applications.

This particular CIO took a special yearlong course in the industry in which his company competed and then wrote a lengthy report on how the introduction of minicomputers could add value to the business. He showed this to the company president and shortly thereafter was appointed CIO. He remained in that role for seven years prior to his retirement at the end of 1997.

Is being a CIO rewarding?
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While active participation in the business appears to be essential, it is possible to participate in the business while remaining in the IT organization. One CIO stressed that it was not only important for IT people to work with the business units, but also to work directly with the company's external customers—the best way to understand business requirements.

The professional with an IT-only background was viable in the old glass house days when IT was akin to a centralized factory, collecting and processing business transactions, then turning out shipping notices, sales orders, invoices, and so on. But, the CIOs emphasized, it is now a different game brought on by the distribution and democratization of the IT function. Management trust and confidence are essential; these are earned and result from strong ties to the business unit leaders and a solid understanding of business and management dimensions.

The changes described are the cause of the rapid burnout rate of today's CIOs. During the transition from the glass house, the CIO had to fill both technology and business roles. This took a great deal of energy and time; when combined with massive business changes and the technology revolution, the CIO position was under constant pressure.

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This article first appeared in the July 1999 issue of IT Performance Improvement. It appears here under agreement with Auerbach Publications. For more information on Auerbach publications, click here.
The changing role of the CIO
I asked the CIOs to think about their careers and to indicate the relative importance of three major elements: technology, business, and management. How has the combination of these elements changed over the years?

There was agreement that technology was the key ingredient in what was described earlier as the production phase of IT. But with the distribution of IT to the operating departments, the emphasis shifted more to business and management. This shift, however, did not materially lessen the importance of the technology factor. Indeed, the shift to client/server architecture in support of distributed environments led to a proliferation of hardware and software that required a rethinking and a realistic understanding of the technology needed for the enhanced role of IT.

The CIOs agreed, however, that the new base points for CIO success lie in an understanding of their changing business and management roles. Success is determined by key business managers' perceptions as to whether or not IT is adding value to their operations and to the company as a whole.

All the CIOs used the phrase "adding value." They agreed that the focus is not so much on cost as it is on value, the top line versus the bottom line. The phrase "project pull" versus "budget push" characterizes this changing focus.

The changing role of the CIO caused a rethinking of management style. To succeed, it became necessary to gain the trust and respect of key business leaders and managers, including, of course, the CEO.

The starting point was gaining an understanding of what business processes were important to the business managers. This involved a fundamental shift in how the CIOs spent their time. Their internal IT focus changed. More time needed to be spent outside the glass house (now no longer a glass house), working with key operations people to accomplish the applications they deemed important to the business. A senior executive said to one of the CIOs, "Once we establish a trust level, we can take risks together, and that is where the real value lies."

The word "leadership" came up in every interview. The CIOs referred to leadership both inside and outside IT. Internal leadership was necessary to gain the confidence of the IT personnel who would be doing the systems work and delivering the applications. Respect and confidence in IT leadership was mandatory, whether the IT staff was working directly for the business unit or in the IT department.

The CIOs noted a shift occurring in the leadership role. They agreed that more emphasis must be given to proper delegation and placing more control in the hands of the work teams. They cautioned, however, that this does not mean a laissez-faire approach to leadership and management.

They also noted that leadership is needed outside IT, on a company-wide basis. Individual applications must fit into the overall IT architecture, particularly if a company is implementing the increasingly prevalent enterprise-wide applications.

Organizational "fit"
The reporting levels of the CIOs were mixed; half reported to the CFO or an administrative VP, and half directly to the CEO. They all agreed that the trend is toward the latter, and all felt this would become the only way to operate.

One of the CIOs who reported to a CFO indicated that this was a main reason for his retirement. He felt that the "financial mindset" was not the proper framework from which to view the overall positioning of IT. A CIO who reported to an administrative VP felt the reporting structure served for a while as "political protection," but eventually the negatives outweighed the positives.

Another view held by several of the CIOs was that, with the need to be both inside technologist and outside business leader, the IT function should be split, particularly in large companies where the business was primarily information-based. (As an aside, they indicated that more companies are becoming information-based.) Their thought was to have a chief technology officer (CTO) manage the technical infrastructure and network, with a chief information officer concentrating on the business needs in concert with key business managers. The CTO could report to the CIO who, in turn, would report to the CEO.

We spent a good deal of time discussing the subject of IT governance. Much has been written about the centralized versus the decentralized approach, or the "federal" model. Here, certain functions become the responsibility of the "central government," that is, IT, with other functions the responsibility of the "citizens," that is, the business people. (I grimace when I say this, because the implication is that IT people are not part of the business.)

Consistent with the above thinking, the sentiment was expressed that one should remember the IT function is still based on technology, and the department must be properly staffed with the right skills mix. The CIO, or CTO, must provide leadership for a technical staff that is becoming increasingly important as it becomes increasingly scarce.

TechRepublic and Auerbach Publications
This article first appeared in the July 1999 issue of IT Performance Improvement. It appears here under agreement with Auerbach Publications. For more information on Auerbach publications, click here.

The breakout of the IT organization into two roles can be a positive force for effective IT leadership. The CIOs cautioned against the tendency toward a management approach that could be described as the "binary syndrome." There are those managers who like to get on bandwagons and push the latest "thing," while forgetting (at least temporarily) that few situations are black and white; blends of thinking are needed.

The centralized IT function (the glass house) gave way to distributed IT via personal computers, client/servers, and networks. It was eventually realized that some central control was necessary, and there continues to be a move back in that direction. An overarching objective is to provide a network that allows employees to communicate and share knowledge at all levels, while also connecting with customers and suppliers. A common architecture and infrastructure is an absolute necessity.

Regarding the technical versus managerial aspects of IT, it is important to remember that we are in a technology-based world. Although technology may not be the ultimate driver of new applications, it most certainly remains the enabler. Thus, the CIO must be comfortable with technology, know the language, but be able to communicate with business people as well as with technical people.

Another concept mentioned by the former CIOs was the need to identify key business champions and to look to them for support and leadership. Any application that has a significant business impact should have a number of visible champions who take an active role in the planning, implementation, and follow-up activities. Equally important are the "hidden champions" who play key behind-the-scenes roles and who can be called upon when things get behind schedule or when changes of direction are required.

The name of the game is still people
In addition to establishing an IT vision that is business- and strategically oriented, the department must include the proper combination of business and technical talent, as well as the leadership and management perspective necessary to motivate staff to design and implement applications that support business strategies.

The CIOs interviewed indicated that, for the most part, their IT staffs consisted of left-brain, arithmetic, logical, technically oriented people. The key CIO leadership challenge continues to be establishing a motivating environment; all agreed that motivation does not emanate from a command-and-control management style. Newer management styles, including empowerment and self-managed work teams, are needed in the IT world. But because of the history and makeup of the workforce, acceptance of newer management styles has lagged and now needs to be accelerated.

In addition, the CIOs stressed that a greater business orientation must be instilled into IT organizations. While the "how" remains important, the "what" and "why" must also be emphasized. A mixed technical-business background is a sought-after competency combination. The IT career path has changed.

The CIOs stated that there are few IT folks who rise in the management ranks without an understanding of the business dimension. We should be looking for individuals who are inquisitive and committed to broadening their knowledge base beyond the technical skills to include the business side, and who are customer oriented. Also, as one CIO stated, they must have that "hang in there" character rather than bailing out when an organizational snag is encountered.

Education and training were discussed and there was common agreement that they have not received the attention they deserve. The CIOs felt the lack of enterprise-wide education commitments continues to be a problem. The impact of insufficient training is more apparent in the IT function because of the types of change that are occurring continuously.

The CIO has a dual role: first, to champion and support education and, second, to be certain that education is planned and executed. All agreed that education is vital to improve organizational morale. The concept of "the learning organization" has become an important one.

TechRepublic and Auerbach Publications
This article first appeared in the July 1999 issue of IT Performance Improvement. It appears here under agreement with Auerbach Publications. For more information on Auerbach publications, click here.
The value-added metric
A key issue for CIOs is always: How does one know if he or she is doing a good job? The CIOs and I spent much time discussing this question.

Their replies had a common theme. There was a shared belief that value considerations have become more significant than cost issues.

This is not to suggest that cost be eliminated as a consideration—not at all. The group pointed out, however, the significance of Moore's law: The power of technology doubles every 18 months, while the price remains the same. This is a positive trend, but it also means that investments have a much shorter life cycle.

The number one company investment on the balance sheet has now become technology. The CIOs felt, therefore, that the answer to the "doing a good job" question rests increasingly in value analysis. To this point, there was agreement that CIOs must be able to present a meaningful picture of the IT function.

One CIO indicated that he always had available an updated slide presentation of the principal objectives and strategy of the IT operation. He emphasized the word "updated," because issues change so rapidly in the IT arena. The presentation was nontechnical and aimed at the interests of key business unit managers. The presentation pointed out that these managers were the principal determiners of IT value and the providers of the IT grade sheet. The IT presentation was a summary of the IT business plan, describing issues, objectives, and projects that add value to the business.

Most of the CIOs felt that the IT function and its direct relationship with the business are still not fully understood and that a key responsibility of CIOs remains that of selling the value of IT to enterprise leaders.

The CIOs emphasized formal versus informal evaluations of IT. Formal evaluations include surveys with both internal and external users (customers). One of the CIOs of a large organization said that he conducted a yearly survey of the presidents of the major operating divisions of the company; he felt these customers were the true scorekeepers. The CIOs said they looked for such feedback as, for example, "Customer service has improved dramatically with the new online customer contact system" or "Sales are up 10 percent in a particular line of business because of the introduction of e-commerce."

The CIOs agreed that while the telling part of IT evaluations originates from outside, an important element of evaluation exists inside as well: the evaluation of the technology infrastructure. Because of its complexity, this element is probably the least understood by line-of-business managers, but it remains a critical issue. The evaluation of infrastructure must be accomplished internally, perhaps with the assistance of outside technical advisors.

In addition, an internal evaluation of the human infrastructure is vital; this also rests within the domain of the CIO, perhaps with the assistance of human resource specialists. Key issues to be investigated include the availability of the skills and abilities necessary to support current and future IT initiatives and the levels of morale and commitment that exist.

In summary, the CIOs felt that the answer to the question "Are we doing a good job?" must be answered both externally and internally. The feeling was, however, that while IT has historically looked inward, today's business climate and operational environment require a shift to an outside focus.

One CIO mentioned that an interesting metric is how much time one spends outside as well as inside the IT organization. This person's thinking was that the amount of time spent outside IT should be greater than half, perhaps even approaching three-quarters' time.

Another CIO felt that it wasn't so much the amount of time but rather the quality of the interactions. Building trust and confidence among key business managers is crucial to success. The idea of a CTO freeing up the CIO for internal relationship building may prove to be a crucial step toward a value-adding IT operation.

Personal feelings about an IT career
I concluded the interviews with questions about personal feelings concerning careers in information technology. All agreed that IT is an exciting and meaningful career field. It is demanding and challenging and is becoming increasingly important to companies. There was no question in their minds about that.

There was a common feeling, however, that IT career paths should include periods of time in other functions of the business. It is easy to get pegged and slotted as an "IT person." Almost all echoed the phrase "Keep all options open."

While IT careers were lauded, there was a downside that came through in the comments: IT professionals are working continually under pressure and their contributions are often not appreciated, while their mistakes are highlighted and the impact of the mistakes exaggerated. IT is a high-pressure, widely visible business arena where one is perpetually in the hot seat.

While the shortage of qualified people continues, the CIOs are confident that there is an appeal to the field that will continue to draw good people. The work calls for imagination and intelligence, and is self-satisfying. Salaries are generally above comparable business positions.

The CIOs did offer this advice to IT professionals, however: While technicians will always be needed, don't get slotted as a technical specialist. More career options will be available to generalists than to specialists. Well-rounded individuals will have better shots at promotions, whether those positions are inside or outside IT.

TechRepublic and Auerbach Publications
This article first appeared in the July 1999 issue of IT Performance Improvement. It appears here under agreement with Auerbach Publications. For more information on Auerbach publications, click here.

The final question I asked each CIO was whether he or she would encourage a son or daughter to pursue a career in IT. Their reactions included a great deal of body language that conveyed feelings of ambivalence. Personalizing the career question added an important dimension to their answers. Responses were that, if there were no changes in the environments from which they had just retired, their advice would be negative.

But they all believed (although they had no way to support their views) that things would improve for the IT function and for CIOs. They stressed the new governance models where IT responsibilities would be shared by the business units.

They also thought that the evolution of hardware and software products would make it easier to implement applications, would foster ease of use, and would increase IT credibility within the organization. The value-added perspective would eventually outdistance the cost-containment perspective. However, we know that nothing is certain, and I feel that is the reason behind the ambivalent body language when I placed the IT question in a personal and family context.

Final comments
As director of CIMS, I have the opportunity to speak with many CIOs. It is important for me to know the CIO of each company that belongs to CIMS. Whenever we have a new sponsor or when there is a change in CIOs at existing member companies (a frequent event), I meet with the new CIO. During the course of these meetings, I often indicate that I have spoken with these recently retired CIOs, and mention some of their common points of view.

I am not surprised (and am always pleased) to see these current CIOs nodding their heads in agreement. Their agreement, I feel, is a validation of the thinking of the former CIOs. I have concluded that the results would not have been markedly different had I interviewed the current IT executives.

When the CIOs spoke of personal careers, and when I asked them if they would return to a CIO position if the right situation arose, they said that the situations would have to be exceptional. They feel good being out of the chaos, but they also discern the hint of new, more acceptable and effective working environments.

While they believe there will be no letup in the introduction of new technologies (in what they term the post-Internet era), they also see an increased number of technology decisions being shared with technology-literate business unit managers. This improvement in IT governance will, they feel, be a major factor in removing the IT scapegoat syndrome and improving the quality of life in IT organizations.

One of the CIOs stated that he was looking to the first year of his retirement as a "corporate sabbatical." He needed time to relax, read, be with his family, play golf, and in general do the things his hectic business life did not permit. As an aside, there is some skepticism concerning college and university sabbatical policies. Rather than end sabbaticals, these interviews may result in the suggestion that they be extended to include corporate executives. Increasing business pressures are lowering the retirement age of executives at a time when their companies and the economy can use their expertise and experience.

The CIOs felt that while IT will always need left-brained, logical, highly structured people, the shift will more and more favor right-brained, team-oriented, collaborative, and innovative people. Future organization environments may become less bureaucratic, more informal, less restrictive, more creative, and more people-based or team-based. All in all, we may see more innovative cultures evolving, with a greater sense of achievement and belonging. This would add to the fun and job satisfaction that has been lacking.

To conclude, the CIOs were open and candid in their views of their careers. Their opinions and feelings reflected great respect for the importance and role of today's CIOs. They had a high level of understanding of what it means to add value to the enterprise, and to accept responsibility for results.

As a veteran CIO stated several years ago, "IT is like an Alka-Seltzer tablet dropped into a glass of water. It disappears and you can't see it, but its effects are quite apparent." These realities are making IT careers more attractive, manageable, productive, satisfying, and fun. These insights, observations, and suggestions are indeed "Messages from the Past, Lessons for the Future."

Jerry Kanter is executive director of the Center for Information Management Studies (CIMS) at Babson College, Wellesley, MA. He is a highly respected IT executive, consultant, author, and speaker, a member of the Society for Information Management (SIM), and an accomplished career coach.


TechRepublic and Auerbach Publications
This article first appeared in the July 1999 issue of IT Performance Improvement. It appears here under agreement with Auerbach Publications. For more information on Auerbach publications, click here.

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