Today's CIO, tomorrow's CEO? An academic observation

Dec 7, 2000
Gartner

By Marti Harris

The ability of the CIO to speak the language of business strategies is one of the skills that can help CIOs become CEOs.

With the role of the CIO progressing from functional head to strategic partner to business visionary, there are new options in relationships between CEOs and CIOs. How business schools participate in these changes can be reflected in both MBA and executive programs. We asked Anthony Paoni, clinical professor of e-commerce and technology at Northwestern University's Kellogg Graduate School of Management, to address some of these questions regarding CIOs and CEOs from the business-school perspective.

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Gartner: From the point of view of business education, what is the future of the CIO?
Paoni: CIOs have a unique opportunity to position themselves to be the next CEO of their organization. The reason why? Technology is moving from the back office to front office. That means that the CIO no longer reports to the CFO; the CIO sits on the strategy team of the organization.
Business strategy will depend on technology. Therefore, the key player on the management team will become the CIO, because without that person's ability to translate the strategy of the organization into a coherent and executable IT strategy, an organization will not be able to compete effectively in the new economy.
These new "CIOs-cum-CEOs" are a different breed; they don't believe that technology is really expensive, slow, and takes a long time to implement. They're able to create and execute strategies that leverage technology in a fashion that hasn't been done in the past. Second, they speak business strategy. They don't speak RAM, ROM, gigabytes, or Web spiders. They know how, at the executive level, to speak the language of business strategies.
The role of the CIO is to look across the entire enterprise, and the only other person that sees the entire enterprise is the CEO. Virtually every other functional head at that level looks at a specific discipline. The CIO cuts across every department and every part of the organization; thus, they are uniquely positioned. If they can speak the language of business strategy, they are very well positioned to be the next CEO.

Gartner: Are the roles of the CIO and CEO improving? Are these people working together?
Paoni: The surveys that I've seen still indicate that for the past six or seven years, CIOs have been working on aligning IT strategy with business strategy. Looking at things historically, we've built a foundation. In some cases, it's been flat-out brilliant; in other cases, it hasn't worked quite the way we thought it was going to.
Some believe that a gap currently exists between the CEO and the CIO. Part of it is due to language, because the CIO has to be able to speak the language of technology to their organization and the language of business strategy to their peers and the CEO.
Relationships are strained when strategic projects are late and/or over budget. The CEO might have the feeling that the CIO has taken way too much time to deliver certain strategic systems and has brought them in over budget. Why would the CEO want to embrace this person as a key player of the management team and consider them as a successor?
The CIO has a great opportunity to educate the management team and prove they can rapidly deploy technology and support a business strategy. One of the ways to do that is to look at using the Internet in ways we hadn't really thought of in the past. The CIO has it within their grasp to be able to change this strained relationship between the CEO and the CIO.

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Gartner: What is the mind-set of business students these days?
Paoni: Student attitudes have changed toward which jobs they are interested in. We've seen over the past couple of years that our 600 incoming first-year students were really intent on using every class at Kellogg to create a business plan, understand a marketing implication, and then launch some dot com and get rich within three years and be on the cover of Fortune. I think we're finding that reality has set in, and that chapter one of the new economy book entitled "Dot-Com Fever" is finished—and I think it was a rather short chapter. Chapter two is being written, and the name of that chapter is "The Empire Strikes Back."
You're finding an enormous awareness on the part of the great brands of the world—General Foods, Kraft, McDonald's, everybody from Miller Brewing to American Express. These great brands are waking up and saying, "Wait a minute, this is about me; it's not about dot coms."
So I think there's a resurgence on the part of our students and on the part of the corporations' role in the economy. The feeling is, wouldn't it be nice to be one of the change agents in a new company who rapidly moves up through the ranks and finally gets the job they're all looking for by being someone who understands how to create change?

Bottom line
Business schools that prepare leadership for the IS organization can educate the management team and prove that they can rapidly deploy technology and support a business strategy. The relationship between the CEO and CIO improves when they share a common language of business strategy.

The opportunity and challenge for the university is to create and offer programs that lead to a common language and understanding between the CIO and CEO. These programs benefit when offered as part of university/corporate partnerships.

Gartner originally published this report on Sept. 5, 2000.

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