Higher Power
The power of the CIO, and indeed the entire IT team, is to some degree measured by the reporting relationship at the top, according to IBM's Julian Wee. He is not the CIO of IBM - the CIO works for Wee, which indicates who has the greater power at IBM. As general manager of technology and transformation, Wee had an office right outside IBM CEO Phil Bullock's and maintains his residence there under the new MD Glen Boreham. "I don't think that physical closeness is a real issue, although it says a lot to the IT community about how they are positioned in the enterprise," Wee says.
"It's not a motivator to me, but I've seen a lot of my peers report to finance. While that's probably okay for the CIO, you have to ask how that seems to the team." Wee believes that IT departments feel more empowered in the business, and hence deliver more to the business, when they feel they are part of the CEO's team rather than sidelined to the CFO.
IAG's Issa agrees. He believes the CIO-CEO relationship is sacrosanct, as the CIO needs to believe that "IT is a fundamental core competency" to drive the organization. "Now if the CEO thinks IT is a commodity and it makes strategic sense, then fine, the CIO can report to the CFO. I wouldn't work for a company like that - a company that doesn't think the CIO should sit at the executive table." He has never had to, having worked in financial services all his life where IT is fundamental to success.
At the OSR, where Kennedy was CIO, he also reported directly to the CEO, which he thinks was important in order to be seen within the enterprise as having a "trusted adviser status". However, he believes that a CIO's ability to wield implicit power or truly influence the business is "different if the CIO reports to the CFO or in an organization where IT is not a critical success factor".
At Santos, Bard reports to the vice president of development projects and technical services. She is comfortable with that, saying it is part of a Santos initiative to streamline operations, and she believes it makes sense having IT sit in the business and report to the business. "The way it has been handled is that the vice president has made it clear that I'm not the CIO of the department but the CIO of Santos. My scorecard is across the whole executive team. The visibility is there and the support is there."
When IT's contribution is recognized broadly in the business and by the senior executives, a successful CIO can accumulate both power and reach, according to Suncorp's Kogekar (who himself reports to the CEO). "Woolworths's CIO runs their supply chain as well because he has become more useful to the organization." (The notoriously media-shy Woolworths CIO Steve Bradley was approached to participate in these conversations on power, but chose not to do so.)
According to Kogekar, having the power and influence through the enterprise remains an important career stepping stone for CIOs. "If you have the authority you can get things done and play on a bigger canvas."
Goh also believes the reporting structure for a CIO is in part dictated by the sector and the importance of IT to that sector's competitiveness. At Challenger, "the backbone of the organization is technology", he says, "therefore IT will have power and influence by default. The question is how to earn a seat at the executive table where you can use your role and your power to influence the business. However you are going to be at that table not because of your power but because of the value you provide and the trust the business has in you. Power gets you in the door. To stay you need to add value.
"When I am at the executive table I do not exercise any power. That is not a forum for showing power. You need to play the role as a team member, not show the power of the role of CIO."
Besides the importance of the CEO-CIO link in conferring power, IBM's Wee says that horizontal links to business managers can be exercised to break down barriers between business and IT. Where there seems reluctance to cooperate, the savvy CIO will "establish those connections and say to a business manager: 'I want to get your guys to work with my guys'. You've invested time and energy in a high-level agreement but then the other people in your team can go and do it."
For CIOs to be successful they have to understand some of these broader management responsibilities, Wee says. "It's impossible to be a good CIO without being an outstanding general manager."
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