With the digitalisation of business, and the spotlight on innovation growing brighter by the minute, IT leaders are often pressed to become the digital leaders and innovators their companies crave.
The latest State of the CIO report found business leaders increasingly expect the CIO to lead corporate-wide innovation projects and to help develop new products and services, but three quarters (74 per cent) of CIOs say it's tough finding the right balance between driving innovation and keeping the lights on.
Further, according to a Gartner report last year, 42 per cent of CIOs believe their IT organisation lacks the key skills and capabilities necessary to respond to a complex digital business landscape.
While grappling with digital transformation will require a shift in the skills and approach of a traditional CIO, relatively few are equipped for the demands of a digital world. Perhaps noticing the strain on IT, organisations have been sniffing out fresh blood to exploit burgeoning opportunities from new and complex IT trends.
As a result, the past several years have seen different leadership roles cropping up across industries: chief marketing officer, chief digital officer, chief data officer, chief growth officer, chief science officer and chief analytics officer, to name a few.
Probably the most prevalent digital role today, chief marketing officers (CMOs) made a splash in the IT pool back in 2013 when Gartner research analyst, Laura McLellan, claimed that CMOs would control more of the IT spend than CIOs by 2017.
The focus on digital services and big data forced CMOs and CIOs to work more closely together as IT slowly became a front office function, transforming from a cost centre to being a business enabler.
The latest roles driving the evolution of the CIO, including the increasingly popular chief digital officers (CDOs) and chief innovation officers (CINOs), are growing in number and intersecting with CIOs to become the connective tissue – if not the driving force – behind many IT-heavy initiatives. So how can CIOs continue to embrace the expansion of the c-suite into what has always been their domain?
Influx of new roles
“The biggest battleground in the c-suite is over the idea of customer facing technology,” says Robert Hillard, managing partner at Deloitte consulting.
“It’s now completely impossible to find where technology ends and customer service begins, these things are totally integrated. And what’s more - the best digital companies don’t differentiate between the business systems that provide product capability, and the digital services they provide.
“That means you naturally have people like chief digital officers and chief marketing officers and product general managers saying they actually own, and want to be directly involved in, the architecting of those business systems.”
Where once the CIO would defend their turf, now many have effectively partnered with those roles, and must be willing to tear down barriers and navigate new working relationships to enable business growth.
The concept of digital leadership is on the rise. The 2015 Harvey Nash CIO Survey found 17 per cent of CIOs worldwide now work with a chief digital officer, while a CEO survey by Gartner found more than 40 per cent of CEOs said they have a senior leader with “digital” in the job title.
The chief digital officer can help to bridge any divide between the CMO and CIO to better meet customer expectations, and is expected to think strategically about optimising the digital landscape to drive growth and increase revenue.
Another new front runner is the chief innovation officer, with an even wider reach across all lines of business. In a study by PwC and CEB, 61 per cent of CEOs said that innovation is a priority, and 75 per cent of executives are concerned with not having enough ideas.
Implementing disruptive innovation that would give a company competitive edge requires time, research and effort – enter the CINO, who can identify areas for innovation and work across business units to ensure ideas are turned into actions, balancing the usual innovation-killing culture of traditional corporates.
The role is technically not new – as far back as 2012, 43 per cent of large companies had a formally accountable innovation executive in place, according to a Capgemini survey. But the overlap of the CINO into the remit of IT has naturally increased as technology becomes the basis of all business operations.
One company that has taken on a CINO is marketing and communications firm, Bastion Group.
Bastion’s digital innovation strategy is headed up by Hugh Cameron, former head of digital with carsales.com.au, as part of an overall strategy to change and upskill digital leadership in-house, while choosing to outsource most of their IT systems.
“We’ve changed the IT leadership role in Bastion Group significantly over the last six months after identifying some key areas in our business that we wanted to grow,” says Michelle Cox, Bastion’s chief operating officer, who oversees IT.
“First we put me into the COO role across the whole group. Now we’re working to be more digitally and social savvy as a business, wanting to be at the forefront of changes in our industry. We had to upskill our entire business around that social and digital space, and we went out there to look for an expert and found Hugh.”
Cox says Cameron’s remit as CINO is to work across the four companies under the Bastion Group, and he is expected to come up with new ideas, tools and strategy for each individual business unit, as well as maintaining a group-wide gaze.
“I try to make sure he has time for big picture thinking, so there’s no clear idea on a solution that we need for the business, it’s not targeted to a particular business unit or company, nor a specific client, it’s actually just stuff he comes up with or comes across that could really change our business overall, whether it’s structural changes or overhauling the website, and so on.”
Tearing down boundaries
Learning to collaborate with all these new roles and partners is critical for CIOs who want to foster business growth, but also to remain relevant as times change.
PricewaterhouseCoopers' fifth annual Digital IQ study found companies with collaborative relationships between the CIO and other c-suite executives are four times as likely to achieve business results such as revenue growth and high profit margins, as well as earning a higher ‘digital IQ’ overall. C-suites characterised as strong collaborators typically link their IT road map to corporate strategy, the study says.
The reality is collaborative relationships are proving difficult to maintain, however. In IDC’s latest LOB Sentiment Survey, 47 per cent of LOB leaders said their CIO was fighting a turf battle with at least one c-suite peer, and 54 per cent agreed that non-IT departments view the IT group as an obstacle to their mission.
“There’s a threat that CIOs are feeling in terms of the proliferation of other people who claim the technology base and who also have a ‘chief’ title,” says Hillard.
“The CIO should be playing an active role in innovation, but not trying to protect their turf. The reality is you need a mindset that is, ‘how can I apply innovation and technology to achieve great things for the organisation?’”
Indeed, allowing others to take over certain responsibilities can take the pressure off CIOs expected to champion innovation, freeing up time and head space to commit to developing business strategy.
CIOs should highlight their unique vantage point by bringing their skills in IT methodology and cross-business purview to the executive table.
“There’s more than enough room for everybody to play, and the CIO will be seen as an enabler and will reduce the risk of them being seen as a blocker.”
The message across the board is that digital-ready CIOs don’t just focus closely on driving growth, but also the relationships they need to support this, and are far more open to taking advice and trying out new ideas.
Recent research by Ernst and Young also found digital-ready CIOs see digital as a major opportunity to fulfil their career aspirations. Meanwhile, even in IT-intensive industries, only half (51 per cent) strongly agree that they are taking the lead in pioneering new digital approaches within their businesses.
Hillard recommends that CIOs should aim to work like a venture capitalist, adopting a portfolio management approach to IT’s balance sheet and investment pool, while providing greater visibility into IT’s areas of focus, its risk profile, and the value IT generates. CIOs should be prepared to also explain the complexity of this IT portfolio to business partners, and help them find opportunity in areas they otherwise might not have.
“That’s a much more collaborative view, rather than simply being an order taker and providing business systems according to a set of specifications,” says Hillard. “In order to evolve and progress you need to be able to show that you have a portfolio that you’re looking after well and that you’re having a material business impact.”
Cox agrees that success relies on IT leaders who understand that they are now part of a wider remit that affects the whole business, while also taking the time to learn where specifically they can add value, and where they can take a step back.
“It’s like any relationship I guess – it’s working to understand and build that network together and determining: what are your skills, what are my skills, what are we both really good at?” she says.
“If it is the IT specialist, they know the history of the business and the way the systems work. They know the company, the infrastructure, the good, the bad and the ugly. Then a new person comes in and has different ideals and you can work together and share those insights.
“I’m sure they could learn a lot from each other rather just being that ‘no’ person for innovation or digital because they will constantly butt heads.”
Keep your IT shop in check
Though evolving from a technology manager to a business strategist, CIOs still need to maintain reliable core operations and infrastructure to establish their credibility in the organisation.
“Spotty service and unmet business needs can quickly undermine any momentum CIOs have achieved,” reads the Deloitte 2015 Tech Trends report.
Deloitte recommends that CIOs first go after operational excellence, which will earn them the right to collaborate with the business and give them what they really need, not just what they ask for.
“Increasingly, CIOs need to harness emerging disruptive technologies for the business while balancing future needs with today’s operational realities,” the report reads.
“They should view their responsibilities through an enterprise-wide lens to help ensure critical domains such as digital, analytics, and cloud aren’t spurring redundant, conflicting, or compromised investments within departmental or functional silos.”
Ginna Raahauge, a veteran of Riverbed and Cisco, and newly appointed CIO for integration software specialist Informatica, recently spoke with <i>CIO US</i> around the evolving role for IT leaders, and the need for CIOs to now juggle four Is - innovation, integration and intelligence, while keeping a solid eye on infrastructure.
As the role shifts, CIOs need to remember that new responsibilities are an additive to the infrastructure maintenance and support that have always been part of the IT function, Raahauge says.
"You have to have a clear architectural view and strategy," she says. "You need to key to a longer-term decision point, while keeping it flexible enough that you can pick up the new technologies that are emerging so fast.
“It's about the balance of looking at both infrastructure and application architecture all the way out to user experience."
Gartner’s 2015 CIO Agenda too calls CIOs to action on the need for a new technology management role, explaining how CIOs can flip between old and new behaviours and beliefs, and why they must do so to successfully deliver on the digital promise.
The report found that though aware of new digital technologies and approaches to information, the CIO mindset is dominated by nurturing and evolving legacy assets and capabilities.
Gartner recommended CIOs who want digital business success, as well as remaining leaders in technology management, must start with a digital mindset and work backwards.
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