Many companies strengthen their technology strategy by creating new CIO positions or by elevating their present CIO position to senior-executive status. While these tactics make many CIO positions extremely attractive, you need to find out the reason for the change before you take the job.
In this article, we will examine:
- Why there has been an increase in companies adding CIO positions.
- Why more CIOs are reporting to CEOs.
- Red flags that tell you this CIO position might not be the right one for you.
- What you can expect moving into the executive board room.
- Tips for the new CIO.
A new chair at the table
Gary Bakker is not only the newest addition to the senior management team of NuEdge Systems, a provider of marketing automation solutions to the retail, catalog, and financial services industry, but he is also the first CIO for the Waukesha, WI-based company.
Bakker believes that a fairly subtle reason why companies like NuEdge have chosen to add a CIO position is because they feel they need to bring in a new perspective to business dealings.
“There have been several studies that have shown there is a direct relationship between the diversity of a work group and both the volume and quality of the solutions that that group comes up with,” said Bakker. Adding the technologist’s voice enhances strategic development because “As you get a wider variety of voices at the table, you get better business solutions,” he said.
However, be aware that gaining that new voice by adding a CIO or even changing the reporting structure of that position can create some discomfort for the management team itself, warned Diane Tunick Morello, vice president and research director for the Gartner Group. (TechRepublic is an independent subsidiary of Gartner.) “Everybody needs to deal with a new perspective and decisions now being shared among a different group of people,” she said.
Up the corporate ladder
Companies with established CIO positions are also reacting to the business emphasis on technology by moving CIOs directly into their senior management teams and having the position report directly to the CEO, a trend that seems to be on the rise. Between 1998 and 2001, the number of CIOs reporting to CEOs has increased by 40 percent according to a Hackett Benchmarking & Research study released in March of 2000.
“The truly progressive organizations have brought the IT organization closer and closer to the executive office and have created an alliance between IT and operations,” said Kevin Rosenberg, managing director with BridgeGate LLC, an executive recruiting firm in Irvine, CA.
These organizations have focused on the value of IT rather than the cost, he explained. “What we’re seeing in the search business is an increased premium on CIOs that have lived in the shoes of the operations folks or CIOs who have said ‘I’m a technologist at heart, but I’m going to get an MBA as well,’” said Rosenberg.
Beware of the "miracle worker" syndrome
Before you take a CIO position, do a little homework on recent changes to the CIO role in that company, said Tunick Morello. In certain circumstances, new CIO positions or recent reporting-structure changes could indicate possible problems.
Tunick Morello said that any CIO stepping into a new role may have been hired as a ”miracle worker”—a scenario marked for disaster. Chances are, other team members have no intention of letting this person initiate change without making it excruciatingly painful. The other risk, she explained, is an expectation by the board of directors or other leadership that simply the presence of someone new will cure past problems.
To protect yourself, Tunick Morello suggested that potential CIO candidates ask the following questions:
- Has the CIO been the primary proponent for information decisions in the past? What are the kinds of things you can point to that the CIO has been involved in recently?
- How change-ready is the organization at the senior level? (A high turnover rate among past CIOs may indicate that that the CIO has been given no opportunity to win and every opportunity to fail, said Tunick Morello.)
- If this is a new position, can you ascertain whether the company truly wants to empower the position or whether it was created simply because it ”seemed like the thing to do”?
- What kind of evaluation standards does the company have for this position?
- Who does this position report to?
Moving from the server room into the board room
All new CIO positions have a learning curve, but this is especially true if the CIO position is new to the executive management team, said NuEdge’s Bakker.
“I think the major adjustment that that person might have to make has to do with thinking in a little broader scope. When you’re not at the executive management team level…the scope of what you need to have an opinion about is narrower,” said Bakker. As a CIO becomes part of executive management team, however, it is critical to have an understanding of not just the technology but the industry as a whole, he said.
Tips from the experts
Tunick Morello, Rosenberg, and Bakker offer the following advice to new CIOs:
- Learn as much as you can about as many different aspects of your company’s industry—and the company itself—as possible. This information will help you make better decisions for the business as a whole.
- Don’t be afraid to take risks and think out of the box. The responsibilities of your new role will demand it.
- Build relationships and alliances with other executive team members—especially those who have used technology effectively.
- Learn to delegate day-to-day details to your staff to avoid micromanaging them.
- Network with other CIOs to hear new ideas and learn creative solutions.
- If you don’t already have your MBA, consider going back to school. An MBA can help you make sound business judgments when it comes to technology solutions.