CXO

CIO role multiplies as companies expand and grow

Many organizations are creating multiple CIO positions to handle the breadth of tactical and strategic duties that have become a part of the job. Here's a look at two organizational models that companies are using to divide their CIO responsibilities.


Just a few short decades ago, it was easy to describe the CIO role. The tech leader likely managed department heads, a few directors and, along with the rest of IT, toiled in a basement office next to servers and a room full of cables. But in the last few years, the role has expanded and advanced, both in responsibility and stature.

"Instead of just managing department heads and a few directors, what he now has is essentially independent businesses running under him, from a technology point of view, that support various parts of the company,” says Pam Wiedenbeck, western regional manager with SEI Information Technology.

Wiedenbeck, who handles SEI’s hiring and career development, noticed the role change at various organizations. This division of duties has similarly affected the roles of CTOs, as in the case of CacheWare, a privately held Internet infrastructure technology company. CacheWare CEO Jim Ottinger recently redefined two executive positions in his organization.

The expanding CIO responsibility has spurred the creation of two new organizational models, says Wiedenbeck: a CIO team approach and a more traditional hierarchical approach.

Two emerging models
Wiedenbeck calls the two main models the "council of equals" and the "hierarchical model." Their basic structures are illustrated in Figure A.
Figure A
Click on Model 1 to view the hierarchical model or Model 2 to view the council of equals model.

The council of equals model consists of an odd number of CIOs that each represent a division, product, or line of business. Those CIOs typically will report up to a CFO or to the chair of the board of directors. The odd number is important, Wiedenbeck says, because as this group would function as a team or jury, you might need a tiebreaker if an issue came to a vote.

"The model happened in what I would call highly collaborative organizations, with lots of meetings, and lots of consensus building," Wiedenbeck says. "They collaborate for organizationwide issues, such as outsourcing procurement or human resources, but they maintain their independence within their respective business units for application-specific technologies and solutions."

The hierarchical model is more common and is typically adopted in more hierarchically structured organizations. It's most often seen in large companies with multiple divisions where the business units are aligned by a particular product or delivery responsibility, Wiedenbeck said. In this model, each division has a CIO who reports to a Deputy CIO (DCIO). Unlike the council of equals model, it doesn't matter how many CIOs there are because this isn't a collaborative group. The DCIO reports up to the chairman or CFO and typically makes decisions about companywide standards, technologies, and policies, Wiedenbeck said.

"The divisional or departmental CIOs have much less flexibility in choosing technology, contractors, or other things outside…their own division," Wiedenbeck says. "So they have some autonomy based on their user community, but it’s a much less flexible model than the [council of equals]."

Why the need for multiple CIOs?
While the number of CIOs within organizations may be increasing, none will be without their own specific areas of focus. While many organizations choose to divide their CIO roles along product or divisional lines, others may choose to divide them between technology-related strategic and tactical objectives.

In March 2001, Gartner released a report called "Seven Steps to CIO Heaven," which explored the seven elements necessary for CIO success. The report stated, however, that "most CIOs must concentrate on fewer than seven because of time constraints and because the necessary skills and approaches are quite different." The Gartner article went on to divide the seven steps into focus areas for the CTO, Business Unit CIO, and Corporate CIO, as shown in Figure B.

Figure B
Gartner's steps to CIO heaven


The models Wiedenbeck describes could be considered a natural evolution of the CIO role, given the numerous areas of focus Gartner highlights in the figure above. CacheWare CEO Ottinger reorganized two executive positions within his company in this fashion.

Case in point: CacheWare redefines executive roles
The decision to divide CacheWare's CTO role was a function of the company's growth and change of focus, says Ottinger. CacheWare, located in California's Silicon Valley, was founded in 1995 and recently pushed its core product into the beta-testing stage. For that reason, Ottinger divided the CTO role in order to refocus his team.

"As the organization grows, you find that the management tasks become greater and more strategic, and visionary aspects of the job become greater," Ottinger says. "At some point along the evolution of the company, you have to make an investment to separate those functions."

CacheWare is now focusing on selling and delivering its content visualization and distribution software to midsize to large enterprises. "Suddenly, the breadth of our objectives is much greater now," Ottinger says.

As a result, Ottinger split the duties originally assigned to the CTO into two positions: the CTO and a vice president of engineering. While the titles do not mirror the models described by Wiedenbeck, the positions' goals fall under those that might have traditionally been assigned to a CIO.

CacheWare's CTO will now be a support to the sales staff in talking with customers and original equipment manufacturers (OEMs) who are interested in reselling the product.

"It's quite a technical sell," Ottinger said. "It requires more than just a salesperson because you have to explain the nuts and bolts of the product, communicate the company's road map, and be knowledgeable of the market in general."

The CTO will also focus on the long-term, strategic goals of the company. Ottinger says he just gave the new CTO the task of planning a three-year road map for the company, which will require him to talk extensively with businesses involved in the content management and distribution industry to ensure that CacheWare's strategy is on target.

Ottinger tasks his VP of engineering with more tactical duties, like hiring new talent, assigning work to programmers, and working with the management staff to ensure schedules are met. His role is to lead the company in the short term, perhaps planning a "road map of maybe two months," Ottinger says.

CacheWare's structure: A hybrid model?
While CacheWare’s approach doesn’t precisely fit Weidenbeck’s models, it’s reflective of how some enterprises are molding and reconfiguring the CIO job to meet their specific leadership needs.

CacheWare's model is a hybrid of the two sample models. Like the hierarchical structure, both the CTO and VP of engineering report to Ottinger, but because the company's staff is still small—with only 30 people—the culture includes some consensus-building characteristics.

"We have a staff meeting once a week to make sure that the two of them understand what's going on," Ottinger says. "At this point, the important thing is that they talk to one another as they run into things that will affect what we're working on today…and report back to marketing and engineering."

While diverse industries have adopted the models, Wiedenbeck says many financial services and insurance companies have implemented the change, as well as other industries that have recently branched into many divisions.

"The other industry where I’ve seen the models start to be adopted is in the entertainment industry, where you typically have a large number of independent businesses that make up an entertainment company," she says.

Surprisingly, an organization's decision about which model to adopt depends more upon its organizational culture than its existing structure, Wiedenbeck says.

"In a collaborative organization, I don’t think you can use the hierarchical model simply because in organizations that are used to building consensus, there would be a lot of resistance to having a single person dictate policy," she says. "So there are organizations where I’ve seen both models work reasonably well, but I don’t think you could interchange them."

Has your role been divided?
Are you a CIO in an organization with multiple CIOs? If so, what benefits does your company's new structure offer? How was the scope of responsibilities defined for each office? How do you ensure good communication within the organization? Send us an e-mail or discuss the topic below.

 

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