Judging CIO performance purely on the strength of the company’s share price is an unfair and unreliable benchmark of success or failure, according to leading UK IT chiefs.
Two-thirds of silicon.com’s 12-man CIO Jury IT user panel this week voted against the notion that a company’s share price should be the ultimate measure of success for CIOs.
This followed research last week claiming CIO success is gauged externally almost entirely on the brand strength and share price of the company they work for.
Most of those who voted ‘no’ pointed to other benchmarks such as profitability and revenue as more reliable indicators than share price of a successful CIO and IT department.
Phil Young, head of IT operations, Amtrak Express Parcels, said: “You must also look at company’s market share, profitability and ability to open up new services at the request of the business.”
The fickle nature of markets and the external influences on share prices are outside of the CIO’s sphere of influence, according to Peter Dew, CIO at BOC.
“Ultimate measures of a CIO’s success should be on contribution to growth and productivity – as measured by revenue and margin improvement. These measures incorporate the CIO and his organisation’s contribution across their many roles of innovator, value creator, business enabler and efficient operator,” he said.
Kirk Downey, CTO at Centrica, said CIOs should have a shared role in realising the business agenda with their peers that focuses on “economic value creation” as a more directly measurable indicator for performance for both IT and non-IT executives.
“Cascading these measures down the organisation also delivers a profound change in the mindset of IT professionals in the organisation as they begin to focus on where the real value is created driving out the appropriate priorities for investment. This may in fact be a critical factor in realising any modern IS strategy in today’s business where time and investment are limited,” he said.
But Sean Powley, head of IS strategy at the London Borough of Barnet, agreed that share price should be the ultimate success or failure benchmark for CIOs. “Which is why I work in the public sector,” he cheekily added.
Andy Harper, head of IS at United Utilities North West, said that being judged on share price performance is a logical extension of defending IT spending decisions and how they impact on the bottom line of the business.
“CIOs should be ready to demonstrate the worth of every pound spent in IT and should aspire to being able to determine the value of that investment to the company’s bottom line in terms of its likely addition to the company’s share price. Once you accept that, why not be judged against that criteria by measuring CIO success against the share price,” he said.
Today’s CIO Jury was…
Ken Davis, head of IT, Five
Peter Dew, CIO, BOC
Kirk Downey, CTO, Centrica
Andy Harper, head of IS, United Utilities North West
John Keeling, director of computer services, John Lewis Partnership
Christopher Linfoot, IT director, LDV Vans
Andy Pepper, director of business information systems, Tetley
Sean Powley, head of IS strategy, London Borough of Barnet
Jacques Rene, head of IT and projects, Airclaims
Gavin Whatrup, IT director, Delaney, Lund, Knox, Warren & Partners
Graham Yellowley, director of technology, Mitsubishi Securities International
Phil Young, head of IT operations, Amtrak Express Parcels
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