Research indicates that the CIO’s role as the functional department head is becoming less important to organizations, especially SMEs. Jay Rollins offers CIOs advice on how to transition to being more of a business strategist.
CIOs are increasingly asked to be more strategist than functional department head. In a small and midsize company, this can be very challenging. CIOs are expected to be: a technology expert who focuses on operational excellence, a dynamic leader who can lead change throughout the organization, and a business strategist.
If a CIO comes up the ranks through the IS track, her comfort zone is in the functional realm. CIOs who focus on the functional area know servers, software, applications, databases, telecom devices, etc. More importantly, they know how to operate and manage them efficiently and effectively. This works out brilliantly if you need information about the next version of server operating systems, the impact of open source, or what servers to buy to get the most megaflops per dollar. But according to studies and research, such as CIO.com’s State of the CIO 2008, the functional focus is becoming less important for the CIO role.
Many CIOs have abilities to transform an organization. CIOs can see how a new technology can help their companies (and not just the IT department) operate more efficiently and know how new software applications can revolutionize how their companies operate. Streamlining a transaction process or facilitating huge productivity improvements and doing it successfully require four important skills: evangelical, project management, people leadership, and end-state visioning. Important to the organization? Absolutely. But that same research also suggests that this role is becoming less important to organizations.
Pundits point to more of a business focus
Business strategist CIOs focus more on external customers and partners to work on introducing new products or businesses to the market or new technologies that facilitate internal sales and marketing organizations.
As these differentiations have arisen over the years, I have found that the functional and business focuses are not mutually exclusive — especially for the CIO in an SME. Maybe larger companies can afford to hire just the business strategist CIO or the transformational CIO, but for the SME, many times, this is just not an option.
I believe that the functional focused CIO is becoming less important even in the SME. Companies in this stage of growth require less of a systems expert and more of a process or business expert. Transformational tasks are extremely important as companies start growing quickly. Economies of scale and efficient operations of core processes can be early differentiators in these companies. A CIO who can understand these internal processes, execute to a plan, and lead the change and transformation is vital.
Other key qualities are understanding external customers and establishing strong relationships with not just IT vendors but suppliers with a focus on new lines of business or products that can be taken advantage of. CEOs rely heavily on a CIO who can bring system and process knowledge to the table to help generate ideas and create new relationships. You don’t have to wait for the CEO either; SMEs typically launch in new industries or by developing new products. Many times, these companies focus on building custom systems that help this particular company do its business. These same systems can be commercialized and sold outside of your organization. If the system addresses a process for your industry, know that it is not a strategic differentiator. This is the time in the product life cycle when you can make the most out of your system, but it is only a temporary advantage; it’s the perfect opportunity to step in and make bottom line contributions to your company.
It won’t be easy
Even though it will not be easy, many times, it can and should be done. In an SME, the trick is getting your head above the flood of issues that keep dragging you down to the functional focus that you still need to address.
Know how much time you are spending on functional issues; look at that time in relation to the time you spend being a transformational change agent or a business strategist; and then question whether you should spend that much time focused on functional issues. If your answer is no, look to delegation or outsourcing it to partners, but always focus on the functional issues with an eye toward fixing the issues for longer term supportability. You should also make time to focus on the areas that are becoming more important to your company.
The business focus has its rewards
As companies get larger, the business focus gets rewarded more than the functional focus. CIO.com’s State of the CIO 2008 found that a business focused CIO earns “44% more than the function heads.” So make time to focus more on strategic areas — it will pay off in the long run.
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