BizTechReports Q&A: Assessing the Future of the Enterprise CIO with Russell Reynolds Associates

To lead…or to support.  That has been the perennial question that has dogged the most senior positions in IT since being accepted into the C-level suite.  As we approach the mid-point of the decade, the enterprise technology environment is undergoing a fundamental transformation.  CIOs are rapidly either outsourcing key infrastructural resources or moving them to the cloud.  And despite early efforts to retain control of the emerging end-point of choice (tablets and smartphones), even these critical elements of enterprise connectivity are being pushed to end-users as organizations adopt BYOD policies en masse.  It begs the question:  What does the future of the CIO look like?

To give us a perspective on this question, we are lucky this week to have connected with Shawn Banerji, managing director of the technology sector for Russell Reynolds Associates.  As a premier provider of senior-level executive search and assessment services, the firm has been serving clients globally for 40 years.  We thought it would be extremely interesting to capture what is a rather unique perspective on the executive future of the CIO.  Moreover, Shawn has been busy tracking the executive trajectory of the CIO for some time, and he brought his quantitative insights to bear in this Q&A:

BTR: It seems like the fight for CIOs — and IT in general — to be seen as a strategic asset to their organizations continues.  Your recent research is the latest contribution to understanding the impact that enterprise technologists can have on corporate performance.  Can you provide your perspective on how this quest for CIOs to have a legitimate seat at the table has evolved in recent years?

SB: If one looks back 5-6 years, the pervading CIO reporting dynamic was some approximation of 50 percent of CIOs reported to CFOs, 25 percent reported to CEOs and the balance to some other administrative or operational leader. Today, those percentages have essentially been inverted with 50 percent or higher of CIOs reporting to CEOs; 25 percent reporting to CFO’s and the balance to other functional leaders ranging from a head of shared services to a Chief Administrative Officer.

Typically if the CIO reports to the CEO, they will have a seat on the organization’s ExCo or equivalent, if they report to the CFO, it becomes more varied with the CIO sometimes sitting on the ExCo but more often than not, they will be a member of the next largest leadership cadre.  In the cases where the CIO reports to a head of shared services or CAO, they most likely will not be on the ExCo and perhaps not be a part of the next circle of the leadership hierarchy. It’s easy to generalize that if the CIO reports to the CEO, technology is leveraged as a strategic resource, and if the role report is to the CFO, then it’s a lever for cost containment and efficiency.

One can cite any number of exceptions to this perception but in many cases, this does in fact translate into the reality of how technology is deployed. Many of the most talented CIOs will not consider roles if they do not report directly to the CEO, irrespective of committee affiliation. That aside, the most important consideration, irrespective of the organizational construct, is ‘access’.  The ability for the CIO to communicate directly and honestly in an unencumbered manner with key stakeholders, be they corporate or line leadership is perhaps THE essential factor in positioning the role for long term success.

BTR: The argument is often made that IT still talks too much about bits and bytes…while business leaders want more of a dollars and cents discussion.  Most CIOs I talk to seem to be pretty business-oriented.  Do you still see a disconnect in how the IT community as a whole communicates with their business stakeholders?

SB: As a group, CIOs have dramatically improved their ability to communicate with the business but for many practitioners, there is still room for significant improvement. It’s the exceptional CIO who is genuinely immersed in the business to the point that business stakeholders see them as true peers or key partners.

Many CIOs mistake the ability to deliver projects or programs in support of what they believe to be a desired ‘commercial’ outcome as the penultimate value. This process orientation, though an essential competency for success can often obscure the CIOs ability to engage line management in the kind of candid, meaningful dialogue that ultimately creates the most compelling result, the ‘change the business’ value proposition.

The inherent pressure to run a robust, secure and scalable functional utility keeps many CIOs focused on solving yesterday’s problems and robs them of the time and bandwidth to focus on genuine innovation and strategy.

BTR: At this point, it is hard for me to imagine how any organization can be successful without effective stewardship of their technological resources…and future investments in these resources.  So this is a two-part question: What do technologists need to do to make themselves more relevant to their organizations? And: Does the business side have any responsibility to be more proactive in how they work with IT departments to glean strategic benefits from enterprise technology?

SB:  Let’s start with the first part. Today’s CIO’s are at a precipice. They can either cross it by delivering truly innovative value to their organizations though the confluence of technology and commerce or they risk being marginalized into albeit important, but more tactical ‘systems’ professionals, while the most meaningful aspects of the role are abdicated to ‘business’ people including the emerging Chief Digital Officer function who are prepared to take ownership for deploying technology in order to shape the strategic course of their organizations.

Now, for the second part of the question, I would say we have seen a significant increase in the degree of engagement and sophistication on the part of the business as they work with IT. Some of this can clearly be attributed to the ‘consumerization’ of technology, the proverbial ‘Apple effect’.  Users in general have a heightened set of expectations for what IT should be able to do and third party service providers are more than ready and willing to take advantage of this shift.

As the cloud becomes ubiquitous, these expectations will geometrically increase and vendors are laying the groundwork to marginalize or even displace the CIO who doesn’t have a plan to address this evolution. This is happening right now in the small to medium enterprise space, and is quickly spreading to mid-market and large cap organizations. Size, complexity and legacy protocols might slow adoption but will not stop the inevitable. CIO’s who embrace this trend of the engaged, empowered user stand to increase their relevance, while those who resist can hang on for some time but eventually the market will speak and their fates will be sealed.

BTR:  What do you see as the practical steps that need to be taken by CIOs to fulfill the full potential of their careers…and the contribution that IT can make to achieving strategic organizational objectives?

SB: Genuine immersion in the business is essential for the CIO who wishes to remain relevant, let alone realize their full potential. As the experts on a subject that pervades every aspect of the enterprise, the CIO is uniquely positioned amongst all functional leaders to understand what exactly is happening across the enterprise at all time.

They are the custodians of one of the most essential assets: information. Their ability to leverage these resources, whether it be improved decision support, predictive analytics, product development, or enhanced customer experience, the opportunities are myriad.  By moving beyond the operational paradigm and working in direct collaboration with line and functional leadership as a catalyst for innovation, CIO’s who develop this repertoire will consistently find themselves sought out to help solve the most challenging opportunities.

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About lcooper

Lane Cooper has over 20 years of experience as a researcher, reporter and editor analyzing the business and technology industry. On average, Lane meets with 600 CIOs and senior enterprise executives every year to understand the impact of evolving technological developments on organizations of all sizes across all industries. He has organized and moderated many live and online events and works with a variety of high-tech organizations to ensure that information is presented in a context that is useful to an audience of sophisticated technology buyers and implementers. He is a Contributing Content Partner to CIO Magazine, Network World and Computerworld. Other news services and magazines that have carried his by-line include: Voice Report, Network World, Byte Magazine, TechWeb, Optimize, Information Week, Telephony, Communications Week, ComWeek International, and Enterprise Systems Journal. He lives in Washington DC, where he is the Editorial Director of BizTechReports, an independent reporting agency that analyzes user trends in business technology.