As everything becomes digital, CIO success must increasingly be measured by business, rather than IT, outcomes.
How quickly the world has changed. Increasingly, CEOs tell me, “We are a technology company” that is in the business of banking, insurance, publishing, retail or other industry sector. In this new world order, key IT competencies and skills transcend the creation of an architecture or specific development methodology. Critical metrics for IT executives are increasingly measured by commercial contributions and desired business outcomes.
Unfortunately, many CIOs — and others aspiring to lead the digital business — are not gaining these competencies. Even more alarming is a broad lack of investment in the development of the right competencies for the technological growth of the business. In a Russell Reynolds report based on a recent global survey, “Rethinking People Leadership in IT: Four Key Findings for Improving IT Leader Selection, Performance and Succession,” nearly 1,000 CIOs and their peers shared their frustration at the gap they perceive between desired areas of mastery — including influence, leadership, performance orientation and strategic ability — and the ability of their direct reports to deliver on these areas. While CIOs rate people, results and change-related competencies as among their most important activities, they also view these areas as most in need of improvement among rising IT leaders.
In a decade and a half of recruiting CIOs, I have never seen the role of IT at a more serious inflection point. The demographics of the global workforce, and the associated covenants that these individuals have with employers, are rapidly changing, along with the very definition of work. Yet CIOs are not keeping pace.
As recently as 18 months ago, the archetype of CIO excellence was a general manager of an IT utility who could successfully deliver an ERP implementation, quote network uptime and deliver return on IT investment, measured primarily through cost reduction and process improvement. Many CEOs accepted these qualifications as rote; their CFO counterparts were equally pleased to qualify success as alignment with the balance sheet. Misguided IT leaders followed in lockstep, believing that they were “aligned with the business” if they could deliver on these metrics.
This premise is no longer acceptable — or even optimal — for maximizing corporate performance. CIOs must now figure out how to stay relevant during a digital transformation in which they risk disintermediation by vendors going directly to users (and vice versa). CIOs also need to manage emerging relationships at the board level, all while keeping things humming and secure 24x7x365.
The Future Is Now
I have often spoken about the on-demand future, when users will get what they want in the moment, made to order, in the media of their choosing, and in a secure, cost-effective manner. This is a huge change in IT service delivery, and it is no longer in the future. The future is now. IT leaders must effectively deliver a complex portfolio of services and solutions in an “on-demand present.”
As we wrote in another of our reports, “The Rise of the Chief Digital Officer,” there is a need for an executive who oversees the full range of digital strategies and drives change across the organization. I believe that a CIO must navigate this fluid landscape by balancing rigor with creativity and innovation. If the CIO job is increasingly bigger than any one individual, companies need to place a premium on finding complementary talent at all levels of the business — whether it’s outside partners or chief digital officers. The digital business deserves no less.
Shawn Banerji is a Managing Director at Russell Reynolds.
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