The Center for CIO Leadership has released research measuring CIO skills in four areas linked to enterprise success: leadership; business strategy and process; innovation and growth; and organization and talent management. This study does an important job highlighting CIO progress while highlighting areas where improvements are needed.
The Center's Executive Director, Harvey Koeppel, a former Citigroup CIO, summarized the study's findings during an interview with me last week:
CIOs are evolving into enterprise leaders, helping develop the strategic plan while driving innovation and growth. To accomplish this goal, speaking the right language and creating the right metrics are critical. Although operational benchmarks, such as availability and uptime, are important, CIOs must go beyond them.
I asked Harvey to discuss implications related to IT failure and success:
In many cases, failure results from issues regarding alignment, or lack of integration, between IT and the business. Although enterprise implementations can affect almost every function and area across a company, the business does not always fully understand or appreciate these impacts. CIOs have an opportunity to explain downstream benefits and impacts so they become clear to the entire organizational spectrum.
THE FOUR COMPETENCIES
The four areas reflect the Center's vision for leading CIOs higher in the enterprise value chain and support a key theme presented in the report:
[W]hile CIOs have strong confidence in their ability to tie IT initiatives to core business issues, and despite their having clear end-to-end “sight lines” into business operations, there remains a challenge in helping to drive the creation of the business strategy, and more clearly communicating the business value of technology as a key contributor to business success.
Leadership. The report suggests that most CIOs recognize the need to be an integral part of business leadership, as opposed to being merely a technical resource. Although CIOs perceive themselves to possess strong vision and leadership skills, the following graph suggests the business has yet to recognize this fully:
Old attitudes are hard to change, which presents challenges for both CIOs and the business. Although the report makes clear the "burden of proof" lies with CIOs, it also states:
[T]here are two sides to IT-business alignment, and recent writings have pointed out that business leaders frequently misinterpret IT’s role and may overestimate their own understanding of technology.
I believe this point accurately reflects shortsighted attitudes toward IT which exist in many enterprises. Although CIOs have come a long way toward breaking the "IT guy" stereotype, much work remains to be accomplished.
Business Strategy and Process. Although some CIOs do participate in establishing enterprise business strategy, this graph shows fully 49% of CIOs have not linked IT performance metrics to broader business goals:
This issue represents a serious obstacle that IT must overcome in its quest to become a true strategic partner with the business. Realistically, non-technical business leaders will not make this conceptual leap unless CIOs establish clear, business-oriented metrics for their own team.
Innovation and Growth. The study calls this competency "potentially a significant area for CIOs to make their mark on the long-term success of their company," which makes sense given the importance of innovation in supporting strategic organizational initiatives. However, the gap between CIO vision and corporate funding is large:
The results suggest that formal funding relationships do not reflect the informal, self-reported role IT plays in supporting strategic innovation. This is yet another indicator that non-technical groups do not respect IT as an equal contributor to business strategy.
Organization and Talent Management. The study reports that CIOs generally have a strong vision for IT, although a significant percentage lack skills needed to execute their vision:
According to the data, many CIOs place insufficient emphasis on developing business skills within their own IT organization. Since IT execution plays an important role in project outcomes, this survey finding is consistent with high rates of project failure.
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Enterprise transformation initiatives, including technology projects, can succeed only to the extent that both sides share common goals, strategy, and vision. This study does an important job highlighting CIO progress while bringing to light areas where improvement is required.
