There are many ways to define the future role of the CIO.
You can define them in terms of amplifying their current responsibilities. The CIO as uber technologist.
You can define them in terms of filling gaps in their current responsibilities. The CIO as enterprise change agent.
You can define the role as converging with others. The CIO as business leader.
There is nothing wrong with these characterizations per se, but they all look at the CIO role from a narrow persecutive — the individual.
As far as I can see, the CIO is a member of the executive leadership and that is a team sport. Therefore looking at the future of the CIO from a team persecutive should realize a interesting and important view on their future.
An executive team is a team. The best teams have a sense of common purpose and a diversity of complimentary skills and roles. The CIO is an important member of the current team, that is responsible for:
- Overseeing and governing current operations
- Executing the current plan by realizing the revenue, profit and other results that create current shareholder value.
- Demonstrating the long term viability and future of the enterprise and therefore the reason why you would want to become a shareholder.
- Making the changes necessary to realize that long term vision, often refereed to as the strategy.
While the executive team is jointly responsible for these things different members of the team champions different aspects of these responsibilities.
Business Unit leadership concentrates on current revenues and operations within the scope of their business unit or agency governing and operating their groups to achieve their goals. Business unit leaders understandably have a focus on immediate needs and capabilities to address customers and markets now. In a commercial firm, revenue is the key metric that they concentrate on.
The COO is responsible for the overall performance of the enterprise. They often lead he enterprise wide operations that determine the company’s cost structure and therefore it’s current profitability both of which are a COO’s key metrics.
The CFO is concerned with achieving the goals in the current plan as they represent the earnings estimates that drive the company’s market value in the commercial marketplace and credibility in the public sector. Success is in meeting those commitments and maintaining financial credibility.
The CEO is responsible for creating shareholder value, most often measured in terms of the company’s market value. Achieving the current financial plan is an important aspect of market value, but long term value is created when shareholders judging your company a better investment relative to your industry peers and other investment alternatives.
So what about the CIO?
Well if you consider IT as operational you can se how the CIO would fall under the responsibilities of the CFO or COO and be a junior member of the team. I believe that this view is behind the 25% of CIOs reporting to the CFO and CIOs reporting to the COO. This is IT in it’s traditional view as an enabler of the business.
But what about the 38% that report to the CEO, what is their role?
Like the CEO, CIO’s are responsible for the long term viability of the business. But, where the CEO looks to the position of the company relative to market competitors, CIOs look at company operational performance relative to it’s past and future productivity requirements. In other words, where the CFO is the guardian of the financial model, the CIO is the guardian of the operating model.
Well because no other executive is responsible for the long term operating model and no other executive has the resources that determine company productivity in the long run. IT is now a significant source of leverage across the enterprise as information spans operational groups and fuels processes, communications connects people and processes and technology offers new service channels and methods. and throng time.
The CIO can position themselves for this role and set expectations be evolving their metrics to concentrate on Return on Assets, Equity and Invested Capital — measured through time and against the competition. These measures ROA, ROE and ROIC define the efficacy of the operating model and therefore become the key measures for the executive responsible for that model.
Implementing these responsibilities will require reshuffling current operating groups and responsibilities. Which is the focus of the next blog post.