At a time when technologies and market conditions can change on a dime, it doesn’t make sense for companies to craft five-year strategic plans. Here’s what they should do instead
Why CIOs should align their leadership with exponential growth
Craig Stephenson, managing director for Korn Ferry, will speak at the upcoming MIT Sloan CIO Symposium on a panel titled, “The Perfect CIO.” It's a compelling title because it begs the question – how can one define the perfect CIO when it is a role that is constantly changing in response to emerging technical challenges and shifting business priorities? The Enterprisers Project caught up with Stephenson to get his take on how CIOs can maximize their strategic position in the enterprise today.
The Enterprisers Project (TEP): You recently commented on CIOs playing a more strategic role in the boardroom. How does the CIO role of today compare to five or 10 years ago?
Stephenson: There have certainly been a number of changes to the CIO role over the last 10 years, and it’s now perceived more than ever as strategic to an organization’s success and having a greater impact on customers. Since organizations are grappling with issues such as disaster recovery and business continuity, customer intimacy, the fight for relevance, the need to modernize their platforms and an overall increase in technology budgets, CIOs play a larger role in helping make strategic decisions and driving impact for their organizations.
Additionally, according to Korn Ferry research, 60-70 percent of CIOs oversee a significant component of the information/cyber security function – something we expect to increase in the coming years – providing enhanced exposure to customers and regulators. CIOs are also playing a greater role with customers and how they interact with the organizations. Whether B2B or B2C, CIOs should quickly address any potential gaps or strategic opportunities with customers. This exposure to customers ensures they play an even greater role across the enterprise today and in the future.
Going forward Korn Ferry believes the role will continue to emerge as a business leader who is well-positioned to address a myriad of strategic and operational challenges across the enterprise. It’s clear that CIOs are becoming an integral part of the C-suite team with 56 percent of them at Fortune 500 companies now reporting directly to the CEO and less than 20 percent to the CFO according to our research, which is a significant shift from 10 years ago.
TEP: What are some barriers to collaboration and business empowerment that CIOs are experiencing as they attempt to stay ahead of rapidly changing technology needs and requirements?
Stephenson: First and foremost, modernization requires commitment and conviction from the Board of Directors and the CEO to ensure success and the greatest impact. CIOs continue to cope with limited budget dollars and resources. There is also the issue of broader acceptance from leadership teams to embrace change, manage and navigate ambiguity, and mitigate internal struggles around “who” owns the customer. This often leads to leadership teams (from both functions and lines of business) to delay decisions and ultimately impact results.
Additionally, there’s also the ever-present barrier of it being difficult to hire and/or retain top talent, which drives the need for HR business partners who understand the talent issues CIOs are facing. Regulators are increasingly playing a greater role. For example, within financial services regulators are minimizing the ability of CIOs to create impact since close to 65 percent of budget dollars are being spent on addressing regulatory requirements. Finally, disruptive technologies are clearly causing anxiety for a multitude of reasons. However, while impact is very apparent in several markets, like consumer, healthcare, and financial services, reports suggest 92 percent of startups are destined to fail.
TEP: What do you think is the most important thing a CIO can do to help their organization thrive in the digital economy?
Stephenson: Ultimately, the culture and alignment of an organization are pivotal to establish a flexible, nimble and strategic team to address a wide array of challenges, and the CIO can play a key leadership role in this effort. CIOs should continue to help the organization cope with ambiguity to maximize the impact of their leadership. They also need to demonstrate high levels of learning agility, since being able to deal with the unknown will be a critical leadership characteristic for success. CIOs are savvier about the urgency for customer-centric solutions and therefore need to have the ability to drive continuous dialogue and cross-functional fluency.
As a result, the role of the CIO is now arguably operating across the enterprise more than any other role, so communication and presentation skills at the board level and executive committee are essential too. Also, historically, CIOs employed a linear approach to leadership, which was aligned to operational aspects associated with the role, but today they need to employ leadership that is significantly more aligned with exponential growth in order to create greater impact. Once modernization efforts take hold and the digital economy is fully embraced, the role of the CIO will be even more strategic and include consideration as a CEO succession candidate.