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by No Analyst or Consultant

CEO vs. CIO: Can This Marriage Be Saved?

Jul 23, 20038 mins
CSO and CISOData and Information Security

By James C. Weinberg,

Thomas Park

and John Boochever

A chief executive officer of a major industrial company in the U.S. heartland was speaking to an audience of chief information officers a year ago, discussing the role of the CIO in the modern corporation. In the middle of his speech, straight-faced as can be, he observed, “My CIO is probably my most essential manager. Without him, I don’t know where our company would be.”

The audience laughed. In fact, their laughter was more spontaneous and contagious than it was at any other time during that daylong seminar. The irony, of course, was that the attendees were completely unaware that the CEO was dead serious. For this assembly of CIOs, the idea that a CEO would call one of their number “essential” was, well, laughable. The unfunny truth is that CEOs and CIOs too often act as though they are partners in an enormously uncomfortable marriage.

Most CEOs see their CIOs as experts only in technology and service delivery, without a role to play in developing business strategy. Some other executive – the CFO, a business unit head, a sales manager- has to point the CEO in the right direction before technology become integrated with the strategic direction of the corporation.

CIOs, of course, are not blameless in allowing this perception – this breakdown in the marriage, so to speak – to take hold. Although they often say that they aspire to more strategic involvement, few technology chiefs have developed the business acumen and skills necessary to align their agenda with their company’s agenda, or with the business landscape in which their company must operate. CIOs should be defining technological initiatives in terms the business understands – speeding products to market, enabling growth, and reading costs and risks. If CIOs adopted that kind of approach, top management might be inspired to take them more seriously as partners in developing the company’s strategic direction.

In this article, we explore what’s gone wrong between chief executives and chief technologists and suggest some ways to make the marriage work.

We begin by identifying the three critical areas that need the most attention:

  • Organization: This involves how the CEO structures the management of a company – especially where the CIO sits in the decision-making flow.
  • Communication: Going beyond how CEOs and CIOs simply communicate with each other, this encompasses the way CEOs convey the importance of technology and of the chief technologist to the management team
  • Process: This entails where the chief technologist fits in the procedural makeup of the company and specifically deals with how much management control the CIO has over technology projects once they’re slated for business units.

Technology and the Org Chart

To leverage technology and integrate it with the company’s strategic business goals, it’s essential that the chief executive include the CIO among his or her closest advisors and decision makers. If the top dozen or so executives at the company set the IT priorities for the organization together, then the resistance to carrying out the IT agenda – for instance, concern among business units that technology is a cost item that will hurt their P&L results long before it helps – will be mitigated.

Of course, this structure requires greater strategic acumen from the CIO than many have yet demonstrated. CIOs can’t just argue for the technology in a vacuum; the CIO has to champion it by describing the transformational opportunities specific to the company that the technology offers. It’s also important for the CEO to understand that the parts of the CIO’s organization devoted to providing infrastructure services (for example, company networking, systems management) are different than other “business-facing” departments. The former are requirements and costs of doing business and it’s unfair to judge them on the basis of return on investment.. By failing to separate IT service from IT strategy – and comprehend that the CIO is ultimately responsible for both – CEOs often grow frustrated with their chief technologists, confused as to whether they should be asked to provide merely utility or something much more critical than that. The answer is, CIOs need to manage both, and for the relationship between CEOs and CIOs to work, that unique dynamic has to be understood.

Bridging the Communication Gap

Creating a management and decision-making structure at a company that includes a significant role for the CIO is only the beginning; after that, a CEO must strongly communicate support for not only the CIO, but also the technology that the CIO represents. Otherwise, turf battles between business units and technology champions will inevitably break out.

At the same time, CIOs are going to have to shoulder the burden of tearing down the wall between themselves and their peers in the executive suite by learning to frame technology solutions in a business construct and to balance them against other business priorities. There are many ways for a CEO to publicly express backing for the CIO. One is to put the CIO on the calendar for regularly scheduled meetings -at least as frequently as the CEO meets alone with the head of sales, marketing, manufacturing, and the like. This offers CEOs the chance to question the CIO about technological initiatives that are suited to the company’s plans. It’s also an opportunity for the CEO to share private corporate information, such as the existence of ongoing merger discussions, and elicit the CIO’s opinion. On the flip side, it gives the CIO a platform to show that he or she is ready for managerial strategizing.

Another way for a CEO to communicate support for the CIO is for the CEO to equate the organization’s success with the implementation of the most advanced and highly leverageable technology. That is what occurred at Kinko’s Inc., which has transformed itself from a campus-oriented copying center into a web of “branch offices” for small businesses fully outfitted with the latest networking, communications, and document-production technology. CEO Gary Kusin, facing rivals that range from stores like Mail Boxes Etc. to major manufacturers like Xerox, Canon, and Kodak, has publicly said that the current technology initiatives are just the beginning for Kinko’s and that the company’s future success depends on doing much more.

If the chief executive is a technology champion then the CIO must become the CEO’s very visible partner in this effort. CIOs may not have had the chance to develop internal managerial skills, but they must acquire them in order to present business rationales and carefully calculated return-on-investment scenarios. Similarly, CIOs must develop the ability to articulate to the press, industry leaders, Wall Street, and nontechnical employees the company’s core technology vision and how what flows from this vision will impact the organization’s financial and operating performance.

Kinko’s Chief Technology Officer Allen Dickason calls it being a translator and readily admits that it is a critical part of his job and, equally important, an essential skill if the relationship between him and the CEO is to be productive and respectful. “I have to be able to explain in plain English the details of the technology strategy that the CEO is alluding to,” he says. “If I can’t translate the excitement and the innovation in plain words – not techno-babble – that anyone can understand, whether they’re a business unit head or an investor at a road show, then I’m failing in the communication aspect of my job.”

Process Management

Process is the most difficult part of the CEO-CIO relationship to navigate. Even with the best intentions, it can take a long time to truly integrate the CIO into the core activities of the company’s business units. CEOs need to demand that when their CIO heads an initiative, he or she is responsible not only for developing and installing the new system, but also for managing (or co-managing with the business unit chief) the value that the system brings to the company.

Once he or she has the CEO’s imprimatur, the CIO has to foster the process relationship with business units by providing demand-management strategies that help scope, model, and prioritize technology expenditures. This way the business unit head has a good idea at the beginning of the budget year what the expected technology costs will be and can decide, with the CIO, how to spread the limited money available.

A Brighter Future

The CEO whose public commitment to his CIO drew a round of laughter at that seminar ran a company in which every strategic initiative had a technology component. In the face of difficult conditions in the CEO’s industry, the transformation of his company through technology is one of the few positive operational achievements keeping manufacturing and sales operations from collapsing.

Similarly, the CIO who steps up to the challenges of building and maintaining a strong relationship with the rest of the management team will soon realize the competitive advantage of information technology. Tactical attempts to bridge the distance in this relationship by improving organization, communication, and process are just the beginning. But they’re essential first steps toward the increased revenue, efficiencies, cost cutting, and innovation that can potentially result from a healthy partnership.

And who knows? Maybe then, no one will laugh.

Contact authors James C. Weinberg,Thomas Park and John Boochever.