The CIO as Enterprise Change Agent (When IT Really Matters)

World-class CIOs increasingly understand that being an enterprise change agent is their most critical organizational role. Building on a solid foundation of credibility and business partner trust, these CIOs provide critical leadership in an area that truly matters to their CEOs and peers.

META Trend: Through 2006, CIOs will build on their IT strengths in pattern recognition, process creation, teamwork, and analytics to gain a seat at the business strategy table. Horizontal integration successes (for example, mergers/acquisitions, joint ventures) will result in most CIOs reporting to CEOs by 2008, with some gaining additional procurement, contracting, and facility management duties. As CIO duties change through 2010, so will their IT organizations, lieutenants, centers of excellence, and staff positions. Executive education complexity, however, will not lessen as markets and customers rapidly change.

Recognizing the dynamic change in today’s market forces, CEOs are intensely aware that their organization must be both able and prepared to respond rapidly. Simultaneously, they acknowledge that their organizations often lack this requisite capability for success. Indeed, a recent IBM Business Consulting Services survey of more than 450 Global 2000 CEOs found that less than 10 percent rated their company’s record of change management as having been very successful, while approximately 60 percent of respondents believed that major barriers to change are limited internal skills, capabilities, and leadership to manage necessary transition.

Best-practice CIOs are increasingly being viewed by their CEOs as the organization’s primary change agent. Indeed, an ultimate sign of success is when the CIO’s principal evaluation criterion is his or her ability to drive change. Although only 5 percent of Global 2000 CIOs explicitly identify this change agent role as their primary goal today, our research indicates that 25 percent are likely to do so by 2007, spurred by a growing realization of the ability to drive significant improvements from the relationship between process and underlying infrastructure across organizational silos. For the 5 percent of Global 2000 organizations that are truly world class, it is this fundamental ability to translate strategy to execution, via a successful transformation capability, that distinguishes them on a sustained basis.

The Emerging CIO Change-Agent Opportunity. CIOs are often uniquely placed within their organization to both understand the real-world transformation challenges as well as identify enterprise breakthrough opportunities. Indeed, the IT organization’s (ITO’s) inherent implementation role in major change initiatives such as ERP and CRM (necessitated by the intrinsic system impacts) leads to a deep appreciation of the requisite critical success factors for change. This insight, coupled with the ITO’s visibility across organizational silos, enables the CIO to discover and more quickly develop enterprisewide change opportunities.

Best-practice CIOs have a window of opportunity to capitalize on the unique perspective of the ITO and further expand their sphere influence as enterprise change agents. Depending on the specific organization’s structure, culture, and industry, this role can be characterized in numerous ways, such as transformation, change management, and in a few cases full cross-functional business process responsibility. This enterprise change-agent role dramatically elevates the ITO’s fundamental value proposition and perception to the extent that, when well executed, the CIO becomes one of the CEO’s most trusted allies on the executive team.

The Credibility/Dependency Threshold. CIOs striving to be an enterprise change agent must first earn a place at the business table by delivering in the more traditional aspects of the ITO’s role. This can be thought of in the context of META Group’s Credibility/Dependency (C/D) Matrix. Our research consistently shows that without reaching a threshold level on the C/D Matrix via a demonstrated capability and real-world results, CIO’s are not positioned to be successful in an expanded leadership role. Specific examples where a threshold level of performance and trust is a prerequisite include IT operational stability, fiscally responsible management of the IT cost structure, project portfolio management, and project delivery excellence. CIOs that exhibit mastery of managing and optimizing the ITO often have the requisite leadership attributes, and the hard-earned organizational respect, to effectively contribute and lead as an enterprise change agents.

What Should CIOs Do? Leading CIOs should develop a phased plan to significantly enhance both their personal (and their ITO’s) change-agent and transformation capability. Focus areas of the plan include the following:

• Committing to becoming a change agent: Successful change managers walk the walk and talk the talk. World-class CIOs (
• Upgrading transformation competencies and capabilities: Having committed to the importance of becoming a change agent, CIOs should invest in developing the requisite transformational leadership skills. This includes training, real-world application, and embedding in the culture capabilities such as structured change methodologies and behavioral change-management disciplines. World-class CIOs zealously build deep knowledge and expertise in the change-management dynamics of their organization, industry, and competitive landscape and include emerging trends, best practices, critical success factors, and economic, cultural, and human realities. They relentlessly study and leverage related disciplines such as Six Sigma, business process re-engineering, and total quality management, as well as lessons learned from their enterprise program management offices (EPMOs).
• Driving business results via improved transformation execution: CIOs should maintain a laser-like focus on creating business value via solid execution of the right transformation initiatives. Best-practice CIOs use an integrated set of enterprise disciplines (see Fig. 2), including strategy, portfolio management, architecture, and an EPMO function, which together optimize the end-to-end transformation process. By incorporating behavioral change management throughout the program and project life cycle, change agents further enhance the critical human components of the transformation. Ultimately, people enable change; successful leaders first ensure executive alignment, then motivate and focus the organization’s best talent to create a sustainable transformation capability that delivers the desired business results.>

  The single most critical change-agent success factor is that of leadership. Indeed, a leadership gap in all aspects of business, including the ITO, will severely constrain most businesses from rapid transformation. Our research shows that, of the many published characteristics that define leaders, the following three will be key: intellect, passion, and courage. CIOs stepping up to a change-agent role should be cognizant of these prerequisites and hone the associated leadership attributes.

  For best-practice organizations leveraging such an enterprise change-agent role, the lines between business and IT become both blurred and less relevant. The organizational entity created is that of a multidisciplinary team, encompassing the powerful combination of business, process, technology, and change-management disciplines. It is this melded business/IT transformation capability that is so critical to the organization’s success and consequently one that the CEO most passionately cares about and ultimately values.

  Business Impact: The role of enterprise change agent, though neither easy nor quick, has potential for leading IT organizations to raise the performance of the entire enterprise within its industry.

  Bottom Line: World-class CIOs, with requisite credibility and business partner trust, are increasingly expanding their influence to an even more critical role – that of enterprise change agent.