Digital transformation is every leader’s concern. However, when I meet with a customer’s management teams, each member looks at this transformation from a different angle. There seems to be a recurring sentiment that would best be summarized as: The CEO is the CEO and the CIO is the CIO, and never the two shall meet. This stems from the reality that for a long time now there has been a huge gap between the office of the CEO and the IT department. In fact, this gap is not only metaphorical, but literal with many still two organizational levels apart, with a CFO or a COO standing between them. Fortunately digital transformation is now driving the CEO and CIO closer together – and for the better of the company.
So are the CEO and the CIO completely different species? In short, yes! But perhaps we should not see the differences as troublesome, but as complementary, very much like baby-boomers differ radically from Generation X. Yet these generations work side by side, complementing each other’s strengths and wiping out each other’s weak points. Both the CEO and the CIO stand to benefit from working closely together in the same way.
As we know from Gartner’s 2017 CEO Survey, profit and revenue growth top the CEO’s list of priorities, but they are closely followed by IT related focus areas, with 47% experiencing pressure from the board to make progress in digital. And this is exactly where a CIO can help. Digital projects are the most likely area to support product renewal and innovation. As we heard from Fresenius CEO Pascale Wirtz recently in a series of CEO-interviews we conducted: “what the CEO needs to do is to find a way to have digital completely embedded in one, two or three business initiatives.” What better person to turn to than the CIO to ensure that new digital initiatives can see the light of day, since they know best what benefits new technologies can bring to the business. There’s a huge potential out there for the CIO to guide the CEO, or as Gartner’s CEO Survey puts it: “CIOs must see it as their job to gently educate their CEOs and expand their horizons.” Digital is far more than automating paper-based, back-office processes or setting up an e-business division, it’s transforming business models, increasing productivity, delivering better customer service, and ultimately takes you closer to the number one priority – increased profit and revenue.
Zoning to Win
In IT departments it has become common practice to work bi-modal or dual-speed: while back-office IT should be as stable as possible, areas of innovation require more risk-taking and experimentation. The CIO can definitely help the CEO in setting priorities and deciding where to build a fence between traditional business-as-usual and innovation. This bi-modal IT theory is reflected in business guru Geoffrey Moore’s the ‘Zone to Win’ strategy, which is getting lots of attention right now. In this strategy, a company divides itself into different zones that work towards different results and metrics. After all, digital transformation is very much like rebuilding a plane while it is in the air – you need to remember to keep the plane flying!
Getting the Numbers Right
At the end of the day, the CEO is focused on one thing – the bottom line. So making the case for an innovation project has to ultimately be a means to that (future) end, and tracking the progress of that project is another area where the CIO can prove their worth to the CEO. As seasoned business leaders, we know how difficult it sometimes is to get the right numbers, keeping in mind the relative performance of different departments. And that’s for business-as-usual metrics! When it comes to digital initiatives with new goalposts, it gets even more challenging to measure success. Together with the CFO, the CIO is best placed to first define the right metrics and then provide the numbers at the end of every month, demonstrating the progress being made and ultimately how this initiative is driving business transformation and growth.
Changing the Skill Set
Over the years, the role of the CIO and the composition of the IT department has changed enormously. As IT has become more strategic, the CIO morphed from ‘the IT person’ to a key player in the C-suite. And the rest of the IT staff have followed this path towards change, becoming business relationship managers rather than ‘just’ tech gurus. The rest of the organization will need to undergo a similar kind of change, acquiring new skill sets, creating diverse teams and encouraging an openness towards learning more about other parts of the company. Both the CEO and CIO will need to embrace new leadership methods and strengthen their interpersonal skills. This is an area where the CEO and the CIO can learn from each other’s experiences to ensure that talent is developed within the organization. After all, with great talent, comes great performance.
Being a Trusted Advisor
In the fourth industrial revolution that we are living now, the will to win is stronger than ever, especially for the CEO. In the digital era, the CEO will be the explorer, charting out the strategy to discover new lands. The CIO will be his or her most likely choice for navigator, being best placed to steer towards game-changing tactics that will turn the strategy into a winning one. After all, the CIO’s role is not simply to follow orders, but to advise the CEO, helping him or her to see not only the waters they are in, but the massive opportunities on the horizon.