Earning a Seat at the Strategic Planning Table
Role of the CIO – Making the Job Fit the Title
The title of “Chief Information Officer” (CIO) was embraced by business about ten years ago, in recognition of the expanding strategic role being played by the Information Technology (IT) function and the resulting perceived need to include the head of that function in strategy discussions with the firm’s leadership. Title and reality are different things, however, and few CIOs were actually included in inner circle strategic discussions – most often due to the incumbent’s lack of political acumen and/or a general mistrust by senior management of all things technical.
Relegated to a support role, IT quickly saw its image in the organization return to its previous, often poor, levels. In fact, IT’s failure to live up to its inflated billing often led to further animosity and mistrust by its customers.
Notable exceptions were found in financial institutions, the airline industry and some service organizations, where IT was so crucial to the continued competitiveness of the business that inclusion of IT in strategic planning was necessary for competitiveness, if not survival.
Making the Transition
Organizational focus can usefully be thought of as having two dimensions: time and intent. The adjoining matrix depicts these dimensions and the transition that a CIO performing in a Support Role must make to gain a seat at the strategic planning table. A CIO who has failed to be accepted as a functioning member of the firm’s leadership team is frequently tempted to become focused on resolving immediate technological problems, i.e. dealing with “burning platform” demands.
The alternative, of making the transition to a role as a strategic technology advisor is not easy, cannot be accomplished quickly, and is only rarely accomplished by an incumbent.
When hired by firms disappointed in their IT function and interested in seeing IT take more of a strategic role, successful CIOs report taking some form of the following, often sequential steps.
First and continuously, build relationships. Open dialogs with other officers and key decision makers of the company. Speak in their language. Find out what keeps them up at night – and what problems they have with IT.
Second, fix the perception and reality of IT in the firm. Do this by focusing on basic blocking and tackling:
- Take steps to make IT customer-focused
- Run IT as a business
- Reengineer IT to enhance performance
Third, create a clear linkage between the IT Strategy and the Business Strategy. Develop IT Strategies, Architectures and Plans designed specifically to support the Business Strategy.
Finally, become proactive in the use of technology to transform the business:
- Find ways to use IT to add value to company products and services
- Use IT to strengthen ties to customers and suppliers and to provide new services to them both
- Find other ways to use technology to increase company profits
- Seek ways to use technology to dominate future markets
Business Risk/Opportunity
Firms with an IT function trapped in the Immediate Pain quadrant of the graphic often find themselves struggling to survive. As technology advances and becomes cheaper to employ, strategically focused firms quickly discover novel ways to use it to gain a competitive advantage (think of Charles Schwab, Amazon.com or American Hospital Supply). For a firm forced to constantly chase such industry leaders, low profits, low return on assets, and low esteem in the customer’s mind are the likely results.
Conversely, the use of technology to displace expensive resources, better serve customers and open new markets offers many financial and competitive rewards.
The Price of Complacency
Firms that lag their competitors are forced to undergo occasional radical change, including downsizing, overhead reduction, process redesign and portfolio rationalization; changes that carry with them sizable financial impacts and risks. Firms that take a proactive role in promoting the strategic role of the CIO lessen the business risk that results from being overcome by the technological accomplishments of their competitors. Before embarking on this course, an evaluation should be made as to where in the maturity matrix the firm’s CIO is located, the technological risk/reward factors associated with the firm’s industry, and whether it is appropriate to counsel movement toward the Anticipate Gain quadrant of the matrix.
Next Steps
For the CIO recently hired with the mandate to enable business transformation through the strategic use of technology, the following advice is offered:
- Establish a small R&D group within IT to ensure that you can match and then exceed the level of strategic use of technology in your industry
- Conduct routine focus group meetings with line managers regarding business issues, constraints, opportunities or risks they face
- Form a technology advisory counsel composed of peers from non-competing companies to seek novel ways to incorporate technology into your organization
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