CIO should stand for innovation, consultant says

Most CIOs do an excellent job of overseeing IT operations, but few lead their companies' efforts to get real business benefits from IT.

That finding, from McKinsey's Next Generation CIOs report, was the theme of presentations by Auckland management consultant Geer Iseke at CIO lunches in Auckland and Wellington earlier this month.

Iseke posed the question: "Are CIOs up to the challenge of finding ways for IT to change the company, not just run it?" and noted that many chief executives view IT as a service function, not part of business strategy.

He identified four key CIO skill sets -- leadership of the IT staff, domain knowledge (ie technology knowledge), general management and, lastly, strategy and planning.

The fourth and final skill set is "where business and IT meet" and it's an area where most CIOs could improve their skills, he says.

So how does that happen? An ideal way would be for the CEO to give the CIO an equal seat at the strategy table, but that "doesn't happen often, because the CIO doesn't usually make the grade."

Upskilling CIOs in strategy can be done a number of ways and an interesting one raised by Iseke was the tale of a CIO at a large European bank who formed an alliance with the chief financial officer.

"The bank had thousands of IT seats and the CIO was good at traditional CIO functions, but the organization's operations weren't aligned to its strategy.

"The CIO formed an alliance with the CFO and proposed that the two of them work together in defining the bank's IT agenda."

It was a good match, Iseke says, "because the CFO understood the business domain better than the CIO and the CIO found himself a new position among the rest of the executives."

The point to take from the story is that you shouldn't be afraid to ask for guidance from others, Iseke says.

Rather than seeing IT in purely operational terms, CIOs need to help business leaders use and identify technology that works better and make users more accountable for the technology they're using, Iseke says.

Driving change in an organization that's under the control of another executive means having a good relationship with that executive is essential and CIOs can get on side with other executives by applying capital expenditure processes and ratios used in other areas of the business to IT.

IT management involves both demand side and supply side management, with the demand side equating to the traditional operational function and the supply side to the more strategic variety of management that CIOs need to exercise, Iseke says.

Supply side IT management involves identifying new opportunities for the business where IT can play a major part and, if necessary, CIOs should push for changes to the way the business values IT and accounts for it, he says.

Dividing the IT budget up among business units, as opposed to having one central IT budget, is a way to do that, he says.

Questions form the floor during Iseke's Auckland presentation included: "How do you address strategic issues if you spend 150 percent of your time on operational issues," to which Iseke responded "figure out why you're spending 150 percent of your time on operational matters -- is it a supply side or demand side problem?"

In such a situation, there could be a need for delegation, he says.

"I've found the power of delegation helpful."

Another point raised was "as IT managers, we need to push IT and technology to the business, but what about business' need to understand what we do and how they can help?"

There's no silver bullet, Iseke says, but he stressed good CIO-CEO relationships were key.

"It's a two-way street."

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