CEOs to CIOs: Get Strategic or Get the Boot

Three chief executives of U.S. organizations attending a recent conference said that in the past few months, they have either redefined the roles of their CIOs or just given them the boot for not embracing a more business-oriented strategy.

"We replaced our CIO yesterday," said one CEO, consulting his watch. "The axe should have dropped on the old one, and the new one should have started by now."

The former CIO "kept talking technology," the CEO complained. "He wasn't focused on how the technology could serve the business."

That scenario highlights a growing problem, said Giga Information Group Inc. analyst Peter McAteer, who sparked the comments with his presentation at Computer Associates International Inc.'s recent CEO retreat in Colorado Springs. Information technology has become so fundamental to a business that IT management issues are too numerous and varied to be defined in a single role, he said.

"It's illogical to look for a knowledge expert with phenomenal communication skills," he said. "You want Superman, and he doesn't exist."

At emergency medical services supplier American Medical Pathways in Aurora, Colo., primary IT responsibilities are divided between two positions, said CEO Steve Murphy.

A technologist balances between managing IT and answering technology questions, while a strategist ensures "we're asking the right technology questions to meet our big objectives," Murphy said.

At Montana State Fund, a workers' compensation insurance broker in Helena, CEO and President Carl Swanson has instituted a reorganization.

"With 200 employees, we're too small to have separate CIO, CTO and COO positions," Swanson said.

The restructuring involved a split of the company's IT responsibilities, he said. Two senior vice presidents, one concerned with running IT systems, the other responsible for integrating IT with business objectives, will report to Swanson when the reorganization is complete Nov. 8.

"We need to work closely with the IT people," said Mark Barry, who will be Montana State Fund's new corporate support vice president, the man charged with business integration. "But we need to understand the business, not just the technology."

"Role-splitting is only part of the issue," McAteer said. "CEOs need to become more technically literate. Ultimately, they're the ones who make the [CIO hiring] decisions, and if they make poor selections, which is suggested by the high turnover rate for CIOs, they have to take responsibility. Managing the culture is part of the CEO's job."

The best way to manage the culture and structure IT responsibility is different at every organization, McAteer said.

At a new dot-com, for example, growth is often so rapid that it makes static role definitions useless, he said.

When a brick-and-mortar company sets up a dot-com as a subsidiary, the subsidiary's hierarchy often mirrors the parent's, he said. Duplicating the parent's division of responsibility is unlikely to suit the smaller organization, he said.

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