CEOs: Understand IT better - or else

CEOs cannot afford to pass the buck on transformational change driven by IT - a legacy of failed IT projects and wasted investment should tell them as much.

A major piece of research, carried out by Cranfield School of Management for the Chartered Management Institute (CMI), has led some to conclude CEOs must do more to understand technology. It's something IT departments have been saying for a long time.

More than a thousand projects studied over the past year, based on analysis of CEOs and CIOs who successfully delivered IT-led change in organisations as diverse as AstraZeneca, NHS Logistics, RNID and Tesco, found CEOs cannot afford to pass the buck to technical specialists.

One risk is that change programmes lose direction, so that after a period many stakeholders begin to wonder why a particular project was even undertaken.

In all, the research - carried out in association with the British Computer Society and the Change Leadership Network - identified five key issues for CEOs to tackle. (See box.)

Key CEO issues:

♦  how to create long-term transformational value rather than implementation of one-off IT projects
♦  the need to build capability for ongoing change so that IT shapes new business models instead of being the business model
♦  how to establish a climate of open communication so that employees understand what is expected of them and stakeholders know what to expect
♦  the need to manage risk with confidence
♦  reorganising the need for personal IT capability and learning about new IT issues so that IT change is driven from the top down

Source: CMI

Joanna Causon, CMI marketing director, said: "CEOs and CIOs are really important because they are setting the vision. This is not about IT systems but 'how can I prepare my organisation for the future?'"

Speaking at the launch of the report, Ian McCaig, lastminute.com CEO, said governance is key to getting much of the change - which he described as "accelerating, not steady state" - right. He set up a programme management office at his company purely to deliver on change.

However, some doubt whether the current generation of CEOs is able to adapt, able to get their heads around IT. For those who don't the message is clear.

BT Global Services CEO Andy Green said: "If CEOs don't understand, someone else will come along and eat their lunch. CEOs have to be prepared to learn."

The research was published in partnership with BT, Deloitte and Serco.