By René Carayol, 8 December 2004 09:25
COMMENT This has been the year of the first silicon.com CIO Forum, an event where I really fired up the audience by saying it is easier for an executive to move from a non-technical business background to heading up IT than vice versa.
Boy did I feel the wrath of some of the CIOs and other IT heads in attendance - and even afterwards, from those who weren't at the event but read what I said on these pages.
I'd say there was a 70:30 split disagreeing with my thinking. This is both embarrassing and instructive.
I heard several criticisms.
"Why is Rene Carayol fit to provide that reasoning?" asked one tech boss.
"A trite statement from Rene" was the feedback from another.
But I didn't hear that from any CEOs. Research commissioned this year by headhunters Heidrick and Struggles is a good starting point in my defence.
A senior partner at that firm, Kelvin Thompson, has placed over 200 CIOs and their survey interviewed 250 CEOs. It asked, among other things, what are the main briefs they give headhunters. There are three.
First is the common cry of 'get me out of this mess!' It comes from an organisation fighting for survival, one where the former or current CIO has built a client-supplier relationship which is likely to end in the supplier getting the sack. The majority of IT sits in this category.
The second is a 'more of the same, please' scenario. An organisation is looking to keep its competitiveness. There is an IT and business partnership where IT is the junior partner.
This is better than the first brief but not perfect. The CIO is merely an implementer.
The final brief is where we have a CEO and board looking for a senior executive. They know they are looking to break away from the norm and do something different. This is exciting. This is progressive.
It comes from a position of 'The machine works and now we are going to leverage it.'
So take a step back a second. My view is that in the UK we are not seeing any discernible value from IT. The traditional IT director is seen as a cost reducer, all about efficiency. That is often against a backdrop of increasing expenditure, despite current analyst figures showing they are being asked to do more with less - that's because it is often less of a percentage of annual revenues, where revenues are often rising.
The cost of standing still is actually increasing year-on-year in some cases. Even an upgrade in a large organisation to Windows XP can cost millions. In his role as head of IT, the IT director is technology-oriented. He is good at supplier management and not into politics.
Now take a CIO. A CIO is all about leadership and politics. A CIO should be about growth of top line sales.
We are talking about a back office orientation versus a front office orientation.
About someone who is at their core defensive versus someone who is aggressive.
Kelvin Thompson at Heidrick told me that great CIOs are almost impossible to find. And that's a shame.
I want to make it clear that for those who do lean towards the former category there is nothing wrong with that, nothing wrong with being a utility. But the debate - and the debate I was involved in at the CIO Forum - was all about the front of the house.
One respondent who was critical of my position was actually an IT director reporting in to a CIO. I felt that actually proved my argument.
Let me tell you seven things that further characterise the new breed of CIO:
- They are visionary, inspired by a view of what the future of business will look like, not IT.
- They are revenue focused, not cost focused. This means their incentive plan is based on the growth of the business not cost savings. This will be like all executives whose performance reviews use key business metrics.
- They are brilliant collaborators. They are not afraid of partnerships and that means outsourcing and extending in other directions.
- They are business process re-engineers.
- They are comfortable with corporate governance, as all divisions have to be, and while they understand IT they won't get involved in its details unless they have to.
- They are not afraid to break rules - and create new rules.
- They are engineers but not technology engineers. Most importantly they are human capital engineers, they identify and nurture talent.
The debate then becomes what we're going to call this new beast. (And it's one that silicon.com has been having since the CIO Forum, as you can see here.)
To finish, let me leave you with this. First of all, hereÂ’s to the person who said: "The CIO is all about business leadership and until they've mastered that they will continue to live in the back office."
And - though I don't want to insult those in the back office - let me just say that a drone in the hive makes no honey.
Comments
There are 4 comments. Join the discussion
1. Scott Scott
I happen to wholeheartedly agree with what you are saying, and think that anybody dismissing this either feels threatened by the idea, or is not capable of stepping up to become a CIO of the future. I am an IT Manager for an SME, and have worked here for 12 years. Having worked my way up from the sole member of the IT department to managing a team of 13 people disciplined in software development, support desk, and data management, I have had to readjust at numerous stages of my career development. Without this ability to adjust, I would have been out of a job long ago, and would probably still be working a helpdesk (not that there is anything wrong with this). The point here is that the market is setting its own price. Business needs better IT representation at board level, not just a finance director with a part time interest. Why am I telling you this? Simply because I think that the 70% who refuse to accept your point are helping to keep IT in the self-pitying doldrums it constantly finds itself in.
Every department needs a leader, and in the past the IT Director has been a “for the boys” leader, who understands the day to day IT operation (hopefully), and is involved in setting nuts and bolts technology strategy, either in a hands on way, or through a (hopefully) capable IT Manager. As you say in your article, there is nothing wrong with this, and in fact for SMB it is crucial to have a hands-on approach as there isn’t the money or the need to support weighty management infrastructures.
The future reputation of IT depends on IT leaders sitting at the board room table doing as much politicking as the finance director, or the sales director. Not having that representation will lead to the continued perception that IT is the preserve of difficult techies, that can’t communicate, and just turn up at your desk to turn your computer off and on when it doesn’t work. As an industry we have to accept that this will happen. As an industry we need this to happen, otherwise we will continue down a road of missed opportunities, dissatisfied business managers, and an awful lot of expensively paid talent going to waste.
2. Jim Matharu
I think this is such a valid article, well being the Dir of IT of a small org , one has to wear both hats ... In my case not only do i wear these hats but also am a Lead in SAP or other business applications . So where does that put me ?
3. Alan Murphy
Rene, I would not normally split hairs with you over this but lets get the smoke out of the fire and focus on the issues.
The debate is not about title. Titles are only labels for external people to understand what sort of job you have. An IT director or CIO or CTO are all in effect, the same role title. I'm sure Kelvin Thompson, who place many such people, would agree. The one you choose or are given will depend on the existing culture for role naming in your organisation.
When I was IT Director at the Financial Times, all my board colleagues were called Director (except for the Editor). Our titles did not matter, we all knew our roles and worked seamlessly to make the company a better place to be and a better performing company. We frequently worked on each others 'patches' yet all had core accountabilities. If we had all been called Chief something, I'm sure nothing would have changed except our business cards.
The issue is about what type of role you have and how you execute it within your organisations culture and mandate.
Better executives always work in a intradependent manner, are business goals focused and drive the company forward (whether by increasing sales, reducing costs, M&A, collapsing, etc), but most importantly understand the difference between acting as a head of function and, for want of a better term, a general manager/senior executive.
In my experience the best boards are those where it is difficult to tell who does what - including the overall boss!
I don't disagree with Rene's overall list of attributes for IT folk working at that level. But a few are not tight enough;
They are visionary, inspired by a view of what the future of business will look like, not IT. - Totally agree
They are revenue focused, not cost focused. This means their incentive plan is based on the growth of the business not cost savings. This will be like all executives whose performance reviews use key business metrics. - Except for when the business mandate requires a cost focus. Businesses go through growth cycles.
They are brilliant collaborators. They are not afraid of partnerships and that means outsourcing and extending in other directions. - Totally agree
They are business process re-engineers. - Totally agree - this is actually the same skill as the previous one
They are comfortable with corporate governance, as all divisions have to be, and while they understand IT they won't get involved in its details unless they have to. - Not true, great IT leaders have a forensic ability that transcends technology and process to see the true nature of systems
They are not afraid to break rules - and create new rules. - Totally agree
They are engineers but not technology engineers. Most importantly they are human capital engineers, they identify and nurture talent. - Totally agree
I am not ashamed of my IT Director past, it has equipped me with a formidable set of skills and experiences to develop companies, but no more than a Finance director or Sales Director has similar skills. The key of course is that some organisations will value those skills more greatly that others. I do not however, think I am better or worse placed to add value to an organisation because of my IT background.
A good general manager/senior executive will be an asset to any organisation. The issue is what skills/attributes does the organisation need, not the title. From an IT point of view the issue is how do you turn senior IT managers coming up through the function with little general management experience into leaders with general manager/senior executive attributes and skills.
Alan
4. Janet Davies
Great article, a long overdue commentary. If the Headhunters had the imagination to find the right people and the Board had the vision to listen and consider non traditional candidates (including women) there could be significant advances for British companies.