The losers in this corporate family standoff are frequently the companies themselves. When CEOs and CIOs treat each other as if they’re from different planets, companies are potentially deprived of an essential component of any business plan: the ability to link the latest technology smartly and innovatively to the company’s strategic priorities. Imagine the missed opportunities from this troubled relationship — the unrealized benefits in customer relations, supply chain, inventory, and marketing; the internal knowledge networks allowing corporate sites around the world to share information in real time with one another that are never built; the mobile databases or distributed data channels that no one dares even consider; the potential efficiencies and improved productivity that never materialize.
Tally that up and it’s clear how costly the gap between CEOs and CIOs is to many companies. In the pages that follow, we explore what’s gone wrong between chief executives and chief technologists and why these relationships are constantly foundering. Our goal is to define a plan for making the marriage work.
We begin by identifying the three critical areas that need the most attention:
- Organization: This involves how the CEO structures the management of a company — especially where the CIO sits in the decision-making flow. Organization also comprises how skillfully the CIO uses his or her executive position to align the technology agenda with corporate strategic mandates and to produce a return-on-investment program that matches the business conditions in which the company is operating.
- Communication: Going beyond how CEOs and CIOs simply communicate with each other, this encompasses the way CEOs convey the importance of technology and of the chief technologist to the management team. This is crucial because the CIO relationship with management peers is frequently even more strained than the relationship is with the CEO. Communication includes how persuasively and intelligently CIOs express the technology agenda to the press, industry executives, investors, and employees in light of the company’s business, sales, manufacturing, and marketing plans.
- Process: This entails where the chief technologist fits in the procedural makeup of the company and specifically deals with how much management control the CIO has over technology projects once they’re slated for business units. Does the CEO trust the CIO only enough to let him or her be the head of the team that plugs in the machines? Does the CEO grant the CIO and the business unit chief co-responsibility for the nontechnological corporate decisions that have to be made when implementing a new technology?
Technology and the Org Chart
To leverage technology to the greatest degree and to integrate it with the company’s strategic business goals, it’s essential that the chief executive include the CIO among his or her closest advisors and decision makers. Different companies have different ways of formalizing the structure, but whatever the configuration is, the CIO must be an equal to the business unit heads. The reason for this goes well beyond just giving the CIO more visibility in the organization so he or she can proactively implement new technologies, although that is a possible by-product of this arrangement. More important, it’s a way to ensure that senior management — the top dozen or more executives at the company — set the IT priorities for the organization together. If they all “own” the technology agenda, then the resistance to carrying it out — for instance, concern among business units that technology is a cost item that will hurt their P&L results long before it helps — will be mitigated. After all, if the CEO and every other top manager agree that a $150 million effort to provide wireless connectivity for the sales force is a desirable project that will keep the company’s plants at the cutting edge of efficiency, the head of the sales unit could hardly be penalized for working with the CIO to carry out the plan.