Of course, this structure requires greater strategic acumen from the CIO than many have yet demonstrated. Often, in fact, CIOs have to demonstrate their skills as strategists even before they are elevated to peer roles with other executives. (See “The Four Roles of the CIO,” at the end of this article.) In short, the CIO has to help the CEO justify remaking the organization to include the chief technologist among the top decision makers. To do this and eventually participate in the company’s agenda setting, the CIO has to learn to frame his or her technology solutions in a business construct and to balance them against other business priorities. For instance, that wireless sales network may have to be weighed against the option of hiring additional sales staff. The CIO can’t just argue for the technology in a vacuum; the CIO has to champion it by comparing it to the other choices that the company has and by using his or her unique expertise to describe the transformational opportunities specific to the company that the technology offers. For example, to make a case for recommending mobile access to data for existing salespeople, a CIO may have to work closely with the sales chief to jointly produce a concrete proposal with clearly delineated reasons — everything from hoped-for strategic outcomes, to improvements in productivity, to cost versus return — that the proposal will bring more revenue to the company in the next year or so than will adding 10 more people to actually sell the products.
That kind of cooperation between CIOs and business unit heads is rare. In fact, the wide gap between CIOs, CFOs, and other business managers may have a larger negative impact on corporate performance than the chasm between CIOs and CEOs. Understanding the importance of strategic technology in today’s business environment and how essential it is to continue to expand technological resources (even though this can be costly) is difficult for many nontechnical managers who are focused on the bottom line. It’s part of CIOs’ burden to tear down the wall between themselves and their peers in the executive suite — and it’s to their benefit to do so. As long as that wall exists, we believe it is virtually impossible to improve decision making involving technology implementation and to convince CEOs to view CIOs as trusted managers.
It’s also important for the CEO to view the parts of the CIO’s organization devoted to providing infrastructure services (e.g., company networking, systems management) differently than other “business-facing” departments. The former are not strategic activities — frankly, they’re more akin to utilities than core businesses — and it’s unfair to judge them on the basis of return on investment. They’re requirements and costs of doing business. By failing to separate IT service from IT strategy — and comprehend that the CIO is ultimately responsible for both — CEOs often grow frustrated with their chief technologists, confused as to whether they should be asked to provide merely utility or something much more critical than that. The answer is, CIOs need to manage both, and for the relationship between CEOs and CIOs to work, that unique dynamic has to be understood.
In some companies, typically outside the United States, the problem of distinguishing between the nuts-and-bolts aspects and the strategic aspects of the CIO’s job is mitigated by an organizational structure in which the corporation is run by a management board or an executive committee. Under this collective management approach, generally the person on the board responsible for IT is a nontechnologist — a senior executive — who has already proven his or her skills in the business and with whom the CEO is usually comfortable sharing tactical decisions. This nontechnical “CIO,” in turn, usually oversees an IT executive, for example, a senior executive VP or general manager whose job it is to lead the day-to-day IT organization according to the policies of the management board; in other words, to direct all the traditional procurement, software management, and infrastructure activities.