Is the CIO Crisis Here?
Tough times often expose weaknesses that already exist.
The recession has forced many companies to reassess their needs, especially for certain executive positions. An early victim: the CIO.
With so much at stake--everyone knows how important IT is to businesses--how can this possibly be happening? Is it simply short-sightedness from our executive suites?
Or perhaps the answer lies elsewhere. Is it possible that we tend to value more what we understand better?
Too many CIOs have failed to convey the strategic value of the position to their executive colleagues, and a number of companies--News Corp., Harrah's, ConocoPhillips and Ogilvy & Mather Worldwide, to name a few--have decided not to replace their former CIOs for now and have asked the second-in-command to "just keep the lights on." Meanwhile, elite CIOs are busy strategizing with their C-level teams as to how IT can reduce costs at a time when money is so tight.
But the reduction in corporate CIO positions seems to be about more than just a performance issue. Why are we not cutting other C-level executives? Why not eliminate the chief financial officer and let the controller "just pay the bills"?
The CIO role needs to be more legitimized, and I believe much of the thinking behind recent CIO cutbacks reflects the lack of a real professional body to support the role. Let's face it: No one in the executive suite would ever think of eliminating the role of CFO. In a large part, that is thanks to the legitimacy given to the CFO position by organizations such as the American Institute of Certified Public Accountants (AICPA), which establishes best practices and acts as an advocate for the profession.
IT leaders need to educate corporate executives through a coordinated body of well-respected CIOs and researchers. This is not to suggest that an organization is needed to control the CIO role;
I think CIOs would agree that we are a long way from determining standards. Rather, we need leadership from an organization that can help CEOs better understand how to manage and govern the use of technology in their businesses.
Five years ago, I completed a study for which I interviewed more than 40 CEOs, and a great majority of them recognized, in some form, the strategic importance of IT to business planning. One stated, "More of our business is related to technology, and therefore I believe IT is more important to strategic planning." Still, this sense of importance remains somewhat intuitive: "I cannot quantify how IT will become more strategic to business planning--but I sense that job functions will be dramatically altered."
In terms of how IT is viewed by other departments within a company, responses varied. A little over one-third of respondents felt IT was reasonably integrated within the organization. A majority, however, recognized a need for greater integration.
The important result of this study--and others like it--is that CEOs undoubtedly value IT. The problem is really their lack of knowledge about how best to manage the function. This is where an organization of peers becomes important: We need to step up and create the guidance that CEOs are asking for. Once we reach the CEO, information will likely trickle down to the other C-level executives who participate in managing IT, particularly the chief operating officer and CFO.
This peer group could do many things, such as create best practices and CEO management guidelines, form a lobbying group, and conduct industry research. There are likely many more issues to put on this short list, but until we establish ourselves as a true profession, the need for a CIO will continue to be debated in many companies.
I have started the process of inviting senior CIOs and other technology executives to join the discussion with me at Columbia University. Let me know if you are interested in joining us.
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