Management: Do CIOs Really Need a Seat at the Executive Table?By CIOinsight | Posted 05-03-2006
Mark Lutchen, the former global CIO at PricewaterhouseCoopers, wrote the book on managing IT as a businessliterally. The author of Managing IT as a Business: A Survival Guide for CEOs (John Wiley & Sons Inc., 2004) avers that CIOs don't need to sit at the executive table to be successful. What really counts is providing the business with systems and processes that are transparent and flexible. Doing so helps IT build credible relationships across the business, and earn the clout it deserves. Lutchen, who remains at PwC as a senior practice partner focusing on IT effectiveness, recently shared his insights with Senior Reporter Debra D'Agostino; what follows is an edited transcript of his remarks.
CIO INSIGHT: CIOs are constantly told that to get a seat at the executive table they have to think less like techies and more like businesspeople. Is that theory working?
LUTCHEN: In the late 1990s, many CIOs were seated at the executive table, and they blew it. They padded their budgets, they didn't measure their investments, and as a result they broke the trust they had with the business and ended up reporting to the CFO, who typically sees IT as a cost center.
And there still exists a number of CIOs who have come up through the IT channel but either haven't had or haven't taken the opportunity to broaden their skills. Many of them see their role as being merely a manager of technology. But at the same time, there's a group of CIOs who are clearly in the camp of embracing the business issues and understanding them. Those CIOs are moving forward with making IT more visible and transparent, putting governance practices in place to deal with portfolio management and business alignment.
These business-oriented CIOs are asking a new question: Why does being at the executive table matter? If you can work through the political matterswhich is a leadership skillthen you can build relationships across the company and create value whether you're at the table or not.
That may be true, but CIOs often face a credibility gap that makes it difficult to earn trust among business partners. How do they overcome that?
By running IT as if it were its own business. That's the greatest challenge. When you read about IT failures in the news, usually the real problem is governance. Someone wasn't watching the ship. And that's where the real fault lies. Many forward-thinking CIOs have expanded their role to be more like a CEO as opposed to a technical position. They are restructuring their IT organizations to make the most of marketing and communication and finance. You don't run a company without a CFO, for example; how can you run IT without one?
Not a bad idea, but not all companies are keen to appointing a CFO of IT. How do you suggest putting theory into practice?
With small steps. Pick one area and show that you can bring better information to the discussion. Finance is an easy place to start because in many cases CIOs report to the CFO. For example, the CFO generally wants to know certain things about IT spending. The CIO ought to connect with the CFO and say: "We want to provide this transparency around spend, can you help?" Get someone from finance to help you do what they already know how to do, like activity-based costing, reporting and so on. If you partner with them, the data will be far more trusted because you are making the solution collaborative.
You can do the same thing in HR. Go to your human resources director and ask them to help you assess your IT shop's skills. It won't happen overnight, but once you lay that first brick down and create transparency around a certain area, you start to gain traction. All you need to do is build one good relationship, and then others will want to pick up on a good thing. Eventually, you will be seen as a trusted advisor, a change agent who can enable innovation. And that's more valuable than whether or not you report directly to the CEO.