Skills CEOs want CIOs to have

It’s never been a more challenging time to be a CIO as technology becomes ubiquitous and crucial if organisations are to stay competitive. This means strategic chief executives are starting to become very selective about the person steering technology strategies – one of the largest ships in their fleet – so IT leaders should come prepared to please as they step up to the helm.
Here are some of the top skills that CEOs value in a CIO today.

Understand business goals

Unsurprisingly, to enable business strategy, CEOs want their CIOs to know the business goals. If the CIO is invited to sit at the executive table, he or she must understand what the other leaders hope to accomplish.

“I’ve worked with successful CIOs because of their appreciation of what the CEO was trying to do, and their appreciation of IT as a factor for growth in the company, not IT as an entity that’s about just technology,” says Sharmila Shahani-Mulligan, CEO of ClearStory Data.

This also means contributing your own strategic planning by factoring in current and future technology trends, ensuring the company doesn’t waste time on investments that will make a difference today, and not tomorrow.

“It’s really important that CIOs are able to operate in the strategy space and be able to look at what’s going to be coming over the horizon, as the CIO is often the only person who’s equipped to make predictions about technology trends two to three years out,’ says Robert Hillard, managing partner, consulting with Deloitte.

Online shoe retailer, Shoes of Prey was founded by Jodie Fox, Michael Fox and Mike Knapp, the last of which also heads up IT. Jodie Fox, also director of fashion, says Knapp’s alignment with the founders and the overall business goals creates an “amicable relationship” between leadership and IT.

“What makes [Mike] great is that he is incredibly entrepreneurial and united behind the thought that we need to get to the best outcome for the business,” Jodie Fox says. “He’s also avidly interested in other parts of the business and cares enormously and equally about each part being the best it can be.

“Ultimately, business leaders want IT heads to be working with them to look for the best solution possible. IT is so critical to being able to execute on the strategy of a business. And when the strategy doesn’t understand the execution, it’s never ever a pretty ending,” she adds.

People management and customer service

As technology moves from back office to front office, the CEO will want a CIO that is practiced in soft skills, whether it is with their on premise teams, third party vendors, or their customers in the line-of-business (LOB) and beyond.

“Having knowledge of how the customer domain operates is key, and it’s not a skill that’s usually taught as CIOs have been progressing through technology streams,” says Hillard.

“It’s understanding consumer behaviour, whether it’s a B2C or B2B organisation — observing the behaviour of the buyer of the services and the drivers that cause that behaviour to change. CIOs have not been trained in this so they often need to focus on gaining those skills in order to have a peer to peer relationship at the c-suite.”

For top line growth to occur, the LOB and IT teams now have to co-operate faster as a team.

“When CIOs make critical decisions on what applications to use, and what solutions should be purchased, to have the CEO and LOB stakeholders in the room for that decision process and not make it an IT-only evaluation will aid that co-operation,” says Shahani-Mulligan.

“I’m seeing far more cooperation between the two sides and a much better goal alignment than has occurred in the previous seven years.”

Cost-cutting

Shaving expenses is hardly a new concept for businesses, and recent Gartner research shows CIOs in Australia and New Zealand can expect another budgetary decline. As Moore’s law keeps unleashing new capabilities, the CEO expectation is that CIOs should be able to do much more with less because the cost of the IT environment is dropping precipitously.

“There’s so much antiquated technology in large businesses today,” says Scott Dietzen, CEO of Pure Storage. “It becomes a huge detriment to being able to do new things and consider centre consolidation and application consolidation and so on, so I think the challenge for CIOs is getting out from under technology that’s no longer meeting the needs of the business.”

This could involve a focus on areas like security and implementing the use of smartphones as part of an overall mobility strategy. Meanwhile, data storage and management, with Flash storage, elastic cloud and SaaS, could be prime areas for cost reduction, saving the business money and freeing up dollars for innovation.

Innovation

Many CIOs may see innovation and cost cutting as opposing goals, but if done strategically this shouldn’t be the case. CEOs will want to know their CIO can manage their IT portfolios well enough so that both savings and innovation are possible.

“Companies that have massively outsourced their IT capability have discovered that one of the things they’ve lost inadvertently is a massive innovation capability within their organisation,” says Hillard.

“That’s been one of the drivers for many companies to bring some capability back in-house.”

CIOs need to have confidence in their innovation capability and be willing to demonstrate this to the c-suite.

“For a lot of organisations, while they understand the concept of innovation they don’t necessarily have structure around it,” says Hillard. “One thing that IT does really well is putting a structure around things and CIOs usually have a pretty good handle on methodology.”

By playing on their financial strengths and methodology capabilities, CIOs can take something ephemeral and make it concrete and measurable, says Hillard.

“They should start by actually helping the CEO to put structure on innovation, describing its contribution to the long-term financial health to the organisation, and suggesting a methodology to optimise the contribution that innovation can make to that long-term financial health.”

Financial capabilities

As IT shops have slowly been transformed into a service base, CIOs have had to gather a better understanding of financial management.

“As I look across the c-suite I think the CIO is one of the strongest financial managers on average,” says Hillard. “They need to actually leverage that as a key strength and apply it more broadly within the organisation as we move to more service oriented capabilities.”

Shahani-Mulligan says her CIO reports to the CFO, which she feels is beneficial for the finance piece.

“When IT works with the CFOs, they can factor the decisions into both the expense side and the top line growth side,” she says.

“They see the models, the operating plans and they can take the IT decisions and factor them into the grand plans of the company… the CFO generally is very closely tied to the CEO and business heads so it also creates a good connection [to the CEO].”

According to Deloitte report – Tech Trends 2015 — CIOs are able to help create new revenue streams for the business as part of a new ‘API economy’, where application programming interfaces developed by IT teams internally can then be shared and monetised through partnering companies.

To extend the use of these core functions, Hillard says CIOs will need to display financial management skills so they can advise on the cost to the business, and how these APIs can be used more effectively by third parties.

Transparency

While working to maintain this multi-faceted approach, it might feel as though the efforts go unnoticed.

The best way for a CEO to be able to appreciate the hard work the CIO is doing for the business is for the CIO to ensure full transparency, says Hillard; especially in the case of a CEO that may want to step in and micromanage.

“If you want to manage the person you’ll report to, you want to ensure that there’s complete transparency within your IT shop,” he says.

“Expose the working in full but also have in place processes that assure that it is self-managing… while the CEO is invited to be an active part of IT management, you’re actively seeking them to add value strategically rather than to get them to manage individual issues and trying to solve problem.

After all, says Hillard, the CEO is not likely to be an expert.