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How CIOs Can Contribute to Corporate Strategy
Chief executive officers and corporate boards want their digital chief information officers on the strategic team, but what can CIOs offer to the efforts?
5 Min Read
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Companies want CIOs to weigh in on corporate strategy, yet most CIOs find that they must carve out their own strategic roles. What’s the best way to do this?
At first blush, it might seem that there is no “best way,” because the idea of a CIO sitting at the corporate strategic roundtable is relatively new.
An initial driver for CIO strategic engagement was ushered in with the launch of digitalization initiatives. Digitalization made CEOs and boards realize that technology would be a driver of business success. This prompted a deluge of invitations to CIOs to attend strategic meetings, even though no one (including CIOs!) knew how and what CIOs would contribute. Ultimately, it was left to CIOs to define their own strategic business roles.
Rule #1: CIOs contribute to corporate strategy by defining their own strategic roles.
CEOs know they want the CIO at the strategic roundtable since it’s now obvious to everyone that technology enables business success, but that tends to be all a CEO knows.
That’s why CEOs and boards expect CIOs to establish their own strategic identities and worth. To do this, CIOs must first read the “tea leaves” of their companies.
Is it best to be a technology thought leader? I know of at least one case where that was all that was expected of the CIO in strategic planning. The CEO and the board wanted to know that they had an in-house “data architect” who knew what every system was doing, where every piece of data was, and how best to align all of it so everyone in the company worked with consistent, high-quality information.
In other cases, companies want a CIO who is so business-savvy that the CIO knows all the customer touch points and business pain points, and like a super physician can apply a magical technology balm to these processes, taking the pain away. I’ve seen CIOs do this, and some have even ascended to CEO positions.
Still other CIOs see themselves as technology trash collectors. They update technology over a series of years and get rid of the outmoded “boat anchors” that burden corporate balance sheets.
CIOs who are defining their strategic identities and the value they bring might choose one or more of these approaches, but one common path that they all travel is role definition, for there is no one else in the organization who can do it for them.
Rule #2: Contributions grow when you stick to business.
There was the CIO who established himself as a master data architect, and this satisfied the board and the CEO. But he was an outlier. This is because most companies want their CIOs to transform the business for the better. To do this, CIOs are building their business chops by studying finance, operations, marketing and sales, because they understand that they must get up to speed on how their companies operate and thrive above and beyond technology.
These CIOS analyze revenue streams, income statements, financial ratios, borrowing costs, customer behavior, and stakeholder concerns. They’re addressing these topics head-on in strategic meetings. This helps them gain business respect with their peers in the C-suite and with stakeholders, board members and the CEO.
There is also one “special insight” that CIOs possess and that other executives don’t: CIOs are integrally familiar with the enterprise’s portfolio of systems. Their work in IT has acquainted them with where they have systemic malfunctions and breakdowns. In a sense, the CIO is like an enterprise surgeon. He sees the breakdowns in those systems and can likely trace those breakdowns to problems in the business. If he can solve these problems with technology, he establishes his strategic worth.
Rule #3: C-suite teamwork pays off.
CIOs are at their strategic best when they team with other C-level executives in a digital transformation project that closely aligns technology with the business.
An example would be a new CRM system that gives everyone a 360-degree view of the customer experience with the company, whether they work in customer service, sales, marketing, product development, order fulfillment, or finance. It isn’t enough to ensure that systems and data across all functions are operational and consistent; you must also have the enthusiastic backing and participation of the executives who use these systems.
By teaming with their executive peers on digital projects, CIOs erase the old pattern of users coming to IT, asking for systems, and then returning to their regular business routines while IT works in the back room on a system that the users might not end up liking.
Communication channels develop and trust builds when C-level executives work together. A foundation of mutual work and trust is built that paves the way for more productive strategy making.
Rule #4: Go for the home run; don’t just get on base.
CIOs are not necessarily risk averse, but there are some who like to play their positions on the conservative side. If this management style fits your personality, you should probably stick with it. However, there is empirical evidence that CIOs who are willing to step outside of their traditional comfort zones -- say to propose a new business -- assume high risk but also cash in on high strategic rewards.
An example is the CIO at a well-known financial services company who developed a product in IT that was so innovative that he proposed a separate for-profit line of business for it. The board and the CEO approved, and the CIO became the CEO of a new subsidiary. This is an extraordinary example of where high-risk-high reward strategic business leadership can go, but if the shoe fits, go for it.
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