Monday, June 25, 2012

The value of a CIO

I had an interesting discussion with an executive search professional who called to ascertain interest in a position with her client. Her company is known as one of the premier head hunters that work only on C-level placements and does a good job of that. Her client, a large diversified group, wanted a business IT professional for the position of a CIO, reporting to the Group Chairman. She believed that the position was exclusive and merited attention.

As the discussion progressed, she sought my view on current CIO compensation levels. I pointed her to research done not too long ago by an IT publishing house that provided the range in which CIOs were placed with slices for industry, experience and location. She expressed dismay on the median and the fact that most of the IT leaders titled CIO were underpaid in her opinion in comparison to other CXOs. Her data points were the placements her company had executed.

Ruminating over the discussion I saw a thread on one of the professional social sites on a similar subject. Is CIO compensation in line with other CXOs in the company ? Does a company perceive similar value contribution by the CIO ? Are there CIOs out there who earn more than their other CXOs ? The answers validated the revelation the head hunter had a few days back. Most CIOs are ill positioned and not on par with their peers (my definition: 5% variance is on par); the exception group is miniscule.

What contributes to this situation ? Is the gap due to the position being still seen as a service provider and not an equal to say the CMO or the CFO ? Does the person in position influence the decision on the monetary value ? The industry variance exists though the gap varies. I started scanning data from other countries and found that the story was similar. Exploring age or experience gap, the data revealed that this factor was not relevant.

What is the CIO worth to a company ? S/he keeps the business humming 24X7 across locations with connectivity, business applications, mobile connectivity, information on demand anytime anywhere, business intelligence and analytics, sales force enablement, supply chain visibility, production planning, customer relationship and engagement management, ecommerce and m-commerce, scheduling and operations of flights, hotels, information security, business continuity, phew ! Is all this of any value ?

Ask anyone in a company the challenges and chaos or the disruptions when any of the above stops working. The impact varies by company and industry as the elasticity is defined by multiple factors. Antagonists will say all this can be outsourced; yes it can be, however someone has to first set it up before the operations can be given away. Even total outsourcing retains part of the IT team along with the leadership to strategically keep the technology in line with the changing market and needs.

I believe that the value of the CIO is defined by the CIO. The discussion, debate, and engagement of the IT team with stakeholders; articulation of change, success and the value creation with IT systems contributes to the perception of value. Contributions to business decisions add up; taking a position on issues not just limited to IT make a well-rounded business leader and earns respect at the table. How the IT team interacts and presents itself is a reflection of the CIOs leadership.

Will all this bring value commensurate to the effort and monetary reward comparable to others in the enterprise ? The suggestions above are a small representation of CIO behaviours that contribute to his/her locus standing. Each person has to find their balance and align it to their reality; don’t try to change the world, change yourself for your own sake. I am saying this from personal experience.

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