Monday, June 18, 2012

The Role of the CEO

The relationship between the CIO and the CFO has been discussed with adversarial undercurrents as the general perception about the CFO portrays a beanie counter. This is analogous to the CIO remaining the EDP Manager, but the prototype has stayed stuck; in a similar vein where the belief continues that the CIO has not evolved and is still the Chief Technician who fixes Boardroom projectors and the Boss’s email.

Recent time, with the resurgence of social media, has seen the emergence of another debate about the CMO cornering a large proportion of the IT budget. This news which could be based on some data points in a survey in a small geography for a sub-segment of a domain, the conclusions depict the CMO usurping the CIO chair; a real stretch of imagination, but which has a group of CIOs vehemently opposing this purported trend. Some discussion groups even want the CIOs to confront their respective CMOs and assert their power over the IT budget.

So when I had an opportunity to partake in a CEO get together, I was looking forward to clarifying a few assumptions and doubts. If you are wondering what this has got to do with the CFO and the CMO, well along with the CIO, they all typically report to the CEO who is expected to mediate in case there is a conflict within his team. The above presumed conflicts will sooner or later end up for arbitration or follow the general trend where the CIO backs off.

I love interacting with CEOs (including my own CEO); they are the better barometer of IT progress and use within their company than the CIO is. As the primary leader of the enterprise, s/he sets the behavioural norms and culture of the company. Their belief system percolates down the spine of the company influencing processes, process discipline, technology deployment and use, risk behaviour and finally the cohesiveness of the Executive Committee that runs the company.

Since I knew most of their CIOs it was easy to create correlations: big manufacturing CEO used social media extensively, his CIO is well known for success; mid pharma CEO who thought of IT as a cost centre had high attrition in IT; diversified group young digital native CEO had the CIO soaring high from success to success. You get the trend; the CEO is the lead indicator of how the job of the CIO is likely to be in a company and where s/he will stand in case of a conflict with other CXOs.

If you benchmark companies with CIO reporting to CEO versus other CXOs, the comparison set clearly demonstrates the ones with the CEO fare better even when the CEO is not necessarily IT friendly. In the control group which ranges from 30-80% (CIOs reporting to CEO) depending on the geography and industry, the next differentiating factor is the CEOs appreciation, tolerance, averseness or indifference to IT. It is evident that the CIO directly or indirectly influences the success of the CIO.

Should the CIO be insecure about the span of control, budget, or technology disruptions ? Most CIOs aren’t but the hype created by various factions would make you believe that the CIO is shivering with fear uncertainty and doubt (FUD factor) on his/her future. Reality being diametrically opposite, I believe that CIOs should stop reacting to rumours and instead start proactive communication on the contributions to different parts of the enterprise in making the CMO or the CFO successful. Let them be at the receiving end for a change !

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