CIOs More Strategic than Ever

In conjunction with the launch of its Center for CIO Leadership earlier this month, IBM released a study from MIT and Harvard that shows 80% of the 175 CIOs polled now considered valuable members of the executive leadership team.

This is a dramatic shift from a 2006 IBM study that indicated 86% of CIOs were still longing for this opportunity. The huge swing is partly attributed to the survey’s geography—most respondents are CIOs of N. American companies. But, said Harvey Koeppel, the center’s executive director, the swing is also indicative of the increasing realization by other members of the c-suite of the importance IT plays in the strategic direction of their businesses.

According to the study, “Senior management increasingly recognizes technology as central to innovation and competitive advantage. As a result, more and more CIOs are gaining a prominent seat at the table in their executive teams and playing an active role in strategic business decisions.”

This said, only about 69% of CIOs are actively involved in strategic decision making. A significant number but one with room to grow.

The survey further reveals that organizations with high levels of IT involvement in strategic decision-making also rate significantly higher on the following measures of IT performance:

  • Company views the IT function as an enabler of business performance;
  • Company has effective IT/business relationships at levels below the CIO;
  • IT employees have the knowledge and skills to communicate effectively in business terms;
  • IT initiatives and plans are well-aligned with the overall organizational strategy; and
  • IT and business managers collaborate systematically Thus, it seems that the CIO’s presence “at the table” may catalyze more effective IT-business conversations across multiple levels of the organization.

    While these results are encouraging, challenges remain, said Koeppel. Globalization and nations such as India and China are putting a strain on the existing talent pool. Many recent surveys indicate the No.1 priority for IT departments today is finding and retaining good help. And, with the looming retirement of many Baby Boomers—the first “official” Baby Boomer applied for Social Security benefits earlier this month—this situation may not let up for some time.

    According to the survey, “’Identifying and developing high potential IT staff’ is considered above average importance by 78% of respondents, while nearly a third of respondents (31%) consider this one of their highest priorities. It is worth noting that IT staff development is significantly more of a concern to U.S.-based CIOs than those in other countries.”

    For many CIOs, another concern is bettering communication with line-of-business managers. According to the study, “Fifty-three percent of respondents consider ‘promoting collaboration between IT and lines of business’ to be a highest priority. Yet only 15% believe they are extremely effective in doing so, while nearly a quarter (23%) rate themselves at or below the average.”

    Yet, for many CIOs, these two areas are the ones they feel the least adept at. It is for this reason, and generating “good will” among leading CIOs, said Koeppel, that IBM launched the Center for CIO Leadership. CIOs need help in surmounting multiple challenges: they are no longer just in charge of bits and bytes, but responsible for innovation, process improvement, leadership, strategic differentiation, tactical execution of process, productivity improvements, compliance, security, etc., etc.