Cio Leadership White Paper 2008

8/3/2019 Cio Leadership White Paper 2008

1/28

center or CIO leadershipA GLOBAL COMMUNITY TO ADVANCE THE PROFESSION

The CIO Profession:

Leaders o Change,Drivers o Innovation

October 2008

F O U N D I N G P A R T N E R


2/28

Te Center or CIO Leadership was launched in October 2007 as an open, independent industryorganization. Its mission is to become a highly respected ocal point or global thought leadership,research, education and outreach designed to advance the CIO proession. It will enable CIOs todefne and develop the competencies needed to establish themselves as strategic business partners andinnovative leaders that drive sustainable business value or their enterprise.


3/28

The CIO Proession:

Leaders o Change,

Drivers o Innovation

Page

center or CIO leadership

Executive Summary

In July 2008, the Center or CIO Leadership launched a comprehensive

survey with the goal o determining how CIOs worldwide assess them-

selves in our competencies that comprise the core skill set o the strategic

CIO.

The our competenciesleadership, business strategy and process,

innovation and growth, and organization and talent managementare

based on a detailed qualitative study conducted early in 2008. Designed

to uncover the competencies that CIOs need in order to perorm as true

strategic partners in their enterprises, the competency model comprised

by these our elements constitutes a core pillar o the Centers research

program. The results will provide the basis or uture education and content

development initiatives, in accord with the Centers mission o advancing

the CIO proession.

The sel-assessments are crucial to an understanding o the roles that CIOs

can and must play as their enterprises conront challenges on a global

scale. Not only are companies o all sizes aced with the eects o global-

ization itsel, but they must contend with pervasive, Web-based computing,

mass collaboration and the impact o the worldwide nancial crisis. These

circumstances present CIOs with exciting and perhaps unprecedented op-

portunities to demonstrate their value to their organizations uture growthand success.

The results o the 2008 survey present a positive picture o CIOs readiness

to help their enterprises succeed, and they shed abundant light on CIOs

diverse range ocapabilities to match their readiness to lead.

Overall, the results suggest that CIOs eel condent to step into strategic

leadership roles. From the survey ndings, it is apparent that CIOs see

themselves very clearly as leaders in their companies and believe they are

aligning more closely with key business objectives. In addition, the survey

results show that CIOs are evolving their skills in change managementakey attribute given the degrees o transormational change that many

CEOs believe necessary or the long-term success o their companies.

Their survey responses also indicate that CIOs are emerging as leaders o

innovation and bringing those ideas to the table, putting their end-to-end

knowledge o the business to use in thinking through new technology-

based opportunities.


4/28

The CIO Proession:

Leaders o Change,


Page


At the same time, the CIOs responses to the detailed elements o the lead-

ership competency prole suggest there remains a gap in whether they areperceived as leading the IT unction, or leading the business more broadly.

Findings show that there remains an opportunity or CIOs to grow as lead-

ers o the business, not just leaders o the IT unction.

The survey also highlighted opportunities or CIOs to continue to advance

and grow their skills. For example, while CIOs have strong condence in

their ability to tie IT initiatives to core business issues, and despite their hav-

ing clear end-to-end sight lines into business operations, there remains a

challenge in helping to drive the creation o the business strategy, and more

clearly communicating the business value o technology as a key contribu-

tor to business success.

In short, the survey ndings reveal several areas o opportunity or urther

advancement in CIO skills and competencies:

CIOs are leaders in their organizations and are playing an increasingly

important role in leading change, but they are still evolving to be viewed

as true trusted advisors by their business colleagues

CIOs have a seat at the table, but have yet to ully seize the

opportunity or participation in developing the business strategy

CIOs are emerging as leaders o innovation and bringing new ideas to

the enterprise, with a real opportunity remaining to ll the innovationexecution gap

CIOs know where they need to lead their IT organizations, but continue

to wrestle with delegation and with building the next-generation team

The study suggests several areas where CIOs can, by closing these gaps,

help spur innovation and growth or their enterprises.


5/28

The CIO Proession:

Leaders o Change,


Page


The ndings rom the CIO survey were paired with eedback rom inter-

views conducted earlier in the year with CIOs, academics and competencyexperts to gather qualitative input on the competency model. Where appro-

priate, we reviewed ndings rom past surveys conducted by the Center to

urther set the context or emerging patterns. What we have learned rom

this study makes clear the strengths rom which CIOs have to build, along

with the competencies that CIOs must now rene as they position them-

selves as leaders o change and innovation within their companies. The

learnings also give the Center invaluable insight into the education and skill

development necessary to help CIOs ulll their long-term business leader-

ship potential.

A New CIO Leader

Drawing on a series o one-on-one interviews and input rom CIOs, aca-

demic leaders and practitioners in the CIO competency eld, the Center

developed a set o core competencies that we believe are requirements

or CIOs looking to evolve and sustain leadership roles in their enterprises.

These competencies (see Figure 1) emphasize a set o strategic business

skills and abilities necessary to lead the organization to competitive advan-

tage. The our competency areas are:

Leadership

Business Strategy and Process

Innovation and Growth

Organization and Talent Management.

The competency model lays out a series o thirty-three specic strategic

and tactical actions that best-practice CIOs take to help drive their organi-

zations towards growth and increased competitiveness. (The detailed best-

practice actions are highlighted in the Understanding the Competencies

section starting on page 9.)


6/28

The CIO Proession:

Leaders o Change,


Page


The Center tested these competencies with a group o 270 CIOs around

the globe to determine where the proession sees itsel. Looking at thendings overall, it is evident that CIOs worldwide are very condent in their

roles as corporate leaders. They give high sel-assessment ratings on all

our competency categories, with a notably strong result in the Leadership

competencyparticularly regarding clarity o vision and ability to lead and

infuence.

Yet CIOs sel-assessments expose a gap between recognition and results

that carries throughout all o the our competency areas. In each compe-

tency category, there are noticeable dierences between CIOs levels o

agreement with and recognition o what is needed, and their assessment o

how well they are getting to resultsthe processes, models and resources

needed to accomplish key goals.

Leadership

Business

Strategy andProcess

Innovationand Growth

Organizationand Talent

Management

Figure 1: The strategic CIO competencies


7/28

The CIO Proession:

Leaders o Change,


Page


The gaps by themselves are not surprising, and the Centers study is not

the rst time that these kinds o gaps have been revealed. Recent articlesin technical trade publications and research reports rom industry analysts

and other sources validate the challenges that IT leaders ace in ully align-

ing their objectives and approaches with those o the C-suite.1 Further, the

conclusions o IBMs Enterprise o the Future CEO study point to areas o

emphasis in which CIOs, by their own admission in the Centers research,

have urther to go.

However, this study is one o the rst studies to parse CIO competency

ndings to this degree o specicity and useulness. We will highlight some

early thinking on tangible next steps later in this report. (See section start-

ing on page 21, How the Center or CIO Leadership Can Help, or moredetail on the Center plans.)


8/28

The CIO Proession:

Leaders o Change,


Page


CIO Survey Findings

ORGANIZATIONAL ADVANCEMENT

The 2008 study conrms that the CIOs surveyed have a substantial scope

o control and are among their organizations most senior managers; nearly

86 percent are enterprise-wide or corporate CIOs and they report directly

to the top executive ocers (See Figure 2). More than 40 percent have be-

tween 100 and 500 employees reporting to them, while 75 percent o the

respondents are at companies with at least 2,500 employees; more than

hal o the respondents companies have annual revenues above $2 billion.

The qualitative survey work undertaken by the Center indicates a move-

ment into the proession rom the business side. I come rom the business

side I have had roles in engineering and manuacturing, says the CIO o

a leading oil-exploration services company. I have an operational back-

ground and I dont know how I could do my job without that background.

Coming rom the business side is extremely valuable. I have easy access to

the management team and I have credibility.

0% 10% 20% 30% 40%

43.5%

17.6%

17.3%

6.3%

15.3%CEO

CFO

COO

Group CIO

Other

50%

Figure 2: CIOs report to the C-Suite


9/28

The CIO Proession:

Leaders o Change,


Page


Such cross-pollination is by no means a prerequisite or success as a

CIO, but it is a healthy sign or the proession. It is positive in terms o thekinds o skills that immediately enrich the IT unction and it bodes well or

improved alignment with the business and other key elements o business

strategy and process.

UNDERsTANDING ThE COMpETENCIEs

Analysis o the our competenciesleadership, business strategy and

process, innovation and growth, and organization and talent management

uncovered useul input rom CIOs on key strengths and areas or growth.

The ollowing sections provide a snapshot o the key nding rom each

competency, along with highlights o areas o progress made and opportu-nity gaps remaining.

Leadership

Snapshot fnding: CIOs clearly view themselves as leaders, but they

still have to nd ways to demonstrate their ull set o capabilities to their

business colleagues.

Progress made: Leadership is the competency category in which CIOs

recorded the highest sel-assessment scores. Overall, 84 percent report

that they agree or strongly agree with all o the nine key activities within the

Leadership category. (See sidebar this page.) CIOs are condent that theyprovide a clear vision o how IT is driving the business orward and 90 per-

cent eel that they are leading and infuencing without ormal authority. (See

Figure 3.) This advanced view o their leadership skills points to a shit in

how CIOs perceive themselves and in the potential that lies ahead as CIOs

look to lead the business more broadly.

0% 25% 50% 75% 100%

91%

90%

Clear vision of how IT will drive the business forward

Leadership and influence without formal authority

Figure 3: CIOs are leading in their organizations

ProvidethevisionofhowIT

willdrivethebusiness

Alignbusinesscolleagues

tomyITvision

Maintainstrongrelationships

withexecutivecolleagues

Serveasatrustedadvisor

withLOBsandmanagement

Seenasaleaderofchange

andtransformation

Leadandinuenceothers

CommunicateclearlyIT

strategieslinkedtobusiness

priorities

Buildstrongteamsand

trustedrelationships

Creategovernancemodel

thatintegratesbusiness

priorities

LeadershipBest-practice Actions


10/28

The CIO Proession:

Leaders o Change,


Page 10


An example o this advancement was explained by a CIO o a major U.S.

airline who is unequivocal about the need or her proession to demonstrateleadership. This is the highest priority, she says. Leadership means par-

ticipating in the articulation, communication, and setting o a shared vision

and then mobilizing the company to take action. Its more than just ac-

cepting the strategy and moving orward. Sometimes the technology is the

strategy. The CIO takes a bigger role. You can roll a lot under mobilizing a

company to take action.

Change management is another area where CIOs report strength. Eighty

percent report that they are regarded by their colleagues as a leader o

change and transormation within their company. The need or change

leaders was eatured in the 2008 IBM Global CEO study The Enterprise othe Future, which indicated that while 83 percent o CEOs expect substan-

tial change within their enterprises, only 61 percent report that they have

accomplished change successully in the past. In act, the study noted that

this gap between the anticipated need or change and the ability to man-

age it has nearly tripled since 2006.2 The Centers study results show that

87 percent o CIOs identiy themselves as leaders o change and trans-

ormation, possessing the skills and experience required to drive the CEO

agenda. This is especially important in terms o the kinds o transormation

necessary to achieve superior corporate growth over the long term. It calls

or particular attention on how to identiy and engage key stakeholders.

(See insert The Art o Stakeholder Management on page 20.)

Opportunity Gap: One leadership gap represents a signicant challenge.

CIOs assert that they have strong, established relationships with their peer

executives and are leading and infuencing across the organization, even

when they lack ormal authority. However, only 74 percent say their busi-

ness colleagues are aligned with that vision. A parallel gap is revealed

between the 90 percent o CIOs who say they know how to lead and

infuence and the 80 percent who claim that they are regarded as trusted

advisors. (See Figure 4.)


11/28

The CIO Proession:

Leaders o Change,


Page 11


The gap eatured in the above illustration suggests that CIOs continue toace a challenge in aligning IT with the business. While CIOs are making

progress in setting orth a clear vision, ewer o them believe that their col-

leagues understand and are aligned to this vision.

The Centers ndings are corroborated by recent research rom Center

partner, the Society or Inormation Management (SIM). SIMs most recent

annual survey nds that the number one hurdle cited by CIOs, CEOs and

top enterprise managers is alignment between IT and the business.3 A

2006 poll by CIO Insight yielded similar ndings: asked to rate the overall

eectiveness o the leadership at the CIO level o their organizations, 20

percent o business executives gave their CIOs an excellenthal thepercentage o CIOs who did so.4

O course, there are two sides to IT-business alignment, and recent writings

have pointed out that business leaders requently misinterpret ITs role and

may overestimate their own understanding o technology.5 There is an onus

on CIOs to get to the root o the challenge and an opportunity to bring their

colleagues around. We have a seat at the table, says the CIO at a leading

global bank. We have the benet o the doubt and now we have to prove

that we should have that seat at the table.

70% 75% 80% 85% 90%

74%

80%

90%

My business clients are aligned to my IT vision

I serve as a trusted advisor with line of business leaders and management

I know how to lead and influence others when I do not have formal authority

Figure 4: CIOs lead but ace a challenge in aligning IT with the business


12/28

The CIO Proession:

Leaders o Change,


Page 12


45% 60%

51%

67%

50% 55% 65% 70%

Actively participate in business strategy

Link IT performance metrics and business goals

Figure 5: CIOs have additional opportunity to link to business strategyand business results

Business Strategy and Process

Snapshot fnding: CIOs are making progress engaging with the busi-

ness, and they have a substantial opportunity to actively help drive the

business strategy rather than reactively participating in its development.

Progress made: Nearly 70 percent o respondents say they agree or

strongly agree with all statements regarding ITs understanding o and

readiness to help the business. Although the overall scores in this category

are the lowest o all our key competency areas, 85 percent o CIOs are

emphatic that they can link IT investments to one or more business catego-

ries; more than 84 percent agree that they have an end-to-end view o

their company and technologys role is to deliver business value to custom-

ers. The same percentage conrm that they ully understand the business

environment. You dont bring credibility unless you understand the busi-

ness, said one CIO.

Opportunity Gap: The survey suggests that CIOs still have opportunities

to orge stronger links between IT and the business. For example, just over

hal report that they have developed business value indicators that link IT

perormance metrics and business goals. (See Figure 5.) This is an area

where CIOs have an opportunity to continue to grow and it is one that is

widely reported as necessary in order or CIOs to be viewed by their peers

as leaders in the business and drivers o business strategy.

Understandfullymy

businessenvironment

Maintainend-to-endview

oftechnologysroleto

deliverbusinessvalue

Participateactivelyin

developingbusinessstrategy

Deliveronbusinessstrategy

throughplanlinkedto

businessgoals

LinkITinvestmentstokey

businessdrivers

Leadcleargovernance processforengaging

externalpartners

Seenasaleaderby

Industrypeers

Developindicatorstolink

ITperformanceand

businessgoals

MaintainITrisk-management

strategy

IntegratemyITrisk-manage- mentstrategywithenterprise

risk-management

Business Strategy

and Process

Best-practice Actions


13/28

The CIO Proession:

Leaders o Change,


Page 1


And while many CIOs seek to make progress in this area and many CIOs

are using metrics, the metrics they employ oten ocus on technology andoperations, rather than on business value and growth. (For a glimpse o

how CIOs can use metrics to make a dierence to IT eectiveness, see the

insert A Metrics Maniesto on page 14.)

At the same time, a signicant proportion o CIOs in the survey admit that

they are not deeply engaged in helping to drive business strategy; just two-

thirds indicated that they are active participants in developing the business

strategy or their companies. The remaining third o CIOs in eect operate

as recipients o the strategy, rather than an active partner in development.

Complementary research rom a recent study by InormationWeekconrms

this act. While 70 percent o CIOs gauge their eectiveness by their abilityto support company-wide business strategy, only 65 percent o line-o-

business managers use that criterion as their measure o CIO eective-

ness.6 Furthermore, the recent SIM study cited building business skills in

IT as the second most important priority or IT leaders.

One CIO who previously worked in the business explains, You cannot ask

your boss or prioritization o business requests. It is important to under-

stand the strategy and to have lived it. Having been in operations, I am

able to steer the boat in an aligned way. I may make some technical mis-

takes, but I have technical people around me who support me to ll

in those skills.

CIOs also have an opportunity to close the gap in their ability to manage IT

risk. By their own admission, less than hal say they have IT risk manage-

ment approaches that are integrated with enterprise risk management.

(See Figure 6.) At a time when IT risks are rising dramaticallybecause

o both the prolieration o data-rich consumer devices that are not always

sanctioned by IT and the looming infuence o proessional hackersthis is

a competency subset that merits particular attention.

30%

48.1%

My IT risk-management strategy integrated with

enterprise risk-management strategy

35% 40% 45% 50%

Figure 6: CIOs are still working to integrate their IT risk managementwith the enterprise risk management strategy


14/28

The CIO Proession:

Leaders o Change,


Page 1


A METRICs MANIfEsTO

How do you shit your IT groups mindset rom operations to revenue

generation? Think metricsand then put them into action.

That was the approach taken by the CIO o a large Indian communi-

cations company. In doing so, he overturned traditional specialized

outsourcing models in avor o streamlined single-source partner-

ships, re-thinking value measurement to emphasize customer-

based metrics, and creating a community-oriented IT culture built

on collaboration, teamwork and reciprocal value. In short, he used

these innovations to help transorm the business, and in the process,

achieved startling results.

With the harnessing o IT or customer and internal benet as one o

seven guiding principles o the companys change maniesto, the

CIO identied and launched several critical journeys or IT to propel

the change process. One o the most important was value measure-

ment: how to measure the business value o IT as an innovation

engine. Because IT had moved into the dual unction o servicing

business needs and driving deliverables, the CIO set up metrics along

two dimensions cost and revenue value.

On the revenue side, the CIO, in partnership with his senior business

colleagues, built metrics to measure the revenue streams rom new

products and services that were developed and launched rom within

IT. These metrics were deliberately ocused to look beyond the tech-

nology that enabled new product development, new deals, alliances,

and business development relationships that resulted rom IT-led

innovations and initiatives. On the cost center side, the company

measured value along three dimensions: unctional benchmarks that

assessed growth; nancial metrics that demonstrated direct cost sav-

ings and increased productivity; and eeler metrics that measured

satisaction with IT delivery and operations.

The companys board reviews unctional and eeler metrics only

once a year, allowing network roll-out to be the primary measure-ment o scale, not simply the nancials which were linked to revenue.

One-dimensional thinking does not adequately tell the story o how

valuable IT is to the business, says the CIO. Taken together, these

metrics provided a deeper understanding o the value o IT in achiev-

ing business goals and solutions.


15/28

The CIO Proession:

Leaders o Change,


Page 1



Snapshot fnding: CIOs clearly understand what their role in innovation

should be, but they are less successul in selling their belies and securing

the investments and resources needed to put their innovations into action.

Progress made: More than 80 percent o CIOs say their IT teams are

actively involved in identiying how IT can enable business opportunities or

their companies; about the same percentage report that they are leading

initiatives to ensure that the IT organization and the enterprise are fexible

enough to support rapid change. (See Figure 7.)

These are promising indicators, given the importance o top-line growth to

the CEO, and the role o innovation in achieving that growth. IBMs 2008

Global CEO study shows that innovation plays a two-old role or CEOs

linking with customers to collaborate and innovate; and innovating thebusiness model or dramatic marketplace impact. This represents a plat-

orm or CIOs to oer the key to new ways to serve customers and disrupt

the business model or competitive advantage through technology.

Opportunity Gap: While the opportunity is there or CIOs to help CEOs

close this gap, the survey suggests that CIOs still ace a challenge in bring-

ing proposed innovations to execution. CIOs themselves identiy a more

than 20 point gap between agreeing that members o their organizations

are actively involved in identiying how IT can enable business opportunities

or the company and saying that they have secured the resources required

or innovation investments. Less than two-thirds o CIOs have successullysecured resources or innovation by identiying technology-enabled busi-

ness opportunities, despite the act that their executive colleagues look to

them to deliver competitive advantage through technology. (See Figure 8.)

Seenassourcefortechnology

forcompetitiveadvantage

Secureresourcesfor

innovationbyidentifying

opportunities

Examinecontinuouslyhowto

useITresourcesforvalue

andgrowth

Workregularlywithclients

andexternallytodevelop

innovation

Involvemyteamactivelyin

identifyinghowITcanenable

businessopportunitiesfor

thecompany

Leadinitiativestosupport

exibilityandagilityfor

rapidchange

Ensureaproactiveprocess

forevaluatinginnovation

opportunities

0%

85%

85%

Actively involved in IT-enabled business opportunities

Leading initiatives to ensure flexibility to change

25% 50% 75% 100%

Figure 7: CIOs are leading initiatives and generating ideas to enable innovation




16/28

The CIO Proession:

Leaders o Change,


Page 1


This is potentially a signicant area or CIOs to make their mark on the

long-term success o their company. The CIO is the evangelist or the

innovation process, says the CIO o an inormation-services rm who is

in the oreront o her rms growth strategy. As such, she needs to walk

around and promote continuous discussions. The CIO is responsible or

helping make the company more fexible and or preparing the company or

the new business challenges.

Organization and Talent Management

Snapshot fnding: CIOs know where they need to lead their IT organiza-

tions, but they still nd it a challenge to delegate and to build their next-

generation teams.

Progress made: More than 92 percent o CIOs state that they know the

critical competencies required to make their IT organizations successul. It

is reasonable to expect that CIOs who demonstrate prociency in the Or-

ganization and Talent Management competency are quite likely to be able

to enhance their standing in the other three competencies because they

will be able to ree up time to ocus on them. In short, they will have devel-oped the leadership bench strength to be able to tackle bigger strategic

issues or the organization.

Members of my IT team are actively involved in identifying how

IT can enable business opportunities for the company.

My executive peers look to me to deliver technology

that creates competitive advantage for our company.

I have successfully secured resources for

innovation and investment by identifying technology

enabled business opportunities for my company.

60% 65% 70% 75% 80%

63%

80%

85%

85%

Figure 8: CIOs have the opportunity to take innovation through to execution

Ensuremyteamcommuni-

cateseffectivelywith

businesspeers

Planfordelegatingauthority

toallowforstrategicactivities

DevelopbusinessandIT

capabilitiesofmyteam

Knowthecriticalcompeten-

ciesformyteamssuccess

Linkbusinessandtechnology

objectivestoteams

performance

Developtrainingopportunities

andsuccessionplanfor

myteam

Establishplantoacquire

andgrowtalent

Organization andTalent Management



17/28

The CIO Proession:

Leaders o Change,


Page 1


The topics o organization and talent are clearly on CIOs minds: the recent

SIM study revealed that two o the top 10 priorities or IT are attractingnew IT proessionalsand retaining them. In practice, managing a leader-

ship pipeline requires strong leadership and management skills, whether

it involves developing new leaders in-house or hiring them externally. In

Organizing Genius: The Secrets o Creative Collaboration, co-author

and leadership expert Warren Bennis notes: The problems we ace today

come at us so ast and are so complex that we need groups o talented

people to tackle them, led by gited leaders, or even teams o leaders.

Opportunity Gap: CIOs indicate that they still tend to execute rather than

to plan and strategize. The study reveals a gap o almost 30 points be-

tween their agreement that they know the critical competencies and thatthey have a plan in place to acquire and grow the talent needed to achieve

business priorities. And just two-thirds say they have put in place training

opportunities or their leadership team and have identied a succession

plan. (See Figure 9.)

90% 100%

64%

77%

93%

Know critical competencies my team requires to be successful

Develop long term business and IT capabilities of my organization

Plan to acquire talent needed

80%70%60%

Figure 9: CIOs work to delegate and close the talent gap

This gap suggests that CIOs need help not only to delegate more eec-

tively, but to have the time to work on the talent pipeline within IT. Without

improving their ability to delegate and build their teams, it will be very di-

cult or many to disengage rom executing in order to be able to plan.

One CIO interviewed by the Center provides this perspective: At the

project team levels we have olks who move in and out o technology and

business areas. In and out, cross pollinating, i you will. I we dont have an

organization that can execute to the strategies and vision that we lay out,

we are going to ail. Thats what makes talent so important.


18/28

The CIO Proession:

Leaders o Change,


Page 1


Takeaways

CIOs have come ar in the past decade. There is widespread acknowledge-

ment o ITs value and uture potential among most senior executives, and

there are more and more situations where CIOs truly have a strong voice

as well as a seat at the executive table. But the latest research rom the

Center or CIO Leadership points to opportunities or CIOs to become even

more infuential in shaping their enterprises growth trajectories.

We observe that CIOs have strong sel-awarenessand the willingness,

eagerness and ability to explore urther. Moreover, their ranks are starting to

include proessionals rom business backgrounds. According to Forrester

Research, 35 percent o CIOs do not come rom the IT ranks. For those

CIOs, and or their teams, alignment with the business should be much

easier to achieve.

Our study also reveals that CIOs see themselves as leaders who are eec-

tive at building strong teams, who communicate well with their teams and

who know which IT competencies will lead to success. That is a strong

positive, because it implies that CIOs have the backing o their teams in

demonstrating ITs role as a driver o top line revenue and sustainable busi-

ness growth.

CIOs who grasp that point have a good perspective on how to shape theviews o top management. Essentially, they are not alone in ensuring the en-

terprise seeks to gain competitive advantage through technology: they can

develop the skills and competencies o their sta to promote and support

their vision. Says the CIO o one European fnancial-services frm: Whats

the value of a newly competent CIO if he doesnt have the talent behind

him? The CIO has to convert his team much as he converts himself.


19/28

The CIO Proession:

Leaders o Change,


Page 1


WhAT CIOs CAN DO ThEMsELVEs

There are steps that CIOs themselves can take to close competency gaps.

For many, there are opportunities to present their cases more in business

terms than in technical terms. That may be less comortable or CIOs who

have spent their whole careers within IT. But like any language, it can be

learnedand it will help in establishing trust and strong peer relationships

with the rest o the C-suite. Further to the point about communication: Fully

88 percent o CIOs who indicated that they communicate clearly may excel

at conveying concepts, updates and directions to their sta and even to

business colleagues. But they have an opportunity to address the other hal

o the communication equation: actively seeking inormation and listening

deeply. (See the insert The Art o Stakeholder Management on page 20.)

At the same time, CIOs may nd it helpul to put themselves in the place

o their business colleagues. One CIO oered the ollowing advice: Think

about the last time that IT mandated an enterprise-wide changeover o

desktops and laptops in order to augment data security. Its not too much

un or business users all they see is the bother o having to get used to

new personal productivity tools and maybe having to recongure their sys-

tems. And oten, all they get is a quick e-mail about the upcoming change-

overwith nothing to explain its importance in business terms.

CIOs can and should extend their perspective to viewing things through

the perspective o customers and other external stakeholders. The CIOo a large global communications equipment provider is regularly in direct

contact with customers. Now IT has direct touch with external customers.

We have real external revenue associated with those partnersI the order

process does not work in 24 hours, an immediate response is needed

because you can just orget the contract with the partner i it does not

work. A completely dierent language is used with customers than in

internal conversations.


20/28

The CIO Proession:

Leaders o Change,


Page 20


ThE ART Of sTAkEhOLDER MANAGEMENT

Major change initiatives oten do not ulll their potential because

change leaders do not engage key stakeholders early enough or

deeply enough. Too oten, research teams spend months gathering

data and developing strategies that are not ully implemented due to

insucient internal and external support.

Studies by Censeo Consulting Group, a rm that supports complex

strategic sourcing initiatives in the U.S. ederal government, where

single-category spending oten exceeds hundreds o millions o dol-

lars, are applicable to IT leaders and their eorts to shit perceptions

o ITs strategic value to the organization. Censeo maintains that thekey is to ollow a disciplined process or identiying, wooing and con-

tinuing to engage stakeholders.7

Censeo has identied these six principles or eective stakeholder

engagement that organizations rom any sectorpublic or private

should bear in mind when planning or managing a complex, large-

scale change management program.

Get to know your stakeholders

Engage them as early as possible

Listen with both ears open

Communicate, communicate and communicate some more

Use policy as carrot, not stick

Create communities


21/28

The CIO Proession:

Leaders o Change,


Page 21


hOW ThE CENTER fOR CIO LEADERshIp CAN hELp

The Center or CIO Leadership set out with this competency research to

help identiy the gaps that exist in the competency portolios o CIOs. The

next step is or the Centeralongside its academic and learning partners

to develop programs that will help close the competency gaps identied

in the study. The ollowing is a roadmap that the Center will carry out with

the goal o engaging CIOs rom across the globe to help advance the CIO

proession.

Continued Research and Community Engagement

Building on the base o knowledge gathered in this survey, the Center will

continue researching the theme o CIOs leadership competencies. Witheach round o research, new questions will surace, with additional oppor-

tunities emerging to identiy and close gaps. The Center will also provide a

hub or collaborationas a central community and an open, unbiased and

condential peer-to-peer networking environment that is not readily avail-

able to many CIOs around the world.

Learning and Education Roadmap

At the same time, the Center is developing learning roadmaps or CIOs as

well as specic tools to address competency gaps shared by many. One o

the specic areas o interest or potential education modules include CIOs

innovation capabilitiesa major opportunity or CIOs to become catalysts

or change and an area that meshes with what IBM, in its Enterprise o

the Future CEO study calls innovative beyond customer imagination.

Another specic area o interest that has clearly emerged is change man-

agement and the potential or CIOs to lead this critical unction or the

enterprise as a whole. (See Figure 10.)


22/28

The CIO Proession:

Leaders o Change,


Page 22


Leadership

Business

Strategy and

Process

Innovation

and Growth

Organization

and Talent

Management

Aligning business

colleagues to

clear IT vision

Developing a

process for innovation

Developing

business strategy

Talent plan to

acquire talent needed

Communicating in

a business language

Building the business

case and securing

resources for

innovation

Communicating with

external stakeholders

for opportunity

Refined research with academic and learning partners

Defined learning programs in each gap area

Events and activities for self-directed and collaborative learning

Developing business

value indicators for IT

Delegating to build

the next generation

CIO Competency Gaps

Plan to Help Close the Competency Gaps

Figure 10: The Center oers CIOs a plan or closing competency gaps

The Center will deliver education programs with its partners in a variety o

ormats including:

Academic partner-hosted classroom executive education

Online virtual classroom study

Community learning through events, orums, social networking

Peer mentoring

Executive coaching

The Centers website will provide a portal o rich resources tailored precisely

to the competency gaps that our research has revealed.


23/28

The CIO Proession:

Leaders o Change,


Page 2


A NOTE ON CLOsING ThE GAp

The competency gaps that the Center or CIO Leadership has uncovered

must be put in perspective. In aggregate, they represent an intriguing series

o opportunities or both career enrichment and enhancing the business

value o the IT unctionand or helping CIOs enterprises to grow aster

and more protably. All o the questions raised by those competency gaps

can be addressed. The questions may not be resolved overnightand

nobody is saying that the gaps can close inside the next nancial quarter.

But the solutions are evident, and are well within reach.

While there are many ways that CIOs can interpret the survey data de-

scribed in this report to help themselves, there is also much that is not

within their chartersor on their agendas. For the job o continued re-

search o these issues, o providing e-learning tools and virtual classroom

time, o developing the right mentoring and coaching programsorga-

nizations like the Center or CIO Leadership can provide an eective and

ecient resource.


24/28

The CIO Proession:

Leaders o Change,


Page 2


pURpOsE AND METhODOLOGY

The objective o our research initiative was to deeply understand the status

o the global CIO proession within our specic best-practice competen-

cies: leadership; business strategy and process; innovation and growth;

and organization and talent management. The outputs rom the research

will enable the Center or CIO Leadership to build solid oundations or its

education oerings and ongoing research.

The survey is broadly representative o CIOs as a group in all respectsby

geography, by industry and by company size. The majority o respondents

are rom Europe and North America, but the survey received global input

rom 45 countries in all, including Vietnam, Russia, Myanmar, India, Venezu-

ela, and many others. (See Figure 11.)

0% 10% 20% 30%

3%

5%

12%

39%

41%

Latin, Central and South America

Asia, Russia, India, Australia, New Zealand

United States, Canada, Mexico

Europe

Middle East and Africa

40%

Figure 11: Geographic composition o survey respondents

While manuacturing, public administration and nance (including insur-

ance) make up nearly hal o the industries represented, the survey also

includes replies rom 30 discrete sectors as diverse as construction and

health care. (See Figure 12.) More than 60 percent o the respondents are

with companies with 5,000 or more employees and with most generating

annual revenues o at least US$1 billion. Over 25 percent o CIOs compa-

nies report top-line numbers above US$10 billion a year. (See Figure 13.)


25/28

The CIO Proession:

Leaders o Change,


Page 2


0% 5% 10% 15% 20% 25% 30%

2.6%

2.3%

13.5%

8.6%

14.3%

17.7%

9.4%

25.9%

$1 billion-$1.9 billion



$10 billion or more

$500 million-$999.9 million

$100 million-$4999.9 million

$50 million-$90 millon

Less than $50 million

Figure 13: Size o company represented by survey respondents (in US $)

Figure 12: Industry composition o survey respondents

0% 5% 10% 15%

1.1%

9.8%

0.4%

1.1%

3.0%

3.8%

4.1%

6.0%

21.8%

6.8%

8.6%

6.4%

1.9%

16.9%

4.5%

3.8%Utilities

Construction

Manufacturing

Wholesale Trade

Retail Trade

Transportation and Warehousing

Information

Finance and Insurance

Professional, Scientific, and Technical Services

Educational Services

Healthcare and Social Assistance

Arts, Entertainment, and Recreation

Accommodation and Food Services

Other Services (except Public Administration)

Public Administration

Other

20%


26/28

The CIO Proession:

Leaders o Change,


Page 2


About 86 percent o those polled are the corporate CIO; about 40 percent

report directly to the chie executive ocer. A little under 20 percent super-vise between 101 and 500 employees, with some CIOs surveyed report

being in charge o sta numbering in the thousands.

The survey questionnaire was structured around the our core competency

categories, and included 33 specic tactics or activities within those our

competencies. Respondents were asked to rate their perormance by indi-

cating their level o agreement with the statements. The statements within

each competency were listed in random order to reduce question bias.

Launched as a condential online survey in July 2008, 1,592 CIOs world-

wide were invited to participate, with 266 responses (a 19 percent re-

sponse rate). Importantly, 35 o the respondents gave permission to reach

out to their CEOs to obtain supplementary inormation.

The survey instrument was developed in collaboration with Dr. Lynda

Applegate o Harvard Business School (HBS) and Dr. Soumitra Dutta o

INSEAD. Additional advisors included Dr. Marianne Broadbent (Edward

W Kelley & Partners), Dr. Joe Peppard (Cranelds Inormation Systems

Research Centre (ISRC), Michael Lindemann (Merck) and Dr. Zhong Wen

(Tsinghua Universitys Department o Management Science and Engineering

School o Economics). Some questions in the survey were sourced rom

The New CIO Leader Sel-Assessment in The New CIO Leader: Setting the

Agenda and Delivering Results, authored by Dr. Marianne Broadbent andEllen S. Kitzis.


27/28

The CIO Proession:

Leaders o Change,


Page 2


REsOURCEs

1Do CEOs Get Alignment? CIO Insight, Sept 9, 2008, http://www.cioin-

sight.com/c/a/Strategy/Do-CEOs-Get-Alignment/; Putting the CIOs Role

in Perspective, CIO Insight, April 3, 2008, http://www.cioinsight.com/c/a/

Leadership/CIO-Role-Perspective/; Closing the CEO-CIO Gap, Forrester

Research, Feb 7, 2007, http://www.orrester.com/Research/Document/

Excerpt/0,7211,41112,00.html; CIOs Uncensored: Taking the Measure,

InormationWeek, Dec 10, 2007, http://i.cmpnet.com/inormationweekre-

ports/doc/2007/166CIOeectiveness.pd

2The Enterprise o the Future, IBM Global CEO Study, IBM, 2008. http://

www.ibm.com/ibm/ideasromibm/us/ceo/20080505/index.shtml

3SIM Study: IT-Business Alignment Continues to be Top Concern or IT

Executives, SIM, Sept 2, 2008, http://www.simnet.org/LinkClick.aspx?leti

cket=61D8BUiXhRspercent3d&tabid=531&mid=994

4CIOs Get Mixed Reviews From Their Most Important Constituents, CIO

Insight, January 19, 2006, http://www.cioinsight.com/c/a/Research/CIOs-

Get-Mixed-Reviews-From-Their-Most-Important-Consituents/

5Do CEOs Get Alignment? CIO Insight, Sept 9, 2008, http://www.cioin-

sight.com/c/a/Strategy/Do-CEOs-Get-Alignment/

6CIOs Uncensored: Taking the Measure, InormationWeek, Dec10, 2007, http://i.cmpnet.com/inormationweekreports/doc/2007/

166CIOeectiveness.pd

7The 6 Principles o Stakeholder Management, Supply Chain Manage-

ment Review, October 2008, http://www.scmr.com/article/CA6601389.

html?q=Censeo


28/28

Copyright Center or CIO Leadership 2008

cioleadershipcenter.com

Produced in the United States o America

November 2008All Rights Reserved

IBM and the IBM logo are trademarks orregistered trademarks o International BusinessMachines Corporation in the United States, othercountries, or both.

Other company, product and service namesmay be trademarks or service marks o othercompanies.


Documents

Cio Leadership White Paper 2008