Taking the temperature of the CEO-CIO relationship

While they are not Felix Unger and Oscar Madison, a company’s CEO and CIO can at times make a fairly odd couple. Differing agendas create significant challenges from the outset. At the same time, we all understand it is critical for the CIO to engage the CEO and senior business leaders in discussions of IT investments. Considering those somewhat contradictory points, what exactly is the state of the union between business and IT leaders?

A few years ago, Diamond Management & Technology Consultants launched a broad annual study of various business leaders’ “Digital IQ.” Through the Diamond Digital IQ research, we seek insights into the challenges companies face associated with connecting the enterprise’s strategic objectives with the actual business value–which is often reached several years after the big ideas are hatched.

The 592 survey respondents this year comprise equal parts business leaders and IT leaders for purposes of balance. The survey covers an array of issues, ranging from attitudes about IT’s contribution to corporate competitiveness, to business/IT alignment, to IT management practices. The industries included in the survey are large or very large companies in banking, financial services, insurance, and consumer products, among others. Some of the most instructive responses in Digital IQ 2010 relate to the senior business executive support for IT.

Our CEO or senior-most business leader is an active champion in the use of information technology to improve our business.
The promise of a fully integrated organization in which there are no formal “business” and “IT” distinctions must begin at the top. IT’s capability must be viewed by all business leadership as both a driver of growth and a tool to improve efficiency. While 64 percent of respondents agree with this statement, I find it incredible that the figure is not in the 80 percent to 90 percent range. I was reminded by the CIO of an oil & gas company that “IT’s role is not always strategic, and that’s ok.” In this case, I would expect the CEO to still be an active champion of IT to improve the business operations and efficiency (and the CIO to work hard to develop a broader perspective of IT’s potential).

Our CIO is very involved in the business strategy development process.
Participants’ responses here provide further insight into how much senior management teams buy into the importance of IT. Only 54 percent of respondents agree with this statement, which make you wonder what the other 46 percent are doing. An insurance executive told me a story of a claims initiative that some colleagues in “the business” presented to him, and which was later approved. The initiative involved the use of images, video, and audio to better understand the claims and so that experts could do more of the reviews and QA remotely. Late in the project, one of the managers came back to him and admitted a big mistake that would cost them several million dollars. Apparently, they forgot to estimate any storage for all of the digital media.

Business executives are very confident in the company’s IT capabilities.
Half of our respondents think the business leaders have either neutral or negative attitudes in terms of IT’s capabilities. My colleagues, Peter Weill and Jeanne Ross at MIT’s Center for Information Systems Research, believe that service delivery is the basis for everything else. Before worrying about improving program management or executive dashboards, make sure that the basic IT services are in order. The CIO at a beverage company, for example, was having significant support issues with her peers in the business units. As a result, she set-up a “concierge” service specifically to deal with their needs and questions. This may seem extreme, but it reduced the noise and improved buy-in.

Our CIO is recognized as a BUSINESS leader, not just as a leader of IT.
Less than half the survey participants say the CIO is recognized as a business leader. This is mind-boggling–is the head of HR a business leader? Maybe he or she is just a “people leader,” not a business leader. This is Exhibit A for why the “business-IT” line of demarcation needs to be erased once and for all. I believe the way a CIO allocates time is directly related to “business'” perception of the CIO. On that note, I plan to dedicate an upcoming article to how CIOs spend their time.

The CIO lacks productive working relationships with the business leaders.
Forty-seven percent say they have neutral or negative perceptions of the CIO-business working relationship. This makes me wonder which among the following might be going through respondents’ heads as they answer this question: “This is a problem and I should do something about it.” “The problem is on the other side. When will the business (or IT) get its act together?” Is the onus solely on the CIO to develop a good working relationship? This reminds me of my mom saying “it takes two to tango” when I would get in a fight with my sister.

The value gained from IT in an organization depends on everyone’s ability to understand it and access it. The attitude and culture required to embrace IT starts at the top. With all the talk in Washington of politicians reaching across the aisle (or failing to do so), these initial Digital IQ results show us that “bipartisanship” between business and IT could still use a boost as well.

Chris Curran is Diamond Management & Technology Consultants’ Chief Technology Officer and managing partner of the firm’s technology practice. He writes the CIO Dashboard blog at www.ciodashboard.com, and can be reached at Chris.Curran@diamondconsultants.com or @cbcurran on Twitter.

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