Is this ‘rule of 10’ a good way to justify the role of a CIO?

There are times when a Canadian company will lose (or quietly dismiss) its CIO for some reason, and I wait to hear about the replacement. Sometimes, there is no replacement, and someone with a slightly different title seems to take on the IT leadership responsibilities. It sometimes makes you wonder whether certain organizations decide they can no longer afford — or really need — a CIO.

A recent article on Entrepreneur magazine looked at this situation from the other end of the spectrum. As part of its regular “Ask The Expert” column, the magazine turned to a cloud computing consultancy to answer the question, ‘When To Upgrade From IT Staff To CIO.’

This was actually broken down into a sort of FAQ list about what a CIO is, what such executives typically do and so on. But then comes the key issue: ‘Is there a particular point where a company outgrows its IT person?’

Most businesses go through IT pain points as they grow, usually each time revenue climbs by a factor of 10: from $100,000 to $1 million; from $1 million to $10 million; from $10 million to $100 million and so on. Each time a business goes through one of these stages without the input of a CIO, the more likely the next technology expansion will need to occur sooner than planned—or worse, the new system will fail to live up to its expectations.

The piece goes on to explain that this doesn’t necessarily mean companies that don’t crack the $1 million mark won’t ever need a CIO, particularly if they are technology-driven organizations (which is practically everyone). The underlying logic of this argument is worth thinking through, though.

While there is some merit in tying a CIO’s performance directly to company revenue — in other words, avoiding the risk of IT project failure or falling behind in terms of their technology needs — I don’t imagine many IT leaders seeing it this way.

“I’m here because we’re on our way to the $10 million mark — once we reach $100 million they’ll NEVER be able to get rid of me!”

In fact, the opposite has been true, largely because changes in technology like the cloud have made it more accessible to line of business executives (think CMOs and CFOs), and because more distinct technology needs have spawned new roles (like chief digital officers, or CDOs). Six-figure revenue streams will not provide job security for CIOs — not now, and likely not ever.

The focus on revenue also ignores the heart of the article’s advice, which is about the stewardship good CIOs provide. It’s a leader who not only mitigates disaster or ensures IT evolves at the right pace for the company, but someone who identities opportunities to grow a company from $10 million to $10 million through productivity improvements, better customer experiences and so on.

If small firms are wondering if there a particular point where a company outgrows its IT person, large companies are increasingly wondering if they have outgrown their CIO. It’s incumbent upon IT leaders everywhere to show they have the insight, the expertise and the passion to convince them the answer is no.

photo credit: Numbers And Finance via photopin (license)

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Jim Love, Chief Content Officer, IT World Canada

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