In the 1980s and for most of the '90s, their paths rarely crossed--the CEO didn't think much about technology, and the CIO rarely interacted with executives beyond his boss--the chief financial officer. With the exception of some techie leaders like Ned Johnson at Fidelity, Fred Smith at FedEx or David Glass at Wal-Mart, chief executives perceived IT/BT (I now, or BT) as an important underpinning of company operations, but not as a critical strategic tool.
Added to this general ambivalence were the high-profile cases of chief executives having their reputations and budgets scorched by IT/BT projects gone awry: perpetual IRS systems overhauls, Citibank's futile effort to create a "single customer view" in the mid-'80s, and SAP R/3 "kitchen sink" leaps of faith in the early-'90s come to mind.
Then the dot-com collective insanity hit and CEO panic set in (Amazoning, etc., etc.). In those days, I ran a tech session at the Harvard Business School for CEOs. To prepare for the session, I surveyed chief executives at 25 large companies. When I asked them how much time they spent on technology issues, the response was "25 percent." They were lying: CEOs--even the techies--could not afford to devote a quarter of their time to systems.
But they were certainly spending more time on tech than they had five years earlier--even Jack "I've never used e-mail" Welch, on his way out the door at General Electric, got religion and started to preach about the digitization of business. Michael Porter, every CEO's favorite academic, got into the act with a naive Harvard Business Review piece on the Internet in early 2001, just as the curtain came crashing down on The Web, Act 1.
Fast-forward to 2007. How's the odd couple today? Forrester just surveyed 75 global CEOs, and here's the punch line: Sixty percent of CEOs are satisfied with, but only 28 percent see IT/BT as a proactive leader in innovation. And only 30 percent see in process improvement.
Now, you can analyze this data simply and conclude that CIOs are in pretty good standing with CEOs, but they have not stepped up to the plate as innovation and process mavens. I interpret the results quite differently.
The fact that 60 percent of chief executives believe that CIOs are doing a satisfactory job is bad news, not good. Think comparatively: If only 60 percent of your top executives were satisfied with the performance of the CFO, that would signal meaningful distrust in the financial operations of your company. Chief executives' satisfaction in IT/BT has certainly risen through this decade, but 60 percent is still too low.
And the fact that CEOs are not looking to the CIO to be a proactive leader in innovation and process is not bad news. Rather, it is a frank assessment by the chief executive that the CIO should not be, indeed cannot be, the driving force in these two areas.
Why? In most companies, the CIO is too busy keeping the ship's engines running smoothly to come up onto the command deck and make suggestions to the captain on course changes. Leading business innovation and process change is not in the skill set of most CIOs--nor should it be.
Does the CIO have a role in process change? Absolutely. IT/BT typically supports and manages the process backbone--think enterprise resource planning--of most companies. When technology is injected into a company, the effort will fail unless it incorporates process change (the way you do work) and organizational change (the way you are organized to do work). I call this the critical triad--technology/process/organization--and the three must always be viewed collectively and as acting in concert. While , business executives (especially the CEO) must spend political capital to change process and organization. This is a collaborative effort, with the CIO working with the business people to get the right mix.How about innovation? Obviously the CIO is always working on systems innovation--that's part of keeping the engines running smoothly. But when it comes to business innovation, he is again not the proactive driver, but rather the steady partner with business executives who are chartered to lead business innovation.
Here's the key: For business executives to effectively drive process change and innovation, they must have a solid understanding of technology. They must be, to coin a term, technology-knowledgeable businesspeople (TKBPs) able to adeptly bring the potential of technology to bear on business change. The goal is to field vice presidents of marketing, executive VPs of strategy, and presidents of divisions who know how to apply technology to get the company to achieve its goals. The CIO must be in the business of educating and teaching the businesspeople so that they can make the leap. IQ (intelligence quotient) and EQ (emotional quotient), must be joined by TQ (technology quotient). And teaching TQ is the province of the chief information officer.
If that happens, chief executives' satisfaction with CIOs will head into the 70 percent and 80 percent range--where it belongs. And boards of directors will come to praise the chief information officer if that person can work to develop a TKCEO--a technology-knowledgeable CEO. And that's when the odd couple will see eye to eye--to the benefit of the organization and shareholders.