On the heels of the announcement of their $25M B round raise today, Mendix hosted a webinar with Martha Heller, the author of “The CIO Paradox.”
Highlights from the event included:
Questioning why is it that most CIOs are hired to “create strategic advantage” and to “change IT from cost to value discussion” but ultimately fail (avg tenure 4 years) after finding they “inherited a mess?” Or that with IT nowadays making or breaking a company (e.g. Target security breach), why do CIOs have such limited visibility to the board, making their successes barely visible while their failures tend to be highly visible?
To answer these questions, Heller reviewed some of the CIO paradoxes from her book:
Accountability vs ownership – This is THE paradox to solve for. Solution is to focus on transparency, providing a vehicle to share accountability with the business, including assigning variable costs to business units to empower them to manage these shared projects (should NOT be IT projects).
- In this paradox, its important to understand that governance is different than shared accountability. Individual discussions, where an understanding of financials is required, should help get the business to “own” their project financials.
- Patience in understanding projects is key, since they are won or lost at their beginning.
- If the CIO can’t ensure that a true business sponsor exists, a true leader who can help ensure mutual success, then a project is not worth taking on.
Strategy vs operations – CIOs personally want to solve this more than any other paradox.
- Quandary due to shrinking budgets but increasing demand (e.g. mobile, social, data, etc.).
- Only way to address is to embed IT into the business, to move from order-taker to order-shaker. To accomplish this, important to restructure roles with the MOST important role being that of business relationship executive. When defining this role, the challenge is to how to define the optimal mix of strategy but operations responsibility of that role.
- While most business relationship roles are specific to business units, product lines, etc., Heller cited one current effort at moving from BU-specific to a horizontal-service focus. Jury is still out.
- Since the measurement of the business relationship executive function is less metrics-driven and more more strategy/relationships-driven, its important for companies to invest in developing these “blended executives.”
- Heller’s business of executive IT recruiting has led her to see that there is a shortage of these skill sets. Her advice is to grow your own, using a rotational program or other models (e.g. “buddy program”) to ensure bilingualism exists, both for the business relationship executive and for the business units themselves.
Cost vs Innovation – Innovation by definition includes some wasted budget, so work to ensure IT has discretionary spend.
- In addition, its important to understand that today’s CIO’s must be chameleons.
- IT has and will continue to evolve; from the accidental CIO in 70’s, to the PM-focused CIO’s of the first packaged applications, to the ERP CIO with a focus on business process management to today’s business model re-engineering CIO.
- The role of the CIO continues to evolve from technologist to biz person with a vision of customers, channels, markets, etc. While 20% of CIOs today meet with external customers, ALL should.
- For CIOs innovative-enough to evolve in this fashion (e.g today’s need being to define digital strategy), great. If not innovative enough, cede that role to others and evolve along operational excellence (e.g. Chief Process Services, etc.).
IT “and” the business – Alignment all about relationships, communications.
- Advised to reach out beyond IT. Much as a similar story about a CIO moving to COO previously appeared in this blog, Heller mentioned CIOs who offered their areas of expertise (e.g. vendor management, PMO, etc.) to business units and another CIO who took on the challenge of continuous improvement.
Futurist vs Archivist
- Heller compared IT to an iceberg, with the infrastructure being the un-visible portion of the iceberg while today’s “hot” initiatives (e.g. BI) are very visible but are only the tip of the iceberg.
- The CIO must be able to “Sell the Foundation;” make it sexy and figure out how to. Don’t be afraid to market IT to build greater awareness.
- Key to influence and educate, watch your language (not complex) but make sure its understood that the tip of the iceberg will suffer if the infrastructure has been under invested in.
- Brilliant technologists are in demand everywhere, not just IT, but sales, marketing, etc. Must make IT innovative to attract.
Finally, as part of the Q&A post webinar, Heller mentioned that IT should report into CEOs, not to CFOs’s, else they become a cost and not a innovation or growth enabler. The main exception to this is if a new CIO uncovers a “mess,” they may need to stay below the radar until they are able to get the mess straightened out.