CIOs leverage information and technology to create competitive advantage by applying a four-phase transformation process, according to Phil Weinzimer, President of Strategere Consulting. First, they work with business peers to deliver IT services exceptionally well. Second, they improve the business skills of IT personnel so they can effectively collaborate as part of business teams. Third, IT/Business teams focus on initiatives that drive margin. Fourth, strategic IT organizations leverage information and technology strategically to change the business model of how business decisions are made and/or how the company interacts with its customers.
Weinzimer, author of The Strategic CIO: Changing the Dynamics of the Business Enterprise, interviewed 157 CIOs, IT leaders, business executives, and academics as part of his research to identify a common process methodology CIOs implement to transform their organization into a strategic asset for their company. Weinzimer found that strategic IT organizations provide business value by delivering IT services efficiently. Weinzimer developed an assessment tool, based upon best practices identified by CIOs, that can be used to measure the strategic maturity of an IT organization.
Weinzimer concluded that CIOs are also increasingly involved in helping to drive business transformation through the deployment of digital technologies. But even in their efforts to act more strategically, CIOs often struggle to move beyond their tactical grounding.
But that’s starting to change. Weinzimer pointed to the CIO turnover in a number of enterprise companies in 2016 such as Facebook, The Coca-Cola Company, and Payless ShoeSource - not because the incumbent CIOs in those companies weren’t competent, but to help each organization to address strategic requirements.
For instance, as Facebook has transitioned to become more of a media company over time, the company recruited NBCUniversal CIO Atish Banerjea to become its CIO after Tim Campos stepped down, noted Weinzimer.
Another critical shift that strategy-minded CIOs have recognized in recent years is that they can’t drive strategy by themselves. “They have to forge essential relationships with key stakeholders in the organization for tactical and strategic planning,” said Weinzimer.
Weinzimer pointed to Steve O’Connor, CIO at CSAA Insurance Group (a AAA Insurer) as a model for effective collaboration with the business. “When O’Connor joined CSAA Insurance Group in 2011, he followed a process that said ‘I need to understand the business first and I’m going to spend the first four months collaborating and understanding how the business runs’,” said Weinzimer.
O’Connor met with organizational leaders throughout the organization and asked each of them what their role is and how they carry out their jobs. He also asked people how they use IT to support their business processes.
“From the insights he gathered, O’Connor then he took his proposals to the board,” said Weinzimer. “Every CIO who is innovative and/or strategic can only accomplish that by building working relationships with the business.” Weinzimer said other CIOs he interviewed followed a process that was similar to O’Connor’s.
Competencies for Strategic Leadership
In his extensive research for the book, Weinzimer discovered that there are four essential business competencies that CIOs must have to lead strategically. First, they need to be able to identify opportunities where business value can be created. Second, CIOs need to develop a rich understanding of the competitive landscape in their respective industries along with those areas where their companies create value that differentiate it from their rivals.
CIOs also require some level of technology prowess but it’s not about having technical expertise, said Weinzimer. “It’s about understanding how technology can be used strategically and the ability to keep up with emerging technologies in the marketplace,” he said.
In addition, CIOs need to seed their IT personnel with cross-competency skills that cut across different parts of the business.
Weinzimer also developed an assessment tool to measure the the strategic maturity of these competencies across two dimensions. The first is knowledge (book smart) and the second is applying the knowledge in business meetings (street smart).
Weinzimer pointed to Harry Lukens, SVP and CIO at Lehigh Valley Hospital. To help each person in the IT organization develop a thorough understanding of the hospital’s charter, Lukens takes each person through every part of the hospital – the waiting room, the X-ray room, the emergency room, the labs, etc. – to help acquaint each IT staffer with the function of each part of the facility.
Another challenge CIOs are facing in executing on strategic leadership is that while business demand for IT projects continue to grow, IT budgets themselves remain flat.
To help improve throughput for projects for the State of Georgia, CIO Calvin Rhodes is overseeing an initiative to promote collaboration between agency stakeholders and IT project teams so that stakeholders aren’t merely submitting project requirements. Weinzimer said the approach includes the use of a project management tool that captures stakeholder input and identifiers for project success. The tool also applies analytics to predict potential risk areas to mitigate. The collaborative, cross-disciplinary approach has saved the state millions of dollars, explained Weinzimer.
Common characteristics of strategic CIOs
Although CIOs each have different leadership styles, Weinzimer discovered through his research that there are at least five common characteristics that successful CIOs share that enable them to deliver value to the business.
First, thriving CIOs are relevant to the business in achieving business outcomes. Second, they don’t just walk the walk and talk the talk – they deliver on the expectations of business leaders. Third, they’re able to embrace change in today’s dynamic marketplace. Fourth, they’re adept at upskilling personnel and getting them immersed in business planning. Finally, savvy CIOs approach business challenges creatively and challenge their IT staff to do the same.
“One of the CIO’s I interviewed, Filippo Passerini (formerly with Procter & Gamble) offered the following advice: ‘Be a business person first and a technologist second.’ That goes a long way towards building business relationships,” said Weinzimer.
Weinzimer can be contacted at firstname.lastname@example.org for more information on the transformation methodology and IT Strategic Maturity as well as the IT competency and skill assessment.