High Tech CEOs Ponder the Strategic CIO

Guest blog by Peter High, President of Metis Strategy, LLC. High's brand new book is Implementing World Class IT Strategy: How IT Can Drive Organizational Innovation.

To be truly strategic, CIOs need to think about how value is created. Many are good at cost cutting, but this is almost by definition a backward looking exercise—optimizing something that is already in place. This is not strategic. CIOs need to think about what future possibilities there are to leverage technology for new value and top-line growth. This is what differentiates the strategic CIO.

Some of the best insights into the ever-changing role of the CIO come from people who lead companies that serve the CIO. Here are two:

The Need to Get Intimate

As president and CEO of Red Hat, the $1.5 billion global provider of community-powered open source software solutions, Jim Whitehurst has a reason to speak with CIOs on a regular basis, and has seen the evolution of the role as IT has become more core to a wider array of businesses. He says,

“Most of the major business trends today have meaningful IT components to them, no matter the industry. As a result, IT needs to be much more woven into the planning process of the rest of the organization, or it will be left behind. In the past, it was appropriate for IT to pursue version 1.0 of a project, and then six months later to pursue version 2.0. Now that information is becoming more strategic, and IT is involved in so much more, the pace of change is that much greater. When business is moving faster than the pace of the IT department’s release cycles, IT needs to change. It requires that IT become much more agile, collaborative, and that it embrace service-oriented architecture.”

This requires that the CIO and his or her team achieve a level of intimacy with the rest of the organization far beyond what has been typical. IT leaders need to be involved in the strategy-setting meetings so that they hear when strategic priorities are changing. They need to have more business savvy to anticipate how changes in the competitive landscape or the marketplace could affect the strategic plans and therefore the IT priorities of the company.

Formal strategic planning is critical, but plans will change, and IT must be able to change its own plans quickly and assist the broader company to do so, on the basis of changes in reality. A plan is necessary but needs to be flexible.

Value: The Ticket to Ride

As the CEO of NetApp, a business-to-business enterprise, Tom Georgens has seen a growing number of CIOs who have come to realize that the path toward increased relevance and inclusion of the CIO is for that person to demonstrate value on a par with other C-level executives. He says, “CIOs who wish to gain access to the CEO’s strategy-setting sessions and remain as a full-fledged member of that forum need to demonstrate how IT will create competitive advantage on a par with others who are at the table.”

Fortunately, the means of doing so are better today than ever before. Georgens says, “Enabling the company to make better decisions and serve customers better is a competitive advantage CIOs can deliver.”

The invitation for a CIO to attend strategy-setting meetings with the rest of the executives of the company is not guaranteed; a first-time invitation does not mean that future invitations will come. The CIO must strive to communicate the enhanced value delivered through IT again and again, and engage the rest of IT leadership in so doing as well.

Georgens acknowledges that when he says, “Many CIOs take on their role with a mandate to cut costs. CIOs tend to be quite good at that. If they are not careful, however, they will be associated only with that single lever of value.” CIOs must push to be recognized as top-line contributors. The only way to do so effectively is to be more cognizant of how the company creates value, by garnering insights directly from customers (current and potential) whenever possible and devising solutions that will help the organization get to value more quickly. It begins with the CIO weaving him- or herself and the rest of the IT leadership team into the strategy of the company to a greater extent.