“It’s time to re-think IT” – that was the takeaway line in Shell CIO Jan Boll’s presentation at the European CIO summit last week in Southern England. He outlined how Shell had been on a journey of getting costs under control, then investing, or extracting value. The IT department was better at budgeting, planning and delivering than ever before. Shell has dramatically improved their ability to manage complex supplier relationships. Yet the conversation with the business about value and the role of IT continues to be a difficult one. The CIO office is a tough place to be. It’s time to re-think IT was his takeaway.
Sound familiar to us in insurance?
Research by Harvard Business Review shows just how big the gap is of unmet expectations between CIO and CEO. Almost half of CEOs rate their CIOs negatively in terms of understanding the business and understanding how to apply IT in new ways to improve the business. Only a quarter of executives felt their CIO was performing above his or her peers.
Damning indeed, but there’s more at play in this complex relationship.
Few insurers derive competitive advantage from their IT estate and many see IT as a cost to be minimized. We find ourselves at this curious impasse with IT being asked to mitigate risk and costs of the current estate while simultaneously enabling innovative products and services through investment. Yet this investment adds complexity and cost back into the existing estates and so the never-ending battle about IT costs and it’s contribution to the business.
Let’s acknowledge that there are some unique aspects to the CIO office. It is the only cost center that is required to understand the business strategy, innovate for the business, all while tightly controlling the expenses of the existing IT estate. What other cost center is required to prove it offers value for money? What other cost centre is challenged with goals such as socially enabling the enterprise or create a digital business ecosystem all whilst keeping lights on at the lowest cost?
I believe few outside of IT recognize these antagonistic expectations (a great case for non-IT executives spending time in the CIO office in the corporate experience but that’s another blog).
This paradox results in a unusual blend of skills and competencies for the CIO office – a mix of strategy/big picture along with laser focus on operational detail. Sometimes these skills are found in one CIO and increasingly, these skills are found in more than one staff member within the CIO office. A few organizations already have these distinct roles in place. Many more require one person to have the complete skillset.
In my view, the pressures on IT require two different CIOs. The skillset required to mitigate risk is fundamentally different from that of strategist and innovator. In mid to large sized organizations, it is imperative to recognize these are different full-time roles.
So what does this mean for those on the CIO career path?
If you have your eyes set on the innovation/change CIO role, then you need to be adept at change – changing your own skills and your perspectives. You need to be comfortable with a considerable degree of uncertainty and lack of information. Essential skills include flexibility, business savvy, skilled communicator, focus and vision, an integrative mind (ability to see and connect the dots).
If you prefer the operations CIO role – or chief technical mechanic as coined by Gartner, then your skillset needs to include financial management, strong governance, and team leadership skills.
So the question becomes what type of CIO do you want to be? And what does it take to get there from where you are today?