The six traits of digital-ready CIOs

SUITS THE C-SUITE By Warren R. Bituin

Business World (12/22/2014 – p.S1/5)

IN A WORLD fueled by rapid-fire innovation and technological evolution, progressive Chief Information Officers (CIO) are seeing more opportunities to make their mark and grow their careers. With digital technology changing the way companies do business, CIOs now have a greater chance to expand their role. How then can information technology (IT) executives step up and stand out?

Ernst & Young (EY) sought to answer this by looking at the traits of elite CIOs in IT-intensive industries. In a report titled “Born to be Digital”, EY surveyed CIOs who go beyond everyday operations and administrative work, and are instead engaged in boardroom-level business strategy. Out of over 180 CIOs in IT-intensive industries surveyed for this report across Europe, the Americas, Asia, the Middle East and Africa, nearly four in 10 responded as being “highly engaged in core strategic issues.” By studying this elite group of “digital-ready CIOs,” the report was able to identify six distinctive features for career success.

One of the most common traits of digital-ready CIOs is that they have a clear vision of how technology will transform the business. They understand how innovations can have an impact on product development, marketing, and new revenue streams. Roughly nine out of 10 digital-ready CIOs concentrate on persuading management of IT’s role in transforming the business. In contrast, only 72% of typical CIOs are likely to possess this trait. This only implies that digital-ready CIOs are those who, to begin with, understand a company’s underlying business model, and are thus able to strategize how new technologies can accelerate growth.

One example of how this trait is manifested is when CIOs recognize opportunities from the huge amount of data generated by increasingly automated sales and marketing and operations. Another is when the technology team is able to envision target processes instead of merely implementing what is already provided.

However, the report emphasizes that, to make the most out of this trait, CIOs must be multi-skilled to realize their strategic visions for the company. The survey found that digital-ready CIOs place more importance on their understanding of the market and financial know-how than typical CIOs do.

The second trait is the relentless drive to innovate. The report states that 81% of digital-ready CIOs strongly agree that innovation in the business model and product/service is necessary.

Typical CIOs will focus primarily on business performance and IT budgets, but digital-ready CIOs also concentrate on figuring out how to unlock new markets. This can be accomplished through exploring IT-supported research or product development. They are also keen to understand the ways the rest of the business is changing so that they can design IT support that can keep up with the pace of transformation.

Third, digital-ready CIOs are seen to place importance on driving growth and nurturing relationships. They make sure to consider the front-end of the business to see how technology can improve the way their company sells its products and services. This is in contrast to typical CIOs who focus on back-end operations and rarely face or engage with customers.

This is exemplified, for instance, when CIOs think about improving data mining and analysis to reap more customer insights to help increase sales.

A key factor to successfully exercising this trait is to recognize the importance of external clients. Often, typical CIOs will be concerned only about satisfying their internal clients — that is, the company’s executives. However, digital-ready CIOs also place importance on understanding the needs and motivations of the actual paying clients that avail of the company’s wares.

The fourth trait is the ability to communicate a vision and be understood. Elite CIOs are those that are able to explain to people how technology can indeed transform the business, or as the report puts it, “CIOs need to be master storytellers.”

Communication is a critical part of this trait. This can be put into action when CIOs articulate new and often complex technology changes to the rest of management and also to clients in a business conversation. They need to be able to clearly and compellingly explain how the technology will benefit stakeholders.

The report further notes that, in instances when the CIO doesn’t hold a board-level position, using relationships to facilitate communication becomes even more vital in order to garner the support and influence of the C-level executives.

Fifth is the ability of moving beyond operations and infrastructure. For many CIOs, their time and energy are consumed by the operations and infrastructure elements of their job. This can adversely impact the CIO’s ability to consider strategy and innovation. In essence, they risk becoming purely “infrastructure officers.” The report suggests that while digital-ready CIOs should always keep operational elements in mind, they should run these as smoothly as possible by training and trusting their teams to handle back-office tasks. This frees them up to focus on business strategy and transformation.

Finally, CIOs seeking to be digital-ready must also remember to take calculated risks and be brave enough to try out emerging technologies. Innovation ultimately needs a willingness to risk failure, the report states. Experimentation is often necessary.

This is a significant change for traditional IT leaders who are risk averse — generally, they are unwilling to take actions that are unproven. One obvious area where this comes into play is in terms of budgets and costs. Conventional CIOs who face pressure to cut costs may simply look for ways to reduce spending, while digital-ready CIOs will cut costs then take the risk of convincing management to use those savings to advance innovation in other areas.

By exemplifying these six traits, digital-ready CIOs are able to make a vital contribution in growing their businesses. In turn, they are likely to enjoy career success. Seven in 10 CIOs in this top group strongly agree that their standing in their respective companies have significantly improved over the past three years, well above the 54% response rate from typical CIOs.

On the local front, there is still much room for Philippine CIOs to grow, given that digital adoption in the country is still low, even for many companies that are IT-intensive. The traditional IT mind-set is still mostly focused on operations and infrastructure rather than strategic directions. Even for companies who have taken the digital leap, there are still many operational issues that can be addressed by forward-looking CIOs who demonstrate the above-mentioned traits.

Warren R. Bituin is a Partner of SGV & Co.