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Digital Transformations Can Transform the CIO’s Role, Too

Posted by on October 12, 2020

While it may be axiomatic that the chief information officer is the executive most frequently responsible for leading a digital transformation effort, a recent study shows that digital transformation can also set the CIO up for partnership with the CEO—underscoring the increasingly strategic role the CIO plays and placing the CIO more firmly into a key leadership position. 

In a recent Lawless Research survey of IT and non-IT managers and executives commissioned by Cherwell Software, more than half of survey respondents said their digital transformation efforts were captained by CIOs—more than three times higher than the 16 percent led by the next-most-likely leaders, chief executives and chief transformation officers.

The CIO’s leadership role is about the same whether the company has just started its digital transformation journey or is far along the road. But in digitally mature companies, according to Lawless data, the CEO leads the process 33 percent of the time—more than twice as often as in less mature companies (13 percent). Given that the gain in CEO leadership does not take away from the CIO’s leadership, it appears likely that the leadership is shared, established as a partnership between the two.

What does this mean for the CIO’s role? It’s clear that the CIO benefits significantly regardless of who is leading the transformation, particularly after the company has achieved digital maturity. But the growing strategic importance of the CIO’s work, and the likelihood of a clearer partnership between the CIO and the CEO adds exponentially to that benefit. Here’s how that has evolved.

Evolution of Expertise

Historically, CIOs have focused on leading their companies’ technology initiatives and implementation. This began to change in recent years, though, as their tech responsibilities became more integrated with operations and the business side. So when the time comes for companies to undertake a digital transformation, CIOs can bring a critical tool to their leadership toolkit: a strong grasp of overall strategy and how the company works.

This evolution of expertise, in turn, fits well with what companies increasingly want from their CIOs. As CIO.com’s State of the CIO 2020 report puts it, “As the top IT leadership position continues to shift away from a pure technology focus to more of a business strategist and transformational role, CIO competencies and characteristics are beginning to align with what’s expected from mainstream executive management: deep industry knowledge, robust communication and management skills, and an intrinsic understanding of how to run a profitable business.”

Interestingly, CIOs’ growing skill set means that their technology proficiency—i.e., what got them the CIO job in the first place—has become mere table stakes for the role.

Transformation Is the Catalyst…

Leadership of a successful digital transformation has become a seal of approval for CIOs. In an early-2020 Deloitte survey of corporate tech leaders and CEOs, an overwhelming majority of CEOs (84 percent) said that experience in change and transformation was the most important qualification they sought in a CIO.

Correspondingly, transformation leadership has moved CIOs into a higher realm of respect and responsibility. Once the transformation process reaches maturity, they’re viewed throughout their companies (and, most importantly, by their CEOs) no longer as one of many tactical role players, but instead as major players and strategic thinkers. They’ve earned the status of trusted CEO partner—and the seat at the table that goes with it.

Another finding by Deloitte underscores CIOs’ executive metamorphosis: 40 percent of CEOs see their CIO as the key driver of their companies’ business strategy over the next three-to-five years. To put this into perspective, the most frequently cited non-CIO individual was the chief financial officer, named by just 11 percent of CEOs.

…and Maturity the Inflection Point

If leading digital transformation is the catalyst that drives a greater appreciation of what the CIO can do, then the achievement of transformation maturity is the inflection point at which such appreciation officially translates into a place near the top of the executive heap.

Transformation maturity changes the CIO role in several key ways:

CEO partnership. The strong bonds that CIOs build with their CEO in the transformation process concretize the relationship into a partnership: The two executives work much more closely on an ongoing basis. CEOs, for example, often delegate authority to their CIO to work with other business unit heads in situations where the CEO previously did so directly.

Improved strategic decisions. The old saying that “Two heads are better than one” applies to CIOs. Having been recognized as strategic thinkers, they team up with their CEO to make better, more informed strategic decisions for the company.

Faster adjustments. The success of the company’s digital transformation—as demonstrated by its attainment of maturity—means that the biggest challenges have been met and the company can adjust more quickly and nimbly as conditions change. As transformation leaders, CIOs are best positioned to know their company’s digital capabilities and use them to make such incremental adjustments.

Data mobilization. Prior to undergoing digital transformation, companies have huge amounts of data that tend to be scattered, redundant, inconsistently formatted, and difficult to access. The transformation process brings data together, cleans it up into a standardized format, enables widespread access and, overall, raises its quality. The CIO—as the transformation architect and company data steward—can leverage the data for use in organization-level strategic decisions and unit-specific activities, notably for data-hungry areas such as finance, sales, and marketing.

Read more findings from the Lawless Research survey of managers and executives both inside and outside corporate IT departments in our eBook, The Virtuous Circle of Digital Transformation. Or, take a quick look at the stats and findings in this infographic