CIOs who aren’t at the forefront of their companies’ digital strategies risk becoming obsolete — and they risk taking their IT departments with them.
The message isn’t new to IT executives, who have been counseled in recent years to take a leadership role in driving digital transformation. But new data suggests CIOs are struggling to make the shift. According to a recently published global CIO survey by Deloitte Consulting, 55% of business and technology leaders polled said CIOs are focused on delivering operational efficiency, reliability and cost-savings to their companies.
Kristi Lamar, managing director and U.S. CIO program leader at Deloitte and a co-author of the report, said IT executives who are serving in a traditional CIO capacity should take the finding as a clarion call to break out of that “trusted operator” role — and soon.
“If they don’t take a lead on digital, they’re ultimately going to be stuck in a trusted operator role, and IT is going to become a back office function versus really having a technology-enabled business,” she said. “The pace of change is fast and they need to get on board now.”
Taking on digital
“Manifesting legacy: Looking beyond the digital era” is the final installment of a three-part, multiyear CIO survey series on CIO legacy. The idea was to chronicle how CIOs and business leaders perceived the role and to explore how CIOs delivered value to their companies against the backdrop of digital transformation.
In the first installment, the authors developed three CIO pattern types. They are as follows:
- Business co-creators: CIOs drive business strategy and enable change within the company to execute on the strategy.
- Change instigators: CIOs lead digital transformation efforts for the enterprise.
- Trusted operators: CIOs operate in a traditional CIO role and focus on operational efficiency and resiliency, as well as cost-savings efforts.
Based on their findings, the authors decided that CIOs should expect to move between the three roles, depending on what their companies needed at a given point in time. But this year’s CIO survey of 1,437 technology and business leaders suggested that isn’t happening for the most part. “We have not seen a huge shift in the last four years of CIOs getting out of that trusted operator role,” Lamar said.
Kristi Lamarmanaging director, Deloitte
Indeed, 44% of the CIOs surveyed reported they don’t lead digital strategy development or lead the execution of that strategy.
The inability of CIOs to break out of the trusted operator role is a two-way street. Lamar said that companies still see CIOs as — and need CIOs to be — trusted operators. But while CIOs must continue to be responsible for ensuring a high level of operational excellence, they also need to help their companies move away from what’s quickly becoming an outdated business-led, technology-enabled mindset.
The more modern view is that every company is a technology company, which means CIOs need to delegate responsibility for trustworthy IT operations and — as the company’s top technology expert — take a lead role in driving business strategy.
“The reality is the CIO should be pushing that trusted operator role down to their deputies and below so that they can focus their time and energy on being far more strategic and be a partner with the business,” she said.
Take your seat at the table
To become a digital leader, a trusted operator needs to “take his or her seat at the table” and change the corporate perception of IT, according to Lamar. She suggested they build credibility and relationships with the executive team and position themselves as the technology evangelist for the company.
“CIOs need to be the smartest person in the room,” she said. “They need to be proactive to educate, inform and enable the business leaders in the organization to be technology savvy and tech fluent.”
Trusted operators can get started by seeing any conversation they have with business leaders about digital technology as an opportunity to begin reshaping their relationship.
If they’re asked by the executive team or the board about technology investments, trusted operators should find ways to plant seeds on the importance of using new technologies or explain ways in which technology can drive business results. This way, CIOs continue to support the business while bringing to the discussion “the art of the possible and not just being an order taker,” Lamar said.
Next, become a ‘digital vanguard’
Ultimately, CIOs want to help their organizations join what Deloitte calls the “digital vanguard,” or companies with a clear digital strategy and that view their IT function as a market leader in digital and emerging technologies.
Lamar said organizations she and her co-authors identified as “digital vanguards” — less than 10% of those surveyed — share a handful of traits. They have a visible digital strategy that cuts across the enterprise. In many cases, IT — be it a CIO or a deputy CIO — is leading the execution of the digital strategy.
CIOs who work for digital vanguard companies have found ways to shift a percentage of their IT budgets away from operational expenses to innovation. According to the survey, baseline organizations spend on average about 56% of their budgets on business operations and 18% on business innovation versus 47% and 26% respectively at digital vanguard organizations.
Digital vanguard CIOs also place an emphasis on talent by thinking about retention and how to retool employees who have valuable institutional knowledge for the company. And they seek out well-rounded hires, employees who can bring soft skills, such as emotional intelligence, to the table, Lamar said.
Talent is top of mind for most CIOs, but digital vanguards have figured out how to build environments for continuous learning and engagement to both attract and retain talent. Lamar called this one of the hardest gaps to close between organizations that are digital vanguards and those that aren’t. “The culture of these organizations tends to embrace and provide opportunities for their people to do new things, play with new tools or embrace new technologies,” she said.