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Six attributes of IT leaders in 2016

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The role of IT leaders is experiencing a dramatic shift, moving away from just managing technology and toward developing business strategy. IT leaders now require expertise in both in business and technical areas, making the position CIO comparable in status to those of other C-level executives such as CEO, CFO, and COO. The number of organizations with a CIO has increased dramatically in response to the increase in the importance of information management, making the CIO the most recent addition to senior management for many organizations. This article discusses the attributes of top CIOs. Top CIOs consistently have the following traits: leadership skills, management skills, business experience, technical knowledge, outsourcing approach, personal traits.

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Six attributes of IT leaders in 2016

  1. 1. Drive Your Business Six Attributes of IT Leaders in 2016
  2. 2. 2 ©2016 WGroup. ThinkWGroup.com Introduction The role of IT leaders is experiencing a dramatic shift, moving away from just managing technology and toward developing business strategy. IT leaders now require expertise in both in business and technical areas, making the position of chief information officer (CIO) comparable in status to those of other C-level executives such as chief executive officer (CEO), chief financial officer (CFO), and chief operating officer (COO). The number of organizations with a CIO has increased dramatically in response to the increase in the importance of information management, making the CIO the most recent addition to senior management for many organizations. The role of the CIO in many organizations has shifted rapidly from the relatively narrow focus of managing data processing to the broader job of managing knowledge. Knowledge management has now become so important to a business’s success that it’s often the most pressing challenge for that organization. For CIOs, dynamic leadership is the key to success. Many organizations face new challenges due to particularly significant market and organizational shifts. These changes include decreases in operational scale due to downsizing and increases due to mergers and acquisitions. The responses to these shifts have generally included a greater investment in reengineering operations. The current global estimate on reengineering spending is least $52 billion annually, with about $40 billion of that total going towards IT. The CIO is therefore at the center of some of the most costly and volatile changes for many organizations. Furthermore, businesses can no longer afford to ignore the strategic role of technology, which is reflected in the growing technical expertise of senior managers. The IT consultancy Cutter Consortium recently conducted a survey on the role of CIOs in major organizations. That survey showed that 69 percent of CIOs are members of the senior management team, while 70 percent of CIOs report directly to the CEO. The growing expense of technology alone is sufficient to get a CEO’s attention, making it critical for CEOs to monitor IT investments.
  3. 3. 3 ©2016 WGroup. ThinkWGroup.com The CIO’s role has changed from purely technical to include strategic planning and organizational management. This shift to a broader strategic role has been accompanied by an expansion of IT functions to include all knowledge management, a trend that’s commonly a core component for an organization’s strategic planning. The ideal CIO must therefore have expertise in finance and marketing, in addition to the usual technical expertise. Additional changes in the CIO’s role include an increased involvement with both internal and external customer support, including IT sourcing. The traditional role of the CIO in customer support has been limited to internal support functions, such as networking, but it’s now expanding to include the support of external technology. This shift corresponds with the CIO’s increasing role as an overall knowledge manager. This white paper will discuss the attributes of top CIOs by grouping them into the following categories: • Leadership skills • Management skills • Business experience • Technical knowledge • Outsourcing approach • Personal traits
  4. 4. 4 ©2016 WGroup. ThinkWGroup.com Leadership Skills1 Leadership skills are the single most important attributes for a CIO. They’re always required qualities for this position and are usually the most desirable requirements. Leadership is a highly subjective quality, although it’s easily discerned. This quality provides an effective means of distinguishing great CIOs and other managers from those who are merely good. Great leaders have a strong vision of what they wish to accomplish, the ability to inspire others, and passion for their work. They’re also confident in their abilities and willing to take calculated risks. Leaders should set clear goals for their subordinates, in addition to providing them with encouragement, support, and reassurance. Great leaders are highly effective at coaxing the best efforts from the people around them. They serve as role models due to their high principles, sense of honor, and fair play. Business Business leaders must have a fundamental understanding of business in general as well as their specific industry. A shortcoming in this area is quickly visible to a CIO’s peers and superiors and is a common cause of frustration for senior management. CIOs must make an active effort to develop a thorough knowledge of their particular industry, including its value proposition, operating model, competition, market position and overall business strategy. Those who fail to make this effort or simply lack the capacity to achieve this level of understanding are doomed to failure since the contribution they can make to their organization will be limited. CIOs must also have a foundation in general business principles, including accounting, finance, marketing, sales, distribution channels and supply chains. Today’s CIOs must be highly knowledgeable in these principles from both traditional and online perspectives to meet the typical expectations of senior management. These requirements are the reason that virtually all organizations require a CIO to hold an MBA.
  5. 5. 5 ©2016 WGroup. ThinkWGroup.com Relationships CIOs must form effective business relationships with personnel who are internal and external to the organization. Internal associates primarily include other C-level officers and business leaders, while the external individuals with whom CIOs must form relationships include customers, partners, and suppliers. Building these relationships requires highly effective interpersonal communication skills to establish the necessary rapport and trust with other people. Senior C-level executives can readily discern when a newly appointed CIO has poor business relationships, a shortcoming that’s a common cause of failure for people in this position.
  6. 6. 6 ©2016 WGroup. ThinkWGroup.com Management skills2 CIOs must be able to manage their own staff in addition to external business partners. Great managers are effective team builders, so they must also be coaches, mentors, and motivators. Additional characteristics of top CIOs include the ability to assign resources, set priorities, and deliver projects on time and on budget. Managing change The ability to manage change is a common requirement for CIOs. Many organizations that are searching for CIOs want to fill a newly created position, rather than replacing a CIO who is moving on. These organizations typically have never had a CIO at all or are elevating a legacy position to a true CIO role. In either case, a new CIO can expect a highly dynamic working environment. For many CIOs, the highest priority regarding change management is the expansion of the IT department’s role from a purely operational requirement to a strategic element. The general expectation of this change is a dramatic improvement in IT’s ability to execute business strategies. CEOs value CIOs who can improve the competitiveness and efficiency of processes, including continuous process improvement (CPI) and business process reengineering (BPR). These attributes are particularly valuable in a tight economy. Communication skills Effective communication is a vital management skill due to a CIO’s frequent need to clearly communicate a new strategy and other ideas. This includes both verbal and written communication, whether it’s with an individual or group. Communication skills also include the ability to listen, persuade, and negotiate. For many CIOs, the highest priority regarding change is the expansion of IT from a purely operational – to a more strategic – element. 
  7. 7. 7 ©2016 WGroup. ThinkWGroup.com Business experience3 Organizations routinely want a CIO with significant experience in a particular industry, especially finance, health, insurance, or retail. They may be willing to expand their search by considering CIO candidates with experience in other industries with similar business models. Some organizations may even prefer candidates in unrelated industries based on their ability to provide new ways of thinking about their industry. Hiring ability Organizations frequently overlook the value a CIO can make in sound hiring decisions. This ability allows the CIO to attract, groom, and retain excellent employees who can make valuable contributions to the organization. Candidates who can demonstrate their prowess in this area can often distinguish themselves from other candidates. International experience International experience has recently become a significant attribute for CIOs, since organizations throughout the world are now actively seeking customers from other countries. Furthermore, international acquisitions are becoming a common method of increasing a corporation’s global presence. A top CIO should therefore possess at least a basic understanding of foreign cultures, particularly with respect to their ways of doing business. In most cases, a CIO’s international experience need only provide a general awareness and openness toward other cultures. This experience should provide the CIO with the ability to effectively interact with customers, employees, and partners in other parts of the world. However, some organizations require specific knowledge of a foreign culture, such as its market or language.
  8. 8. 8 ©2016 WGroup. ThinkWGroup.com Technical knowledge4 CIOs must have a high general intelligence, which often manifests itself as an early interest in technology. Many of today’s CIOs became hooked on computer hardware when it first became commercially available. This interest in technology typically includes early personal experience with commercial software, the World Wide Web, and gaming. Most CIOs have a greater potential for understanding new technology than general managers. Surveys show that CIOs tend to be motivated more strongly by new job challenges than financial compensation. Business management The popular perception of CIOs is that they are narrow technologists. However, even the most technically oriented CIOs must still possess the necessary business qualifications to be successful. Successful CIOs typically have a thorough general training in IT and usually think about technology in broad terms. They’re also drawn to the challenge of understanding the intricacies of new technologies and are quick to learn the methods of managing it. The best CIOs view technology as a means of gathering, storing, and analyzing information. This mindset often allows CIOs to identify patterns that are overlooked by other executives who are more focused on customers or finances.
  9. 9. 9 ©2016 WGroup. ThinkWGroup.com The routine use of digital technology is revolutionizing virtually all business activities, but successful CIOs are able to use it effectively without becoming bogged down in the details.  Balancing technology CIOs should have a view of technology that balances its capabilities with its risks. They also must understand the need for conservatism when describing the benefits and delivery schedule of new IT resources, since many organizations have already experienced overly aggressive promises regarding IT. Designing IT to provide strategic benefits is an intriguing challenge for successful CIOs. This challenge includes the process of working with senior management to make the organizational changes necessary to allow people access to that technology. CIOs are adept at identifying the unique technological idiosyncrasies of an organization and the personnel who are best able to handle them. IT architecture The best CIOs view technology from an architectural perspective, meaning that they see technology as a means of implementing a strategy, rather than an end unto itself. This view is especially important in today’s business environment, where the basis of IT design has changed from mainframes to networks in just a few decades. The routine use of digital technology is revolutionizing virtually all business activities, but successful CIOs are able to use it effectively without becoming bogged down in the details. The ability to focus on architecture is essential for obtaining information that has value to an organization. A CIO creates high-level designs to define the relationships between key pieces of technology by using the concepts of form and function. The next step is to generate the detailed plans needed to implement the design. Finally, the CIO can produce a low-level list of the IT resources that the design requires.
  10. 10. 10 ©2016 WGroup. ThinkWGroup.com Legacy systems Legacy systems often present a major challenge for a new CIO. Most organizations hiring their first CIO have developed major emotional and financial investments in their legacy systems over a long period of time. This situation inevitably results in a deep integration between the systems and the organization’s operations. However, legacy systems ultimately place limits on an organization’s capabilities and will eventually prevent that organization from supporting new strategies. Unfortunately, the likelihood of replacing a legacy system is generally poor, due to the large number of organizational changes that it typically requires. Assume for example that an organization has a legacy system that only supports batch processing. This organization will probably be reluctant to study the viability of using wireless technology, which could cause it to miss a major opportunity for improving its business strategy. Some CIOs hesitate to replace legacy IT infrastructure, but a successful CIO forces this decision, manages it, and moves on. For example, the problem of legacy systems was one of the first items of business for Peter Solvik when he became the CIO of Cisco Systems in 1992. He and the senior management team completely replaced that organization’s legacy systems within nine months. B to B magazine named Solvik as one of its Top 25 E-Champions in 2000, and Network World named him one of the 25 most powerful people in networking that same year. Leveraging technology A CIO with expertise in leveraging technology, often a stated requirement in CIO searches, provides a significant advantage for an organization. Specific areas of technology that are particularly beneficial include customer relationship management (CRM), enterprise resource planning (ERP), data warehousing, e-commerce, sales force automation, and Web infrastructure. Experience in applications such as SAP or an operating system like UNIX may still be preferred skills, but are less likely to be actual requirements.
  11. 11. 11 ©2016 WGroup. ThinkWGroup.com The concept of a single system – owned by a single organization – is becoming obsolete.  Outsourcing approach5 The Internet is revolutionizing the approach to outsourcing the IT infrastructure for virtually all organizations. This trend is changing infrastructure from a relatively small number of computers that are directly owned and operated by that organization to a very large number of interconnected computers shared by many different organizations. The concept of a single system owned by a single organization is becoming obsolete as computing platforms progress towards an open- standards environment in which new features continually become available through the Internet. This trend has also resulted in a progression from isolated departments to enterprise systems that connect with many entities outside that organization. Multiple sourcing CIOs can no longer afford to consider a single IT outsourcing vendor that will provide a computing platform along with every possible feature that the organization will ever require. Successful CIOs must continually monitor new trends in IT for those with the potential to benefit their organization. For example, CIOs often examine the ability of wireless devices to replace desktop PCs as the primary method of accessing the Internet. Top CIOs enjoy the challenge of managing an IT environment of increasing complexity, although they make a clear distinction between leading-edge and bleeding-edge technology. Extended enterprises The best CIOs see their organizations as networks that exploit resources, especially information. These networks should therefore serve as a conduit for information that creates business value. Modern organizations should have soft boundaries, as opposed to the rigid hierarchy that was commonly used in the past. An organizational network is increasingly likely to include customers and suppliers, resulting in an extended enterprise.
  12. 12. 12 ©2016 WGroup. ThinkWGroup.com Knowledge management Knowledge is critical to an organizational network’s success and must be properly managed provide its full value. CIOs should create a system of internal measures that will assess the business value of their organization’s IT capabilities and use those measures to identify IT initiatives that will create and protect intellectual assets. The specific activities that a CIO should undertake regarding knowledge management include the sharing of strategic information with suppliers. This action can facilitate the customization of logistics solutions to coordinate delivery times more closely and improve inventory control. CIOs in financial sectors can work more closely with banks to promote e-business ventures. Additional activities in knowledge management include the development of virtual private networks, data administration, and information security. Business strategy Business strategy is a distinct component of knowledge management. It’s a complex process that involves integrating many individual components, such as technology, into a complete system, although technology isn’t a strategy by itself. A sound IT infrastructure can increase operational efficiency, but it has no inherent business value. A successful CIO must therefore understand the distinction between business strategy and IT to avoid an overreliance on technology. Technology can facilitate a strategy, but that doesn’t mean the strategy will be beneficial. For example, modernizing the IT infrastructure can make a rigidly hierarchical organization even more hierarchical. On the other hand, IT can also assist an organization that is already horizontal into becoming truly networked. CIOs should avoid thinking of their job as merely supporting existing strategies with IT resources. This type of passive support becomes ineffective as soon as IT begins to plays a significant role in business strategy, which is an inevitable occurrence for virtually all organizations. A CIO should instead strive to become a major player in developing business strategies, especially those that will require IT. CIOs need to understand that the IT systems they develop will determine their organization’s capability for processing information. In turn, this capability will support a variety of business strategies for the organization.
  13. 13. 13 ©2016 WGroup. ThinkWGroup.com The value of IT Organizations have traditionally referred to an IT application as “strategic” for various reasons that had little to do with its actual strategic value. The use of this term typically meant that the application was extremely expensive, especially when it had executive support but little economic benefit. Calling an application “strategic” may have also meant business rivals were already using it and was therefore considered necessary to remain competitive. Successful CIOs understand that industry fads don’t make IT investments a strategic decision, regardless of the amount of money they’re spending. They also realize that IT investments only become strategic decisions when they allow information to create value for an organization. This information may be gathered through the IT infrastructure itself as well as business processes. The strategic use of IT in the future will also allow an organization to change its strategy based on real-time information. The crash of dot-com stocks in the early 21st century caused many CIOs to refrain from considering these companies as possible vendors. However, the most successful CIOs don’t allow this history to cloud their judgment of current dot-coms. The dot-com revolution is continuing despite the loss of many of these companies and will profoundly impact some very large organizations. The most significant effect of the dot-coms has been to challenge the assumptions regarding organizational operations. They have forced traditional organizations to examine their vulnerability to competitors who are already enabled with the latest technology. The dot-coms also have pioneered methods of competing with traditional organizations in a fully digital market. Dot-coms have forced traditional organizations to examine their vulnerability to competitors who are already enabled with the latest technology. 
  14. 14. 14 ©2016 WGroup. ThinkWGroup.com Personal traits6 The desired personal traits of a CIO have changed dramatically in response to the increased use of technology. The primary function of traditional IT leaders was often to simply control their resources. CIOs today have a significant leadership role that requires greater skill in developing relationships and building trust among their peers. They must also remain highly visible and make difficult decisions that can directly affect an organization’s well-being. Assisting others Senior managers in the past often bragged about not being technologists and may have even claimed not to use computers. However, anyone in a senior position today would be embarrassed make such a statement. The pervasiveness of technology in general and the Internet in particular require all managers to have at least basic proficiency in computers. A CIO must ensure that an organization’s managers use IT effectively. Communication methods are also an important personal trait for CIOs. They typically communicate through electronic means like other executives, including e-mail, project databases, and private intranets. The paper memos that were once an essential communication technique for managers have virtually disappeared from most organizations. The best uses of electronic communication are those that benefit from the asynchronous nature of these forms of communications. Electronic communication is especially beneficial for implementing a project quickly when the work must be distributed among many people. However, effective CIOs also have good instincts for identifying those occasions when face-to-face meetings are more appropriate. These meetings typically include orientations, team renewals, and trust-building sessions.
  15. 15. 15 ©2016 WGroup. ThinkWGroup.com Fiduciary responsibility The responsibility for securing financial resources and managing them effectively is most commonly associated with a CFO. However, CIOs have a similar responsibility with respect to an organization’s information resources. All CIOs should be able to handle the fiduciary responsibility of hardware and software purchases, programming resources, and maintenance costs. However, top CIOs extend their fiduciary responsibility to include their organization’s information, even when the value of that information can’t be directly measured or budgeted. In many cases, senior management may not even understand that the loss or compromise of this information would be detrimental to the organization. The best CIOs therefore use their fiduciary responsibility to maximize value in addition to the traditional goal of minimizing costs. The big picture CIOs must possess the ability to think in broad terms, especially when it comes to managing information assets. This trait requires an effective combination of wisdom and intelligence, which is a more subtle and complex quality than each of these characteristics in isolation. For example, intelligent CIOs can accurately identify the IT resources of their organization and typically focus on responding quickly to the immediate needs for those resources. CIOs who are merely intelligent are often tempted into forming habits that they repeat in an attempt to decrease response time as much as possible under a particular set of circumstances. This is a worthy goal in itself, but an excessive focus on speed to the exclusion of all other factors can cause CIOs to lose focus on their primary purpose. On the other hand, a wise CIO considers long-term trends in IT that extend beyond immediate needs. Wisdom also allows a CIO to view response time as only one part of the organization’s overall IT strategy. Furthermore, a wise CIO develops many practices that improve the effectiveness of IT resources under a variety of circumstances.
  16. 16. 16 ©2016 WGroup. ThinkWGroup.com No one seriously questions the importance of a CIO’s ability to manage projects, although many of them lack true mastery of this skill.  Project management CIOs routinely experience the pressure of implementing projects more quickly with tighter budgets. No one seriously questions the importance of a CIO’s ability to manage projects, although many of them lack true mastery of this skill. For example, CIO magazine recently conducted a survey of more than 1,000 CIOs and other senior IT leaders. Most of the respondents felt that other leaders in their organization were deficient in their project-management skills. Furthermore, only about 10 percent of these respondents thought that the majority of their organizations’ IT initiatives had been completed on time and on budget during the past two years. Most of the respondents in the survey, however, felt their own performance in project management was above average. They reported that their own projects were on time or on budget about half the time. These respondents gave themselves a rating of 3.7 on project management on a scale of 1 to 5, with five being the highest rating.
  17. 17. 17 ©2016 WGroup. ThinkWGroup.com Summary The duties of a CIO are evolving more rapidly than those of any other senior manager, and the rules for succeeding as a CIO are changing equally quickly. The IT leaders who become the best CIOs thrive on the strategic, architectural, and managerial challenges of this position. Top CIOs are often known as “renaissance” CIOs due to their unique views of this role within the organization. These CIOs also routinely feel that this position is the only one they want.
  18. 18. Drive Your Business Founded in 1995, WGroup is a technology management consulting firm that provides Strategy, Management and Execution Services to optimize business performance, minimize cost and create value. Our consultants have years of experience both as industry executives and trusted advisors to help clients think through complicated and pressing challenges to drive their business forward. Visit us at www.thinkwgroup.com or give us a call at (610) 854-2700 to learn how we can help you. 150 N Radnor Chester Road Radnor, PA 19087 610-854-2700 ThinkWGroup.com

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