The demise of the CIO role is dependant on their ability to change the IT operating model
CIOs have a reputation for having relatively short tenures when compared to other members of the C-suite. Depending on which study you read the average time a CIO spends in a role is between three and five years, with four years being the most commonly reported timescale. Chief Financial Officers appear to last longer with average tenures of just under six years while Chief Executive Officers of FTSE-350 companies stay in their posts for over six years.
“If the CIO role and IT departmental function does not change for the Digital age of the 2020’s and beyond then the CIO role will become defunct with the CMO and other departmental leaders bypassing the CIO completely.” says Craig Ashmole, Founding Partner at London based IT Consulting CCServe Ltd. “Having met Ian Cox, ex-CIO and now in consulting he provides some interesting insight to the changing CIO function below.”
A client recently asked me why this was the case; what is it about CIOs which means they spend less time in post compared to other executives? CIOs are often hired to address problems, frustrations and issues with IT which have been hindering the organisation. They therefore arrive in their new role with a mandate to implement change in the IT function and the organisation’s systems. They will spend their first 100 days getting to know the business, meeting all the key stakeholders, understanding the current platform, evaluating the IT function and reviewing the in-flight and planned initiatives. The output of this process is likely to include some kind of IT strategy and roadmap, a target operating model for the IT function and a transformation programme to implement the required changes.
If all goes to plan then around two years later the majority of the changes will have been implemented and the organisation will have an improved IT capability. Of course, if things do not go according to plan then the CIO is unlikely to even make it to the two-year mark! But, assuming they have successfully implemented their vision and strategy for IT, the CIO’s credibility and reputation will be enhanced and they should be well positioned to use their achievements to go on to bigger and better things. Yet based on the average tenure we can see that many find themselves on the move just two years later. And, when they do move on, it is almost certain that their successor will also be given a mandate to change the IT function and update the organisation’s systems. And so the cycle repeats.
So what goes wrong? Why do so many CIOs fail to build on the success of their first two to three years in the role? From my experience many CIOs tend to stand still once the initial changes are implemented. In other words, having resolved the problems they encountered on joining the organisation they then move to a steady state mode, which involves managing the IT function, maintaining the platform and performing upgrades and changes when necessary.
The problem with this approach is that the rest of the organisation is very rarely in a steady state. Business needs continue to change and, if the IT capability does not keep up with this rate of change then it can very quickly fall behind and struggle to deliver what the rest of the organisation requires. So within a year or two of successfully transforming IT, a CIO can find themselves under pressure and facing criticism from stakeholders whose needs are now not being met. And if they cannot (or in some cases will not) respond to this pressure quickly enough then they will soon become another CIO with a short tenure.
So how does a CIO manage to survive in their role for longer than the average of four years? How do they build on the success of their first two or three years in the role to match or even exceed the longevity of the CFO and CEO?
Darwin’s theory of evolution is based on the premise that complex creatures evolve from more simplistic ancestors naturally over time. Random mutations in the genetic code of a creature are retained if they prove to be beneficial (i.e. if they aid survival) and are passed on to the next generation.
Darwin also developed the concept of natural selection in which members of a species that acquire advantages as a result of beneficial mutations are more likely to survive. Hence weaker or inferior members of the species eventually die out leaving only the stronger, more evolved creatures. Natural selection therefore results in the elimination of inferior members of a species over time.
CIOs can learn a lot from Darwin; rather than standing still after the initial transformation programme is completed, they need to continue to make beneficial changes to their role, the IT function and the IT platform. If they can continue to evolve the IT capability in a way that keeps pace with or, even better, anticipates the changing needs of the rest of the business then they are far more likely to survive for longer than the average of four years.
Creatures that do not adapt to changes in their environment die out. CIOs that do not adapt to the changing business environment face the same prospect. This is true to an extent for all members of the C-suite. However, given the rate of change in technology and also in how the rest of the organisation, its customers and its suppliers are engaging with and using technology, it is a particular challenge for IT leaders.
Digital markets move quickly, they are more dynamic than traditional markets and they can be disrupted more easily. To survive and succeed in the digital world, businesses need to be able to respond quickly and easily to changing market conditions, customer preferences or competitor activity. They cannot wait months or years for the IT function to catch-up. This is why the digital revolution will expose those CIOs that cannot evolve far more quickly than would have happened in the past.
CIOs have to become proactive business leaders instead of just being reactive technology leaders. CIOs that can continually evolve the organisation’s IT capability will become one of the stronger members of the C-suite and will see their survival rates growing as a result.
To avoid becoming a victim of corporate natural selection CIOs need to start thinking about the next changes they will make as soon as they have completed the initial transformation. In the digital age this means understanding what the organisation’s customers are going to need next and how technology can help meet this need, and it means thinking about how technology can be used to enable or create new business models, products and services.