center for CIO leadership

CIO Research Synthesis
Communicating the Value in the C-Suite:
Challenge and Opportunity

November 2009

The "Communicating Value in the C-Suite" Challenge

"We don't try hard enough to uncover the real value of IT to the business. At the end of the day it just looks like another IT strategy...not a business initiative."

     - CIO, Large Consumer Goods Company

"More than ever it is critical for the CIO to be able to deliver the message of value. CIOs should approach the business case from the perspective of 'what are the CEOs top 3 issues' and how the investments will help address those issues."

     - CEO, Financial Services Software Company

Hearing from the C-Suite on the Opportunity

In response to our Center members' needs to make progress in cracking the code of communicating business value to the enterprise and the executive team, the Center for CIO Leadership conducted a series of interviews with CXOs, also known as non-CIO executives.

The Center reached out to CEOs, COOs, CFOs and others in the C-Suite to hear their perspectives on the skills and competencies required from their CIOs to drive business growth and value from technology. The Center also learned how CXOs think about the CIO's role and contribution to the business value equation.

The findings provide an interesting point of view from which CIOs can take a number of lessons to advance and lead in their own enterprise.

The Center's research uncovered insight on:

• Technology's role in driving business growth and value
• The skills and competencies CXOs require most from their CIO
• How IT leaders measure up
• How CIOs can more meaningfully contribute to business value as equal members at the executive table

"Information will become even more important - we all know that - and the CIO will play a bigger role in the future, with higher standards and higher expectations."

     - Executive Vice President, Telecommunications Company

"Success [in the CIO role] will be someone who is so intertwined and integrated into the business that they could function well even if pulled out of the CIO role."

     - CEO, Global Outsourcing Company

Summary of the C-Suite Perspective:
Advice on Communicating Value and Leading in the Organization

The Center's qualitative interviews uncovered CXOs' perspectives on what the obstacles and opportunities are for CIOs in defining and communicating value in their organizations. The interviews also uncovered a common set of themes and advice that CXOs believe will help CIOs as they try to tackle approaches to communicate the value of technology and actively participate at the executive table.

CXOs believe that the "opportunity for CIOs to excel as business leaders exists in most organizations," due, in part, to the critically important role that technology plays in all enterprises. However, CXOs also consistently shared the view that CIOs need to step up to this opportunity and use the seat at the table to exercise influence and demonstrate their understanding of the business. One CEO summarized this best when he said, "The CIO role may give you a seat at the table but it is not a guarantee...it has to be earned."

Advice on How to Get There

The following are six recommendations that were presented consistently in our interviews of CXOs. The power of understanding and speaking in the language of the customer as well as the need for collaboration were two themes that resonated strongly throughout:

1. It's all about the customer
2. Credibility comes from collaboration and relationships within the C-Suite
3. Speak the language of business value and growth
4. Protect business value by identifying risk
5. Be reactive at your peril
6. Business experience provides a beneficial edge

CXOs recommended that CIOs consider each of these themes to first understand your C-Suite peers' perception of the opportunity and where you stand. Secondly, focus on specific areas of advice on how CIOs can position themselves to overcome the business value gap and secure their role as a strategic leader.

The Top Six Things to Consider from the C-Suite Perspective

Understand the opportunity is out there, but do not take it for granted

"Technology is the engine for any growth in the company, and drives all of our innovation and growth. But the IT function is not the source of how we figure out what to do differently. That comes from sales and marketing or the client facing teams."

The CIO role might mean a seat at the executive table - but it is by no means guaranteed

• The CXOs interviewed reflect a range of views on the role of the CIO as participant at the executive table; from key strategic partner, to technology functional adjunct.
• The opportunity clearly exists for CIOs to participate, but they have to earn the seat - it is not a given.

"I want my CIO at the table, equal to any peer at the table, to bring functional knowledge and options to bear on key decisions, and have him open minds to broaden the business conversation."

"The technology organization is becoming more of a partner in terms of defining the innovation and necessary strategy and can contribute a lot of ideas."

"The CIO in our organization is too specialized to have a stand alone seat at the table. It would have to be someone with more than their specialty. The CIO role is not a ticket to the C-Suite, but it could be."

"While some of the qualities the CIO has would be very useful in the C-Suite, there are separate but overlapping skills required for the two roles. If someone is a good specialist, it doesn't mean they are qualified for the C-Suite."

"The ability of someone on the IT side to become a member of the executive committee depends on their ability and what they can offer overall to the company. Someone would have to offer a lot to the executive committee."

Map your approach to making the case to the 6 elements that resonate most with the C-Suite

1. It's all about the customer

• CXOs want the value of technology communicated in terms of impact on customers.
• To participate as peer business leaders, CIOs need to be able to talk knowledgably about customers and the business.
• Strategic CIOs make it their business to reach out and learn from client facing teams - and clients themselves - so they can see the world from the clients' eyes and use that to recommend new solutions and strategies.

"The most important skill is being able to understand and then articulate how the customer thinks about the problem. It is hard to grow the business if you don't understand how the customer thinks."

"With a better understanding of the business, the CIO is able to more effectively translate and understand what the client could do if they had different or better technology, and bring those ideas to the table."

Our CIO really wants to be part of the growth of the business - he knows how we make money. We are tied into the customer-centric philosophy and he is in tune with that."

2. Credibility comes from collaboration and relationships within the C-Suite

• Those interviewed underscore the need for CIOs to effectively connect to and collaborate with the rest of the C-Suite.
• Listening to and understanding the needs of C-Suite peers helps to drive those relationships.
• CXOs are looking to the CIO to take the step to understand their perspective on the business and further to invest in providing solutions to their problems.

"The CIO brings value to the group, but he needs to be able to build the C-Suite peer relationships. It's easy to stay in the 'ivory tower' but the CIO needs to get out and have conversations with his peers."

"Our CIO tunes out during C-Suite discussions when we are talking about topics that don't pertain to him, rather than keeping his head in the game for all parts of the conversation. He is a good thinker and could be helpful to the team; instead he loses credibility with the other C-Suite members."

3. Speak the language of business value and growth

• CIOs often speak in operational metrics and technology goals; CXOs want them to translate technology investments into larger business goals.
• CXOs in today's environment look to CIOs to play a key role in increasing value to the business. They want to hear a focused set of key business value metrics that align to each new investment:
• Increased efficiency and effectiveness
• Reduced costs
• New opportunities to serve clients
• Increase in revenue
• CIOs who clearly tie their investment and innovation strategies to these measures will find a more receptive audience for their plans to help grow the business.

"The CIO needs to be a good communicator, and translate technology into something that others can understand. The most helpful CIOs are able to relate technology to how it can help or hinder the larger goals of the business."

"I want to see an ROI on most everything. If we are going to spend money to make money, we need to have better returns, better analyses, more money, or less people."

"We have always looked at technology as the source of new products and enhancements. The economic environment has reinforced and highlighted the fact that the IT organization plays a key role in effectiveness and efficiency as well."

"The economic environment defines the role of the CIO - consolidating costs or developing game changing e-commerce options and bringing these opportunities to the business. The recession has caused a once-in-a-lifetime opportunity to give the CIO a louder voice."

4. Protect business value by identifying risk

• Several CXOs highlighted the influence and impact CIOs can have on managing risk, and the emerging importance of this role as a key way to lead the company forward.
• CXOs are looking for CIOs who understand the risk parameters and can provide early risk indicators.

"As the role of technology increases, the risks associated with technology become greater as well. It is a significant challenge for CIOs to continually monitor that they are not solving one problem and creating others."

"The CIO needs to be able to think about risk. I need more data at my fingertips to prepare for impending disasters, especially in this economy. I want the CIO to look at the data and know what risks are right in front of us, identify our risk exposure and help to mitigate it."

5. Be reactive at your peril

• A key weakness commonly identified by CXOs is the reactive nature of CIOs. Most perceive that CIOs wait to be invited to participate and assume that others have the responsibility to bring them along.
• Effective business leaders show others the path to innovation, increased value and new ideas; they already know what needs to be done, and they bring the ideas to the table.
• CIOs can seize the opportunity to be proactive to learn what their C-Suite peers want and what the business needs...or continue to look to others to pave the way.

"It would be great if the CIO was more involved in the business and did not wait for it to come to him. He needs to become more integrated. For instance, every week we have a call to talk about our clients. The CIO should participate in that call because he has really good ideas."

"My CIO told me, 'I understand you are different and are the new guy in town - just tell me what you want.' He retreated from the real conversation! He still wants me to tell him what I want. He doesn't understand that he needs to take ownership and figure this out for himself."

"Sales, strategic marketing, product management are the drivers for understating and bringing changes and client needs to the table. Technology is usually reactionary, responding to demands brought to the table."

6. Business experience provides a beneficial edge

• CXOs recognize the benefits of mixing broader business experience with technology expertise.
• CIOs who fill in their own business skill mix, and the business skills and knowledge of their teams, enhance their ability to contribute at the executive table.

"One expectation I have of my C-Suite direct reports is that they are good enough business leaders that if someone had to leave for a few weeks, they could go in and run another department on a short term basis. They need to be able cross train."

"The problem is that CIOs often don't have experience outside of IT. The CIOs who have done well have taken sideways moves and have managed a part of the business that has nothing to do with technology."

"Our CIO is not a propeller-head techie. He comes from the business. He has an understanding of business first, and operates as a CIO second. We get ideas vetted from the perspective of ROI before they even get to me, so we have the advantage of both technical and business knowledge."

Key Takeaways

The results of these interviews with the C-Suite underscore several truths for today's CIOs. CIOs themselves refer often to the struggle to communicate business value and to the skepticism of their C-Suite peers in their ability to participate as business leaders in creating that value. The CXOs we interviewed confirm both the struggle and the skepticism. However, and more importantly, the CXOs also emphasize the opportunity they see for CIOs to effectively step into the role of strategic business partner and furthermore provide a clear set of levers for the CIO to pull to make this transition. The receptivity is there, but CIOs need to proactively seize the opportunity to make this happen.

Additional Resources

For additional resources on communicating with the C-Suite and understanding the perspective of your executive peers, visit the Center's resource library.

Methodology and Background

The Center for CIO leadership is establishing a research effort to help advance the CIO profession by performing research, providing education and tools, and facilitating community outreach programs.

The Center launched a quantitative survey in 2008 to assess the core competencies of CIO leaders, which revealed gaps where CIOs identified the need to improve their competencies and skills. Our 2009 research program seeks to understand these skills gaps and to gather insights from CIO members on addressing the core issues.

Earlier this year, the Center conducted a series of research interviews to explore the gap CIOs identify as a major challenge - communicating business value. Read the summary of those findings on the site. One of the key findings emerging from that research is the critical role of the rest of the C-Suite in solving this challenge together with the CIO. The Center conducted this new set of CXO interviews to help member CIOs more effectively define and communicate business value and serve as strategic business leaders.

Acknowledgements

The Center would like to acknowledge the generous partnership and collaboration with RHR International to conduct this research. RHR International is a world leader in executive and organizational development. For over 60 years they have been assisting senior management in the areas of executive selection and integration, CEO succession, management due diligence, accelerated executive effectiveness, and senior team effectiveness. Learn more at www.rhrinternational.com.

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