Recent interviews with CIOs by Deloitte LLP show that technology chops are less a factor in a CIO's ability to drive digital transformation at their companies than how well the CIO understands business objectives and how the business perceives the CIO.
The research showed that IT leaders who have won the trust of their business peers and are regarded as business leaders "were the ones really driving change," said Khalid Kark, U.S. program research leader at Deloitte.
Kark, a co-author of Deloitte's global CIO survey Navigating legacy: Charting the course to business value, said that having business acumen and being perceived as a business partner -- while long touted as the hallmarks of superior IT leaders -- are now essential to the survival of the CIO role.
Technology and data are changing how work gets done. The embrace of digital technologies by companies and their customers has created a climate ripe for CIOs to stretch their business leadership muscles -- or risk seeing their roles atrophy. Part of making the leap to "business co-creator," as Deloitte terms it, requires CIOs to educate the business on the technologies and IT governance standards that are the foundation of digital transformation.
Here is Kark's three-step strategy for CIOs on how to be a business leader. His advice is bolstered by two survey participants -- Vittorio Cretella, CIO at food giant Mars Inc., and Johnson Lai, CIO at NuVasive Inc., a maker of medical devices -- who function as business leaders at their companies.
Operational excellence is step one
The first step in how to be a business leader will come as no surprise; Kark advises CIOs get their internal IT houses in order. "If you don't, you don't have the permission to actually be anything else," Kark said. Ensuring an IT house that is in order requires either personally taking care of -- or installing a deputy CIO to resolve -- any IT operational, security or availability issues.
The advice rings true to Cretella. "If email doesn't work, I can assure you, the CEO doesn't want to talk digital," he said. Mars, headquartered in McLean, Va., restructured its IT department to make room for strategic digital conversations without having to sacrifice operational excellence.
The confectionary and pet food manufacturer did this by consolidating and centralizing the day-to-day IT services and embedding IT employees within the lines of business. Those who work closely with the business "become strategy co-pilots," said Cretella, a long-time Mars employee who oversees a global IT organization of 1,200. "They can rely on our central organization to deliver the day-to-day operations and put more focus on shaping the strategy for this part of the business."
Kark's second piece of advice on how to be a business leader is to build credibility with the business for the entire IT organization. That often starts with the CIO's first line of reporting -- their vice presidents or directors who act as ambassadors by finding and creating opportunities for IT to be seen as business strategists, he said.
"That allows not just a flow of information at the CIO level, but also the credibility and the influence that these [IT] leaders are there with [their CIOs] trying to shape and harness the technologies around their business," Kark said.
At Mars, Cretella and his team are emphasizing the importance of high-quality data to business leaders. "If the way you manage product data internally is not consistent, effective and efficient, it's the good old saying of garbage in, garbage out," he said. "Getting the organization to understand the value of having a sound data architecture and data culture -- it's essential in the digital age."
He uses "stories and powerful examples" to illustrate the importance of data quality. He and his team, for example, extracted 10 years of information out of the company's ERP system and fed the data into an in-memory analytical platform. They showed the business how they could, in minutes, put together a set of reports that normally took much longer to produce.
But his IT team also pointed out that because some of the customer hierarchies were not well maintained, the results yielded less value than they could have. "We said look at how many different definitions you have for this customer group. If you had taken care of that, I could have provided you -- within the space of minutes -- what is the overall turnover," Cretella said. "But I can't. Not because of the technology, but because of the data."
Business strategy = Technology strategy
Kark's third piece of advice on how to be a business leader is to build on the information gathered on where the business is going and align the IT strategy to match it. "Your technology strategy should be one and the same with the business strategy," he said.
Kark's reference to technology strategy, rather than IT strategy, is important. "What CIOs need to do is to align expectations of what the role of technology -- not IT, but the role of technology -- is within the business and then figure out who are the appropriate candidates to collaborate with and drive that change," Kark said. That's easier said than done, he said. If the business needs shift, or if the business doesn't expect IT to push its agenda forward, CIOs face an uphill battle.
Vittorio CretellaCIO, Mars Inc.
Changing the business's perception of IT organizations hinges on communication and relationships, both of which are important to Cretella. He spends 20% of his time on IT operations and 80% of his time thinking about business revenue and growth. To do so, he builds in opportunities to interact with his colleagues in the C-suite. "Data and information have become so important that, as a custodian of that, I need to engage, educate, co-create and provoke peers and stakeholders in other functions," he said.
Indeed, for a digital transformation to be successful, it's essential the business becomes more technology-savvy. At NuVasive, a 19-year-old medical device company specializing in products for spine surgeries, the concept of digital cuts across the C-suite.
"NuVasive is looking at digital across the entire journey -- not just from the touchpoints with the customer, but all of the way through the back office, through the entire transaction and looping that back toward the customer and patient," said Lai, CIO at the San Diego, Calif.-based company. " When we think about digital, it goes even beyond our direct touchpoint of our surgeon customer."
The company's business model hinges on digital technologies, which include platforms and apps for the products they sell. To succeed as a technology-driven business, NuVasive business and IT leaders must be on the same page.
"The C-level suite is becoming more IT aware," Lai said. "Here's a real example: To get more of a holistic focus, I spent two days with my CFO at an IT conference."
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