Three vectors of a holistic transformation

Before understanding the responsibilities of the new CIO, it’s important to understand the nature of tech transformations themselves. In most cases we’ve observed, tech transformations are implemented as a set of disjointed initiatives across IT. That leads promising developments to stall out or underdeliver. We have found that a tech transformation must be holistic to deliver full business value. Creating powerful customer experiences, for example, requires a data architecture to track and make sense of customer behavior. Architecting modular platforms needs revamped approaches to hiring in order to get top-flight engineers.

This reality requires a CIO to first come to terms with the scope of the transformation itself. In our experience, it’s been helpful to think about it along three vectors:

1. Reimagine the role of technology in the organization. This vector includes establishing the role of technology as a business and innovation partner to design a tech-forward business strategy (for example, tech-enabled products and business models), integrate tech management across organizational silos, and deliver excellent user experiences.
2. Reinvent technology delivery. IT needs to change how it functions by embracing agile; improving IT services with next-generation capabilities such as end-to-end automation, platform as a service, and cloud; building small teams around top engineers; and developing flexible tech partnerships.
3. Future-proof the foundation. To keep pace with rapid technological advancements, organizations need to implement a flexible architecture supported by modular platforms, enable data ubiquity, and protect systems through advanced cybersecurity.

Five traits of a transformative CIO

For IT to become a driver of value, the transformative CIO also needs a new set of skills and capabilities that embody a more expansive role. In working on tech transformations with hundreds of CIOs, we have identified five CIO traits that we believe are markers of success.

1. Business leader

To help technology generate business value, the transformative CIO has to understand business strategy. Findings from our 2018 IT strategy survey reveal that companies with top IT organizations are much more likely than others to have the CIO very involved with shaping the business strategy and agenda, and strong performance on core IT tasks enables faster progress against a company’s digital goals. CIOs who can make this leap tend to take the following actions.

Learn the business inside and out

The scope of an IT transformation means that CIOs must be prepared to interact with the business in different ways. We have found, for example, that the best CIOs go far beyond meeting with the C-suite or attending strategy meetings. They invest time with functional and business-unit leaders and managers to gain an in-depth understanding of business realities on the ground and go out of their way to develop a nuanced and detailed understanding of customer issues. CIOs do this by continually reviewing customer-satisfaction reports, regularly monitoring customer-care calls, and participating in user forums to hear direct feedback.

As one large financial institution set out to build its digital products, the business and technology teams jointly led user listening and feedback panels early and often throughout the development process. Both technology and business leaders made it a priority to attend these panel discussions so that they could effectively guide their teams on developing products that would best address the needs of end customers. The CIO of a B2B technology-services company, meanwhile, meets customers on a regular basis to get firsthand feedback on both products and the customer’s experience of doing business with the company. He uses these perspectives to inform his technology decisions.

Take responsibility for initiatives that generate revenue

CIOs can further develop business acumen by taking responsibility for initiatives that generate business impact, such as building an e-commerce business, or by working with a business-unit leader to launch a digital product and then measure success by business-impact key performance indicators (KPIs), not technology KPIs. Such efforts allow CIOs to build a deep understanding of the business implications of technology, such as customer abandonment because of slow download times on a site or other poor user experiences.

As part of a digital transformation, for instance, the CIO at a large financial institution committed to developing digital products to help the business scale its presence in a new market. While the CIO already understood how to build systems to support financial products, he and his team had limited experience in creating new digital products to sell directly to consumers. So the team created a program built on rapid test-and-learn cycles to identify what mattered to customers and meet those needs. Subordinating tech decisions to customer needs was crucial in allowing the CIO and his team to develop a digital offering that succeeded where it mattered: with consumers.

Get on boards

Developing a deeper well of business knowledge often requires CIOs to extend their networks beyond the organization. One of the best ways to do that is by joining the board of another company. A third of the boards of companies within the Fortune 500 today include a former CIO or CTO, and that number continues to increase. ¹