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The New CIO: Chief Innovation Officer- Valutrics

Traditional CIO activities centered on infrastructure and costs, a model built on the historical role of CIO as gatekeeper of technology and protector of corporate information assets. Despite clear evidence that the world is changing, many organizations retain a narrow view of the CIO role. For this reason, it is valuable to learn from innovators willing to share their lessons.

CIO priorities. Data presented in a Gartner report, called the 2013 CIO agenda, implies that CIOs tend to look inward toward IT rather than outward to customer needs. The report lists three top CIO strategies:

• Delivering business solutions
• Improving IT management and governance
• Improving the IT organization and workforce

This data tells us that CIOs prioritize efficiency over delivering strategic value or building relationships with IT customers. Although efficiency is certainly important and necessary for successful IT, a CIO fixated on internal IT operations risks losing the opportunity to develop deep connections with IT business partners and customers. Viewing cost reduction and efficiency as the primary role of IT is an old-school approach that devalues the CIO and reduces IT’s relevance to the business.

Comparing IT budgets to the growth of overall technology spending in the enterprise highlights this pattern of devaluation. According to Gartner, IT budgets have been relatively flat over the last years, with little expectation of substantial change going forward. At the same time, broader expenditures on technology in the enterprise have increased substantially outside IT, shifting to lines of business and functions such as marketing. In other words, even as technology grows, the scope of IT control and impact is decreasing.

The CMO comparison. While CIOs emphasize process and efficiency, research shows that chief marketing officers care about success, relationships, and building value. When Forrester Research asked chief marketing officers about skills and competencies they value, strategy and people emerged first:

• Visioning and strategic thinking
• People management/team development
• Being the voice of the customer in the organization
• Listening to/interacting with customers
• Relationship building with senior executive team

Comparing these world views makes clear that CIOs emphasize operational efficiency while CMOs seek to build connections with management and customers. Given this, it is hardly surprising that IT struggles for relevance while marketing grows its own technology budget independent of IT. And, thus, shadow IT thrives while IT itself cries.

Steve Mann, the CMO of legal information supplier, LexisNexis Group, requires significant autonomy regarding his technology strategy: “Sitting at the intersection of creativity and strategy requires marketing departments to have a significant degree of control over their own technology budget and purchasing decisions.”

The innovator’s call. To explore these issues and tensions, I started a weekly video show, called CxO Talk, with co-host Vala Afshar, who is himself a CMO. During a recent episode, we discussed related topics with the University of New Hampshire’s CIO, Joanna Young. UNH is the largest research university in the state, with a student population of 15,000, challenging her to meet the needs of a diverse constituency consisting of faculty, administrators, and students. You can see a video of our entire conversation with Young embedded at the bottom of this article.

According to Young, building and retaining IT relevance requires being “deeply in touch with your customers, what they are demanding, and what the value proposition is for them.” She is keenly aware that technology is becoming ever more important across the entire enterprise: “We are in an experience economy and you want that experience to be seamless. Today, that experience is highly enabled by technology.”

To keep abreast of the levers that drive customer value at the university, Young spends 75% of her time working with business customers to understand their needs; managing the “nuts and bolts” of IT consumes the remaining 25%. Achieving this distribution of time requires an IT organization that consistently meets business objectives without the drama of continual firefighting.

The CIO of Commune Hotels & Resorts, Mike Blake, told me about a similar concept: “There are areas where IT just needs to be boring. Many CIOs grew up in the heroic era, where we could come in as a white knight to fix the system that was down. The more interesting question is, ‘Can we just have the systems run and not worry about it?’”

Describing the path to “#Rockstar IT” on another episode of CxO Talk, Intel Corp.’s CIO, Kim Stevenson, calls this level of operational excellence “table stakes.”

These CIOs recognize the fact that operational excellence and innovation are prerequisites for IT to engage the business at a strategic level. For innovative CIOs, strategic opportunities arise when IT delivers results without incident, hassle, or drama.

However, not everyone agrees that CIOs should have a broad role within the business. Respected industry analyst, Esteban Kolsky, believes that infrastructure remains the CIO’s primary mandate: “As a bridge between IT and the business, the CIO should focus on today’s infrastructure while figuring out what the organization will need 10 years out.”

Based on extensive conversations with innovative CIOs, here are several points of advice:

• To gain efficiency and lower costs, productize IT services with repeatable processes and technology automation.
• Operational excellence creates credibility, which is a gateway for any CIO who desires strategic conversations with business leaders. If the IT organization does not deliver core projects on time and within budget, the business will not take you seriously.
• Getting close to customers and engaging around their goals, needs, objectives, and strategies is the surest means to achieving and maintaining IT relevance. The most successful CIOs have a trained staff that interacts frequently with users and listens carefully to their concerns and requests.

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