When you look up the boards of prominent companies, they are typically littered with CEOs of other businesses. The reasons are obvious. The experience of CEOs of other businesses are relevant, and the advice that they can offer is likely to be the kind that will help augment revenue and/or cut costs as appropriate because no executive in any company thinks as much about these considerations as do the CEOs. The roles that have been the breeding grounds of CEOs, namely CFOs, COOs, and business unit heads have also been board members for the same reasons.
One “c-level” role that has not done nearly as well historically in gaining access to boards is the chief information officer. It is not as though CIOs have not had the ambition to become board members. In fact, of the many CIOs that I advise, over half have articulated their desire to join the boards of companies to me. Historically, there are a variety of reasons why this has been a difficult goal for CIOs to achieve, including
A lack of P&L experience
Historically, CIOs have managed cost-centers. The greatest value they could think to contribute to their companies. As a result, CIOs have not thought enough about the mechanics of profit and loss. They have been distant from sources of new value to the corporation. These are often the topics of greatest interest to boards.
A lack of true operating experience
Unlike, say, a business unit head, CIOs have not run true businesses. Again, they have not had ample interaction with customers. In fact, as I have mentioned previously, more often than not, if you hear a CIO mention “customers”, they will be speaking of internal users of IT – that is colleagues of theirs, highlighting the disconnect between what IT does on a day-to-day basis, and where the true value of the company is derived.
Narrowness of experience
Historically, IT leaders have grown up in IT departments, often from programmer up to the top of the division, without much time spent in other functions. As a result, their perspectives are limited to a single slice of the company.
The lack of CEOs who were once CIOs
As aforementioned, CEOs often come from the ranks of CFOs, COOs, and business unit heads of various kinds. CIOs have not traditionally been the breeding ground for CEOs. As a result, boards’ bias against including CIOs has been partially based on the fact that it is a function that they do not understand from having once led the function.
I use the term “historically” in several cases above because the times are changing, and there are now examples of CIOs who have bucked each of the trends above. Now, an increasing number of CIOs have led or have at least had significant experience in other divisions of the company. For instance, Ben Allen of Marsh & McLennan who went from operating unit CEO to CIO, or Mike Capone of ADP who has gone from GM of a division of that company to the first ever global CIO of that company, or Tim Theriault of Walgreens, who ran a business unit of Northern Trust Bank before becoming the CIO of Walgreen’s. These are three of many examples. It should be noted that each of the examples given, the CIO took on additional responsibilities in addition to that of CIO. (To read my series on the CIO-pluses, please visit this link) executives like these ideally suited to join boards of companies.
There are additional reasons why CIOs are likely to gain greater traction
CIOs are finally acting like business leaders
To a greater extent, CIOs are becoming customer-centric and even customer-facing, and they are running IT with the same metrics that the business holds dear. For example, Bruce Hoffmeister, the CIO of Marriott maintains that everyone in IT must know the mechanics of revenue per available room (RevPAR), a key metric in the hospitality industry. He maintains that if people IT are not thinking amply about their role in augmenting RevPAR, then they are not doing their jobs effectively.
Technology trends are intersecting with business trends
When one looks at the top trends and priorities for CEOs, often times, there is a significant technology component to bring them to life. One is often customer intimacy, as an example. This typically translates to customer or business analytics. This is a concept brought to life with creative use of technology, and the CIO must be integrally involved in the developing or buying the solution, and to a greater degree, they are involved in the interpretation of the information that flows through it in order to generate insights for the company.
A growing number of CIOs are acting more like COOs
I have profiled a number of CIOs who have become COOs and EVPs of Operations and Technology in my Beyond CIO series. One of the reasons why these executives have forged this path is the fact that they were acting like operators to a greater extent when they were CIOs. They leveraged the strategic perch that a CIO has in working with the executives across the company to bring their plans and opportunities to life to gain greater insight into where value can be created. They often developed centers of excellence around areas such as project and portfolio management or vendor management or procurement that became processes that the entire company leveraged. This broad purview and value generated from the CIO role proves the true value it can have.
Companies who sell to the CIO community need CIO perspectives as they build product or service offerings
B2B technology companies have often sold their services to the CIO community. Ironically, they rarely had CIOs on their boards. To an increasing extent, CIOs are joining these boards to provide a customer perspective. Some companies have developed CIO advisory committees. These are different from the boards of directors, but provide a similar function, as strategy, new product offerings, and acquisitions targets are discussed for feedback among several key CIO customers.
The increased focus on cybersecurity
Cybersecurity and information security more generally have become big priorities for CEOs, and as boards strive to stay ahead of the perpetrators, many are inviting their own CIOs and/or the CIOs of other companies to join the board to ensure that there is a regular dialogue on approaches to keep the company and its data secure.
This article kicks off a series of interviews with board level CIOs. The series will include the following CIOs, among others:
- Rob Carter, of FedEx
- Patty Morrison of Cardinal Health
- Kim Stevenson of Intel
- Brian Bonner of Texas Instruments
- Helen Cousins of Lincoln Trust
- Angela Yochem of BDP International
These leaders and others like them are blazing a new path that others are sure to follow. (Please click the “Follow” link above to remain apprised of all updates in the series.) Boards will increasingly think about including the strongest CIOs on their boards to ensure that they do not have any blind spots in their plans both from an innovation and from a risk mitigation perspective.
Peter High is the President of Metis Strategy, a business and IT advisory firm. He is also the author of World Class IT: Why Businesses Succeed When IT Triumphs, and the moderator of the Forum on World Class IT podcast series. To read his series on CIO-pluses, visit this link. To read his series profiling CIOs who have risen beyond that role, visit this link. Follow him on Twitter @WorldClassIT.