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The CEO-CIO relationship has been characterized as everything from an enormously uncomfortable marriage to square pegs versus round holes to irreconcilable differences. Although making light banter about these notoriously touchy relationships is guaranteed to get everyone to crack a smile while sitting around a boardroom table, like most jokes, theyre funny because theyre somewhat true.
CEO and CIOs have never seemed destined for a peaceful coexistence. By various accounts, blame is placed with misaligned goals, different or even inadequate training, poor communication, or a lack of understanding. An already-touchy situation is frequently aggravated by tight budgets, abbreviated time frames and the resulting failed projects as both parties point the blame elsewhere.
Adding insult to perceived injury, a report released Feb. 9 by Forrester Research found that while most CEOs are pleased with their CIOs, its mostly because theyve set low expectations of ITs role in the enterprise.
In surveying 71 CEOs at companies with greater than $100 million in revenue, Forrester found that, overall, CEOs had generally positive views of their IT leadership, with 59 percent of CEOs expressing that they were satisfied or very satisfied with their respective CIOs leadership.
“The surprising part of the findings was the fact that CEOs were generally satisfied with IT but, at the same time, didnt believe that IT was proactive in terms of business innovation, cost improvements or effective asset management,” said Laurie Orlov, vice president and principal analyst at Forrester and author of the report.
While just 14 percent of CEOs expressed dissatisfaction, more than one-quarter (27 percent) reported that they were neutral or had no opinion of their CIOs work.
Satisfaction Correlated with Minority Situations
The longer a CIO had been in his or her job, the happier the CEO was with his or her work, according to the report. Unfortunately, most CIOs have short job tenures.
Twenty-one percent of CIOs surveyed had been in their jobs for less than a year, 41 percent had been in their jobs between one and three years, 30 percent had been in their positions for four to 10 years, and just 8 percent had been CIO for more than a decade.
Though 85 percent of CEOs reported that they were pleased with CIOs who had been at the job for more than four years, less than half (48 percent) of the CIOs had been in-house for that amount of time.
CEOs satisfaction level dropped by almost half to 43 percent with regard to CIOs who had a tenure of less than three years, a span of time for which nearly two-thirds (61 percent) of CIOs had been in their positions.
Beyond length of tenure, Forrester found several other factors that appeared to influence CEOs satisfaction with CIOs. CEOs were happier with CIOs who kept them informed, with 78 percent expressing satisfaction with the IT performance of CIOs whom they felt communicated effectively with them.
However, just 63 percent of CEOs had their CIO as a direct report, increasing the number of hurdles to direct communication.
An additional correlation was seen among CEOs who had directly hired their CIOs; 76 percent of this group declared that they were satisfied or very satisfied with their CIOs performance. Yet, as few as half (52 percent) had actually hired the CIO themselves.
“Im not surprised,” commented Jim Lanzalotto, vice president of strategy and marketing at Philadelphia-based Yoh Services, on the findings. “If they dont hire them, there is less of a personal relationship.”
CEOs Had Set the Bar Low
Yet even CEOs who viewed their CIOs positively still had low expectations of them, often casting IT into marginalized business roles.
When asked about ITs role in business innovation, only 28 percent of CEOs characterized IT as providing proactive leadership, 34 percent portrayed ITs role as poor or mediocre, and 24 percent characterized IT as only innovating when pressed to do so.
When the CEO included the CIO on the executive team (evidenced in 79 percent of companies surveyed), had hired the CIO directly or expressed satisfaction with CIO-CEO communications, he or she described ITs role more positively.
But the criticisms kept coming, as only 30 percent of CEOs depicted IT as demonstrating proactive leadership for business improvement. About half (54 percent) of CEO respondents were unimpressed with ITs ability to track and manage assets (people and equipment), and less than one-third (31 percent) observed that IT was effectively managing assets as part of its ongoing responsibility.
However, when the CIO was considered a good communicator, each of these percentages was higher.
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A Formula for IT Failure
CEOs in smaller companies (fewer than 1,000 employees) were generally happy with ITs role but had lower-than-average expectations as the companies grew, leaving the authors to conclude that a formula for IT failure was being created.
“This is going to be a concern as the firms grow, and its because they hadnt done enough when the firms were smaller to support expectations as they grew,” said Orlov.
The CEO-CIO gap will only increase as a company gets bigger, the authors concluded, worsening an already tentative situation.
“Larger firms have more complexity in their environments and have a tougher job implementing new business changes quickly,” said Orlov.
CEOs and CIOs Advised to Fix It
Forrester concludes that CEOs need to educate themselves about the role that IT and CIOs play in their companies or risk their companies falling behind their competition.
To optimize success, CEOs should demand that CIOs do more than maintain the status quo by putting IT in a more leadership role, encouraging CIOs to take on more process change initiatives and backing the CIO in the face of the business units resistance to change.
Forrester doesnt let CIOs off easily, however, calling on passive IT executives to boost their aspirations. CIOs who are resting on the laurels of low expectations are told to move IT practices to a higher level of maturity and stability, market the good things they do to their CEOs, and educate the CEOs and top executives who dont understand IT.
“If CEOs arent happy with their CIOs, maybe they should think about how they hire them. But if CIOs are resting on the laurels of CEOs low expectations, they will further perpetuate them,” said Orlov.
“CIOs should make sure theyre connected to business strategy. If youre doing more than they can see, market what youre doing. If they dont understand it, educate them.”
Business-Background CIOs
The root of the CEO-CIO gap lies beyond communication, tenure, company size and direct hires, some analysts argue. Simply put, it lies within the CIOs background.
“The best CIOs I have been around have been businesspeople and not technologists. They came out of business and grew into the technology role. They often need a strong CTO [chief technology officer] to support them, due to the technological nature of their work, but they often come from finance or marketing. At that level of the game, you have to know how business works,” said Lanzalotto.
The CIO job is really a business job, Lanzalotto argued, and the CIOs job is to come up with IT solutions for business problems. He or she must be able to speak in business terms to business people.
“Ive seen CIOs the most successful when they have a mix of skills and a diversity of roles. Its the same thing on the business side—you need the heads of marketing to understand technology,” Lanzalotto said.
Yet, when the relationship breaks down, blame should be pointed in both directions.
“When you have a technology issue, its not just the CIOs fault, and when you have a business issue, its not just the CEO,” said Lanzalotto.