six attributes of it leaders in 2016

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Page 1: Six attributes of IT leaders in 2016

Drive Your Business

Six Attributes of IT Leaders in 2016

Page 2: Six attributes of IT leaders in 2016

2 ©2016 WGroup. ThinkWGroup.com

IntroductionThe role of IT leaders is experiencing a dramatic shift, moving away from just managing

technology and toward developing business strategy. IT leaders now require expertise in both in

business and technical areas, making the position of chief information officer (CIO) comparable

in status to those of other C-level executives such as chief executive officer (CEO), chief financial

officer (CFO), and chief operating officer (COO). The number of organizations with a CIO has

increased dramatically in response to the increase in the importance of information management,

making the CIO the most recent addition to senior management for many organizations.

The role of the CIO in many organizations has

shifted rapidly from the relatively narrow focus

of managing data processing to the broader

job of managing knowledge. Knowledge

management has now become so important

to a business’s success that it’s often the most

pressing challenge for that organization. For

CIOs, dynamic leadership is the key to success.

Many organizations face new

challenges due to particularly significant

market and organizational shifts.

These changes include decreases in

operational scale due to downsizing and increases due to mergers and acquisitions. The

responses to these shifts have generally included a greater investment in reengineering

operations. The current global estimate on reengineering spending is least $52 billion

annually, with about $40 billion of that total going towards IT. The CIO is therefore at the

center of some of the most costly and volatile changes for many organizations.

Furthermore, businesses can no longer afford to ignore the strategic role of technology, which

is reflected in the growing technical expertise of senior managers. The IT consultancy Cutter

Consortium recently conducted a survey on the role of CIOs in major organizations. That

survey showed that 69 percent of CIOs are members of the senior management team, while

70 percent of CIOs report directly to the CEO. The growing expense of technology alone is

sufficient to get a CEO’s attention, making it critical for CEOs to monitor IT investments.

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The CIO’s role has changed from purely technical to include strategic planning and

organizational management. This shift to a broader strategic role has been accompanied by

an expansion of IT functions to include all knowledge management, a trend that’s commonly

a core component for an organization’s strategic planning. The ideal CIO must therefore

have expertise in finance and marketing, in addition to the usual technical expertise.

Additional changes in the CIO’s role include an increased involvement with both

internal and external customer support, including IT sourcing. The traditional role of

the CIO in customer support has been limited to internal support functions, such as

networking, but it’s now expanding to include the support of external technology. This

shift corresponds with the CIO’s increasing role as an overall knowledge manager.

This white paper will discuss the attributes of top CIOs by

grouping them into the following categories:

• Leadership skills

• Management skills

• Business experience

• Technical knowledge

• Outsourcing approach

• Personal traits

Page 4: Six attributes of IT leaders in 2016

4 ©2016 WGroup. ThinkWGroup.com

Leadership Skills1

Leadership skills are the single most important attributes for a CIO. They’re always required

qualities for this position and are usually the most desirable requirements. Leadership is

a highly subjective quality, although it’s easily discerned. This quality provides an effective

means of distinguishing great CIOs and other managers from those who are merely good.

Great leaders have a strong vision of what they wish to

accomplish, the ability to inspire others, and passion for

their work. They’re also confident in their abilities and

willing to take calculated risks. Leaders should set clear

goals for their subordinates, in addition to providing them

with encouragement, support, and reassurance. Great

leaders are highly effective at coaxing the best efforts

from the people around them. They serve as role models

due to their high principles, sense of honor, and fair play.

Business

Business leaders must have a fundamental understanding of business in general as

well as their specific industry. A shortcoming in this area is quickly visible to a CIO’s

peers and superiors and is a common cause of frustration for senior management.

CIOs must make an active effort to develop a thorough knowledge of their particular

industry, including its value proposition, operating model, competition, market

position and overall business strategy. Those who fail to make this effort or simply

lack the capacity to achieve this level of understanding are doomed to failure

since the contribution they can make to their organization will be limited.

CIOs must also have a foundation in general business principles, including accounting,

finance, marketing, sales, distribution channels and supply chains. Today’s CIOs

must be highly knowledgeable in these principles from both traditional and online

perspectives to meet the typical expectations of senior management. These requirements

are the reason that virtually all organizations require a CIO to hold an MBA.

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5 ©2016 WGroup. ThinkWGroup.com

Relationships

CIOs must form effective business relationships with personnel who are internal and external

to the organization. Internal associates primarily include other C-level officers and business

leaders, while the external individuals with whom CIOs must form relationships include customers,

partners, and suppliers. Building these relationships requires highly effective interpersonal

communication skills to establish the necessary rapport and trust with other people. Senior

C-level executives can readily discern when a newly appointed CIO has poor business

relationships, a shortcoming that’s a common cause of failure for people in this position.

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6 ©2016 WGroup. ThinkWGroup.com

Management skills2

CIOs must be able to manage their own staff in addition to external business

partners. Great managers are effective team builders, so they must also be coaches,

mentors, and motivators. Additional characteristics of top CIOs include the ability to

assign resources, set priorities, and deliver projects on time and on budget.

Managing change

The ability to manage change is a common requirement for CIOs. Many organizations that are

searching for CIOs want to fill a newly created position, rather than replacing a CIO who is moving

on. These organizations typically have never had a CIO at all or are elevating a legacy position

to a true CIO role. In either case, a new CIO can expect a highly dynamic working environment.

For many CIOs, the highest priority

regarding change management is the

expansion of the IT department’s role

from a purely operational requirement to a

strategic element. The general expectation

of this change is a dramatic improvement in IT’s ability

to execute business strategies. CEOs value CIOs who can improve the competitiveness

and efficiency of processes, including continuous process improvement (CPI) and business

process reengineering (BPR). These attributes are particularly valuable in a tight economy.

Communication skills

Effective communication is a vital management skill due to a CIO’s frequent

need to clearly communicate a new strategy and other ideas. This includes

both verbal and written communication, whether it’s with an individual or group.

Communication skills also include the ability to listen, persuade, and negotiate.

For many CIOs, the highest priority regarding change is the expansion of IT from a purely operational – to a more strategic – element.

Page 7: Six attributes of IT leaders in 2016

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Business experience3

Organizations routinely want a CIO with significant experience in a particular industry,

especially finance, health, insurance, or retail. They may be willing to expand their

search by considering CIO candidates with experience in other industries with similar

business models. Some organizations may even prefer candidates in unrelated

industries based on their ability to provide new ways of thinking about their industry.

Hiring ability

Organizations frequently overlook the value a CIO can make in sound hiring decisions.

This ability allows the CIO to attract, groom, and retain excellent employees who can

make valuable contributions to the organization. Candidates who can demonstrate their

prowess in this area can often distinguish themselves from other candidates.

International experience

International experience has recently become a significant attribute for CIOs,

since organizations throughout the world are now actively seeking customers

from other countries. Furthermore, international acquisitions are becoming

a common method of increasing a corporation’s global presence.

A top CIO should therefore possess at

least a basic understanding of foreign

cultures, particularly with respect to their

ways of doing business. In most cases, a

CIO’s international experience need only

provide a general awareness and openness

toward other cultures. This experience

should provide the CIO with the ability to

effectively interact with customers, employees, and partners in other parts of the world. However,

some organizations require specific knowledge of a foreign culture, such as its market or language.

Page 8: Six attributes of IT leaders in 2016

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Technical knowledge4

CIOs must have a high general intelligence, which often manifests

itself as an early interest in technology. Many of today’s

CIOs became hooked on computer hardware when it

first became commercially available. This interest in

technology typically includes early personal experience

with commercial software, the World Wide Web,

and gaming. Most CIOs have a greater potential for

understanding new technology than general managers.

Surveys show that CIOs tend to be motivated more strongly

by new job challenges than financial compensation.

Business managementThe popular perception of CIOs is that they are narrow technologists. However,

even the most technically oriented CIOs must still possess the necessary business

qualifications to be successful. Successful CIOs typically have a thorough

general training in IT and usually think about technology in broad terms.

They’re also drawn to the challenge of understanding the intricacies of new technologies and

are quick to learn the methods of managing it. The best CIOs view technology as a means of

gathering, storing, and analyzing information. This mindset often allows CIOs to identify patterns

that are overlooked by other executives who are more focused on customers or finances.

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The routine use of digital technology is revolutionizing virtually all business activities, but successful CIOs are able to use it effectively without becoming bogged down in the details.

Balancing technology

CIOs should have a view of technology that balances its capabilities with its risks. They

also must understand the need for conservatism when describing the benefits and delivery

schedule of new IT resources, since many organizations have already experienced

overly aggressive promises regarding IT. Designing IT to provide strategic benefits is

an intriguing challenge for successful CIOs. This challenge includes the process of

working with senior management to make the organizational changes necessary to allow

people access to that technology. CIOs are adept at identifying the unique technological

idiosyncrasies of an organization and the personnel who are best able to handle them.

IT architecture

The best CIOs view technology from an architectural perspective, meaning that they

see technology as a means of implementing a strategy, rather than an end unto itself.

This view is especially important in today’s business environment, where the basis of

IT design has changed from mainframes to networks in just a few decades. The routine

use of digital technology is revolutionizing virtually all business activities, but successful

CIOs are able to use it effectively without becoming bogged down in the details.

The ability to focus on

architecture is essential

for obtaining information

that has value to an

organization. A CIO creates

high-level designs to define the relationships between key pieces of technology by using the

concepts of form and function. The next step is to generate the detailed plans needed to implement

the design. Finally, the CIO can produce a low-level list of the IT resources that the design requires.

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Legacy systems

Legacy systems often present a major challenge for a new CIO. Most organizations

hiring their first CIO have developed major emotional and financial investments in

their legacy systems over a long period of time. This situation inevitably results in

a deep integration between the systems and the organization’s operations.

However, legacy systems ultimately place limits on an

organization’s capabilities and will eventually prevent

that organization from supporting new strategies.

Unfortunately, the likelihood of replacing a legacy

system is generally poor, due to the large number of

organizational changes that it typically requires. Assume

for example that an organization has a legacy system

that only supports batch processing. This organization

will probably be reluctant to study the viability of using

wireless technology, which could cause it to miss a

major opportunity for improving its business strategy.

Some CIOs hesitate to replace legacy IT

infrastructure, but a successful CIO forces this decision, manages it, and moves on. For

example, the problem of legacy systems was one of the first items of business for Peter

Solvik when he became the CIO of Cisco Systems in 1992. He and the senior management

team completely replaced that organization’s legacy systems within nine months. B to B

magazine named Solvik as one of its Top 25 E-Champions in 2000, and Network World

named him one of the 25 most powerful people in networking that same year.

Leveraging technology

A CIO with expertise in leveraging technology, often a stated requirement in CIO searches,

provides a significant advantage for an organization. Specific areas of technology that

are particularly beneficial include customer relationship management (CRM), enterprise

resource planning (ERP), data warehousing, e-commerce, sales force automation, and

Web infrastructure. Experience in applications such as SAP or an operating system like

UNIX may still be preferred skills, but are less likely to be actual requirements.

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The concept of a single system – owned by a single organization – is becoming obsolete.

Outsourcing approach5

The Internet is revolutionizing the approach to outsourcing the IT infrastructure for virtually

all organizations. This trend is changing infrastructure from a relatively small number of

computers that are directly owned and operated by that organization to a very large number

of interconnected computers shared by many different

organizations. The concept of a single system owned

by a single organization is becoming obsolete as

computing platforms progress towards an open-

standards environment in which new features

continually become available through the Internet.

This trend has also resulted in a progression from isolated

departments to enterprise systems that connect with many entities outside that organization.

Multiple sourcing

CIOs can no longer afford to consider a single IT outsourcing vendor that will provide a

computing platform along with every possible feature that the organization will ever require.

Successful CIOs must continually monitor new trends in IT for those with the potential

to benefit their organization. For example, CIOs often examine the ability of wireless

devices to replace desktop PCs as the primary method of accessing the Internet. Top CIOs

enjoy the challenge of managing an IT environment of increasing complexity, although

they make a clear distinction between leading-edge and bleeding-edge technology.

Extended enterprises

The best CIOs see their organizations as networks that exploit resources, especially

information. These networks should therefore serve as a conduit for information that

creates business value. Modern organizations should have soft boundaries, as opposed

to the rigid hierarchy that was commonly used in the past. An organizational network is

increasingly likely to include customers and suppliers, resulting in an extended enterprise.

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Knowledge management

Knowledge is critical to an organizational network’s success and must be properly

managed provide its full value. CIOs should create a system of internal measures that

will assess the business value of their organization’s IT capabilities and use those

measures to identify IT initiatives that will create and protect intellectual assets.

The specific activities that a CIO should undertake

regarding knowledge management include the

sharing of strategic information with suppliers.

This action can facilitate the customization of

logistics solutions to coordinate delivery times

more closely and improve inventory control. CIOs

in financial sectors can work more closely with

banks to promote e-business ventures. Additional

activities in knowledge management include the

development of virtual private networks, data administration, and information security.

Business strategy

Business strategy is a distinct component of knowledge management. It’s a complex process that

involves integrating many individual components, such as technology, into a complete system,

although technology isn’t a strategy by itself. A sound IT infrastructure can increase operational

efficiency, but it has no inherent business value. A successful CIO must therefore understand

the distinction between business strategy and IT to avoid an overreliance on technology.

Technology can facilitate a strategy, but that doesn’t mean the strategy will be

beneficial. For example, modernizing the IT infrastructure can make a rigidly

hierarchical organization even more hierarchical. On the other hand, IT can also

assist an organization that is already horizontal into becoming truly networked.

CIOs should avoid thinking of their job as merely supporting existing strategies with IT

resources. This type of passive support becomes ineffective as soon as IT begins to plays

a significant role in business strategy, which is an inevitable occurrence for virtually all

organizations. A CIO should instead strive to become a major player in developing business

strategies, especially those that will require IT. CIOs need to understand that the IT systems

they develop will determine their organization’s capability for processing information. In

turn, this capability will support a variety of business strategies for the organization.

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The value of IT

Organizations have traditionally referred to an IT application as “strategic” for various reasons

that had little to do with its actual strategic value. The use of this term typically meant that

the application was extremely expensive, especially when it had executive support but little

economic benefit. Calling an application “strategic” may have also meant business rivals

were already using it and was therefore considered necessary to remain competitive.

Successful CIOs understand that industry fads don’t make IT investments a strategic

decision, regardless of the amount of money they’re spending. They also realize that

IT investments only become strategic decisions when they allow information to create

value for an organization. This information may be gathered through the IT infrastructure

itself as well as business processes. The strategic use of IT in the future will also

allow an organization to change its strategy based on real-time information.

The crash of dot-com stocks in the early 21st century caused many CIOs to refrain from

considering these companies as possible vendors. However, the most successful CIOs

don’t allow this history to cloud their judgment of current dot-coms. The dot-com revolution

is continuing despite the loss of many of these companies and will profoundly impact

some very large organizations.

The most significant

effect of the dot-coms

has been to challenge the

assumptions regarding organizational

operations. They have forced traditional organizations to examine their vulnerability to

competitors who are already enabled with the latest technology. The dot-coms also have

pioneered methods of competing with traditional organizations in a fully digital market.

Dot-coms have forced traditional organizations to examine their vulnerability to competitors who are already enabled with the latest technology.

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Personal traits6

The desired personal traits of a CIO have changed dramatically in response to the increased

use of technology. The primary function of traditional IT leaders was often to simply control

their resources. CIOs today have a significant leadership role that requires greater skill in

developing relationships and building trust among their peers. They must also remain highly

visible and make difficult decisions that can directly affect an organization’s well-being.

Assisting others

Senior managers in the past often bragged about not being technologists and may have

even claimed not to use computers. However, anyone in a senior position today would

be embarrassed make such a statement. The pervasiveness of technology in general

and the Internet in particular require all managers to have at least basic proficiency in

computers. A CIO must ensure that an organization’s managers use IT effectively.

Communication methods are also an important personal

trait for CIOs. They typically communicate through

electronic means like other executives, including

e-mail, project databases, and private intranets.

The paper memos that were once an essential

communication technique for managers have virtually

disappeared from most organizations. The best uses

of electronic communication are those that benefit

from the asynchronous nature of these forms of

communications. Electronic communication is especially

beneficial for implementing a project quickly when

the work must be distributed among many people.

However, effective CIOs also have good instincts for identifying those occasions

when face-to-face meetings are more appropriate. These meetings typically

include orientations, team renewals, and trust-building sessions.

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Fiduciary responsibility

The responsibility for securing financial resources and managing them effectively is most

commonly associated with a CFO. However, CIOs have a similar responsibility with respect to an

organization’s information resources. All CIOs should be able to handle the fiduciary responsibility

of hardware and software purchases, programming resources, and maintenance costs.

However, top CIOs extend their fiduciary responsibility to include their organization’s information,

even when the value of that information can’t be directly measured or budgeted. In many

cases, senior management may not even understand that the loss or compromise of this

information would be detrimental to the organization. The best CIOs therefore use their fiduciary

responsibility to maximize value in addition to the traditional goal of minimizing costs.

The big picture

CIOs must possess the ability to think in broad terms,

especially when it comes to managing information assets.

This trait requires an effective combination of wisdom

and intelligence, which is a more subtle and complex

quality than each of these characteristics in isolation.

For example, intelligent CIOs can accurately identify

the IT resources of their organization and typically

focus on responding quickly to the immediate needs

for those resources. CIOs who are merely intelligent are often tempted into forming habits that

they repeat in an attempt to decrease response time as much as possible under a particular

set of circumstances. This is a worthy goal in itself, but an excessive focus on speed to the

exclusion of all other factors can cause CIOs to lose focus on their primary purpose.

On the other hand, a wise CIO considers long-term trends in IT that extend beyond

immediate needs. Wisdom also allows a CIO to view response time as only one part of

the organization’s overall IT strategy. Furthermore, a wise CIO develops many practices

that improve the effectiveness of IT resources under a variety of circumstances.

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No one seriously questions the importance of a CIO’s ability to manage projects, although many of them lack true mastery of this skill.

Project management

CIOs routinely experience the pressure of implementing projects more quickly with tighter budgets.

No one seriously questions the importance of a CIO’s ability to manage projects, although many

of them lack true mastery of this skill. For example, CIO magazine recently conducted a survey

of more than 1,000 CIOs and other senior IT leaders. Most of the respondents felt that other

leaders in their organization were deficient in their project-management skills. Furthermore,

only about 10 percent of these respondents

thought that the majority of their

organizations’ IT initiatives had

been completed on time and on

budget during the past two years.

Most of the respondents

in the survey, however, felt their own performance in project management was

above average. They reported that their own projects were on time or on budget

about half the time. These respondents gave themselves a rating of 3.7 on project

management on a scale of 1 to 5, with five being the highest rating.

Page 17: Six attributes of IT leaders in 2016

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SummaryThe duties of a CIO are evolving more rapidly than those of any other senior manager, and

the rules for succeeding as a CIO are changing equally quickly. The IT leaders who become

the best CIOs thrive on the strategic, architectural, and managerial challenges of this position.

Top CIOs are often known as “renaissance” CIOs due to their unique views of this role within

the organization. These CIOs also routinely feel that this position is the only one they want.

Page 18: Six attributes of IT leaders in 2016

Drive Your Business

Founded in 1995, WGroup is a technology management consulting firm that provides Strategy,

Management and Execution Services to optimize business performance, minimize cost and create

value. Our consultants have years of experience both as industry executives and trusted advisors

to help clients think through complicated and pressing challenges to drive their business forward.

Visit us at www.thinkwgroup.com or give us a call at (610) 854-2700 to learn how we can help you.

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