Wednesday, March 27, 2013

Five Factors in Deciding the CIO Maturity Level

When CIOs climb upward the maturity path, then their IT organizations will also move up to achieve the high-performance result.

Modern CIO is one of the most paradoxical and sophisticated roles in contemporary business today. What determines the maturity level (performance, strategy, influence., etc.) of a CIO - the amount of money spent? The assets controlled? The complexity of the organization? The number of staff members? The innovation delivered? Or just a simple title? 

Though it is a pretty subjective question that can depend on many circumstances, the core factors that should be used to determine the level can vary but all encompass the following: 

1. Strategic Leadership 

Any CIO should be proactive in business strategic planning to ensure IT strategy is an integral component of business strategy, and IT is perceived as a value to the business and not a cost center.

  • IT Strategy should always be in sync with business strategy and goals other than ensuring an effective IT operation itself. This allows IT and business strategies to inter-mesh and gets buy-in for implementation. IT strategic plan is a process assessing changes in business strategies and external environment ( technology changes, regulatory update., etc) and re-calibrating the IT direction. The key to success is to develop a shared understanding of where IT should be headed to ensure sustained business success. This shared understanding is not only within IT but also with other IT stakeholders, the C-level execs, business partners and key service providers 
  • There is a sharp delineation between the CIO and the "Director" level position. Directors are primarily focused on the operation and management-level issues of existing infrastructure. While they may play a part in strategic-level planning and leadership issues, But the CIO is more as the leadership role in crafting strategy and conveying the IT vision with primary stakeholders.

2. Know-How - Knowledge (Technology/Business/People)

Within a mature organization, the CIO is a leadership role. It is a commanding knowledge of missions, policies, processes and human capital towards a level of technical agility and informational relevance. The CIO is an enabler who takes the visions, strategies, and planning of the executive level and creates the infrastructure that will exist to support it.

  • From Information to Insight/Intelligence: Today, many organizations/ businesses are shallow in the corporate knowledge. It is people (not machines) that understand "why" the numbers or data is saying what it is saying. We need interpreters that have a comprehension/synthesis level understanding of the business enterprise (not just fact-based information), CIOs and effective IT are business information stewards, play a significant role in capturing business/customer insight and bridging the cognitive difference.
  • CIOs as “T”- Shape specialized generalists to apply Five WHYs to diagnose root causes: Knowledge Management is missing, most organizations do not have the IT or Business SMEs (Subject Matter Experts) that can answer the "why" question to the data that is gathered, or the information being called "Business Intelligence." High mature CIOs and IT don’t only look at symptoms but dig into root causes.

3. Capability-Problem Solving/Handle complexity/Make Profitability

Capability = Capacity + Ability, high mature CIOs have strong capabilities to solve critical business problems, break down complexity into logical steps to streamline business execution, also contribute to business profitability.

  • Reduce Complexity: Develop strategies and processes so as IT contributes more to reduce the organization’s unnecessary complexity 
  • The dollar value CIOs bring to the company: In terms of increased ROE, increased efficiency, shorter time-to-market for the new product offering, cost-saving, business revenue generation, etc... 
  • Leverage limited resource to Growth: While people are an integral part of any success, strategic IT is different from strategic recruiting, the moral of the story is you can't run a business by categorizing one vertical purely as a profit/cost center, you could be closing many opportunities to grow by leveraging strengths of those verticals. But the real question is:  If you have a limited amount to spend on growing your company, where and how will you invest? 

4. Influence - Ability to engage others in a CIO's vision and strategic plan

  • Leadership influence: What determines the level of the CIO position is the impact he/she has made on others (and hence his/her reputation, his/her reporting line, his/her title), hopefully further to his/her achievements, rather than his/her mere achievements for the company bottom line that helped him/her reach his current level. 
  • Position Influence: Another factor (not always a good one) such as: Does he/she sit at the big table (the board). Are they part of the core operating committee of the company? What has there been a progression within the company? Span of Control - total team and number of direct reports. That would indicate leadership and influence.  
  • Knowledge/Social Influence: High mature CIOs are usually thought leaders, who make influence through their breadth of business knowledge and the depth of IT insight, they are also social influencers for varying subjects such as technology, education, customer., etc.

5. Innovation - Ideas brought to the Table for Implementation

Innovation is not serendipity at the digital era, it’s how to transform novel ideas into the business value, and it’s manageable. CIOs and IT are in the right position in managing innovation processes and measure results accordingly.

  • Innovation methodology: Adopt innovative methods to increase IT and Business organization's agility and competitiveness.  
  • Innovation process and technology: Align and utilize technology and processes to increase business revenue, increase customer satisfaction and customer loyalty, optimize total operational costs.
  • Cultivate the culture of innovation: Enforce open communication, and enhance learning agile, build up a creative and productive working environment by taking advantage of the latest technology tools. 
When CIOs climb the upward maturity path, then their IT organizations will also move up to achieve the high-performance result, which will directly drive the business’s overall capabilities to compete for long-term growth.


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