As organisations aim for digital transformation and debate the relevance and role of IT decision makers, how can traditional CIOs deal with the threat of becoming undesirable in the job market?
According to the 2016 CIO Survey by recruitment firm Harvey Nash and consultancy KPMG, the proportion of organisations with chief digital officers (CDOs) rose from 7% to 17%, implying that one in 10 firms hired a CDO in 2015. Appointments of CDOs stalled a little in 2016 – down by 2% – but organisations are assigning increasing importance to the notion of a dedicated digital leader separate to the CIO, and for some the trend is irreversible.
Over the past two decades the emphasis in enterprise technology has moved from managing back-office systems to positioning IT as the primary means of delivering to, and communicating with, customers. Not all CIOs were immediately up for the challenge – or at least were perceived not to be – and new roles such as the chief data officer were created to provide modern management capabilities.
The urge to “go digital” amid this identity crisis has caused a problem when it comes to hiring decisions, as businesses don’t know what they actually require, according to Ian Cohen, a former CIO and now digital advisor at the Leading Edge Forum.
“Some organisations are running around hiring a CDO without even knowing what digital means to them. Frankly, if an organisation has a CIO and is now looking to replace that role with a CDO, it just means they had the wrong CIO to start with,” he says.
“The best CIOs understand that digital is not something separate from their role – it is just a convenient label for predominantly ‘outside-in’ enabling and engaging technologies for customers, clients and markets.”
Regardless of the motivation of organisations for hiring a CIO, or another role such as a CDO, the uncertainty has damaged the CIO and the IT department internally, according to Ben Booth, former CIO at polling firm Ipsos Mori and now an interim IT leader, whose recent assignments included IT and change director at the National Offender Management Service.
“A few years ago, having a CIO and a CDO was necessary in some organisations, but led to fragmentation of resource, effort and expertise. The result was often dysfunctional, and when the digital world was dependent on IT-delivered infrastructure there were often problems,” he says.
Another problem, says Booth, is that many digital experts were not familiar with the demands of cyber security and resilience, which made for flaky systems. This has been corrected though, and CDOs, as well as CIOs, are up to speed with digital realities, the result being a convergence back to a single IT organisation – a situation that has occurred at major government departments such as the Home Office and the Department for Work and Pensions.
“With cloud and outsourcing becoming more intense, the role of the CIO as a resource manager will continue to lose importance, with he or she eventually becoming the CDO”
Fernando Birman, Solvay
Booth echoes the view that the skillset required from executives now encompasses both digital and traditional IT – so IT leaders need to demonstrate capabilities across the board.
“Businesses are best served by having both areas under single integrated management,” he says.
Fernando Birman, head of the digital office at Belgian chemical giant Solvay, says the CIO and CDO briefs can be confusing in many companies. The CIO’s aim has always been to use IT to add value to the business, but enterprise ambitions to achieve digital change have often associated that objective with the CDO.
“Each company deserves a different solution depending on its size, market and culture. The sectors that have a more aggressive profile and are more subject to startup competition preferred to separate CIO and CDO roles, leaving to the latter the challenge of blending into the business and finding innovative solutions,” says Birman.
“In most companies however, the CIO and CDO are the same person. With cloud and outsourcing becoming more intense, the role of the CIO as a resource manager will continue to lose importance, with he or she eventually becoming the CDO.”
In search of a hybrid
It is perhaps a matter of time until the CIO and CDO roles merge, but some CIOs are not prepared to take on this double role yet, according to Simon Gratton, former CDO at Zurich Insurance and Deloitte, and now an interim executive.
“At present, experienced CIOs do not generally have a digital and data mindset, which is a problem for companies looking to transition to a digital operating model. Companies looking for significant change are generally looking outside for a CIO/CDO hybrid, but in reality few of these individuals exist,” he says.
“Ironically, those that look in-house for their next CIO often believe that digital is not needed across back-office systems when, in fact, transformation focus is shifting from digital channels to digital back office.”
Tech leaders seeking opportunities in this new context need to increase their digital and data thinking to be successful, but this varies, according to Gratton. He says that in small and medium-sized companies a single individual can handle the task, while larger businesses require a “golden triangle” between the CIO, CDO and the chief operating officer.
Gratton says the recruitment of leaders who will be effective in a digital context is more about culture than skillset. If corporate cultures and operating models are adapted to embrace digital, rather than focusing on internal politics around IT and digital, not only is success more likely, but will also allow for skills to be cross-pollinated between the CIO and CDO organisations.
“CIO skills need to expand, but the single biggest threat to the CIO is a digitally-averse culture. You cannot separate IT from digital transformation as they need to go hand-in-hand,” says Gratton.
Achieving IT and digital convergence
The need for skills convergence between IT and digital becomes more evident when speaking to recruiters who work with executives focused on both ends of the spectrum. According to Iain McKeand, director of the CIO practice at recruitment firm Harvey Nash, companies are looking for CIOs with expertise that encompasses digital, data, security and innovation, in addition to the technology itself.
Iain McKeand, Harvey Nash
“Organisations want individuals with all those elements in their DNA. The traditional skills required about five years ago around managing and controlling the IT estate have become unfashionable and even undesirable by employers,” he says.
“Hybrid leaders are few and far between. They will often be working on massive change programmes and will immediately move on to the next assignment once they are done. They are hard to find and expensive, which makes things difficult for headhunting.”
McKeand says CIOs transitioning to this new hybrid world realise not only that they have to be more mobile geographically, but also they need to become more marketable to find themselves suitable employment sooner rather than later.
“CIOs who are looking to become more attractive in this digital context need to be able to describe an interesting project they have been involved in, as well as promote it via speaking engagements and by going to as many industry events as possible,” he says.
“It is also worth talking to suppliers and enhancing your knowledge by meeting experts on an almost daily basis to keep up with what’s going on within digital transformation and what keeps organisations awake at night. It’s a learning exercise.”
Read more about the role of the CDO
- Chief digital officer: The newcomer that’s here to stay.
- Just as the CIO finally proves their worth, a new evangelist tries to take credit for all-things-digital: the CDO.
- Is the CIO next in line to become the chief digital officer?