CIOs Earn a Seat at the Table

 
 
By Eric J. Brown and William A. Yarberry Jr.  |  Posted 2010-06-28
 
 
 

The path from IT management to trusted member of an organization’s senior management team varies based on personality, industry, market cap and other factors. However, CIOs who reach the highest levels of influence and effectiveness in their enterprises share a core set of skills and experiences. Based on our discussions with successful CIOs, the following factors strongly influence who gets to move beyond the specialist role to take a seat at the strategic decision-making table:

• The right image. Are you an IT executive who just happens to work for your current firm? Or are you a senior executive who just happens to run IT? If senior management sees you as a fungible IT resource—functioning equally well at a hospital, bank or oil refinery—your image may need polishing. The executive clubhouse accepts only people with deep knowledge of their business. The CIO, CFO, VP of manufacturing and chief legal counsel must be business strategists first, specialists second.

• Financial smarts. Business “numbers” serve as a common jargon across all corporate units. If you know your company’s ratios (operating margin, price/earnings ratio), sales volumes, profit margins, inventory, receivables, etc., then you know where the money comes from and where it goes. You know where the weak points are. Most importantly, you can communicate with senior managers in their own language. For example, your PowerPoint presentation for a new project might end with: “The implementation of this project will add 2 to 4 cents annual earnings per share to the bottom line.”

• Business knowledge. Whether at a board meeting or an employee picnic, senior executives can speak to details of the business. They know business drivers—regardless of whether those include instant customer response, superlative engineering design or best raw materials sourcing. They are also informed about customers, suppliers, associates and regulators. The aspiring CIO commands these basics, along with knowledge of topics ranging from cloud computing to customer segmentation analytics.

• Daily reading. Industry, IT and general business publications, as well as annual reports, provide ideas for process improvements, cost management projects and strategic initiatives.

• Intentional job growth. Your job won’t grow without explicit planning. Some sample steps you can take include the following: Develop IT’s strategic model to align with the business; expand your circle of responsibilities (try volunteering); show interest in all parts of the business; and socialize to the extent that feels comfortable for you.

• Innovative cost management. You should re-duce indirect costs, such as telecom expenses and software license expenses, before you consider layoffs. Audit all IT/telecom bills and renegotiate frequently, and consider using external specialists when you can’t justify full-time resources.

• Contract management. Contract terms are more fluid and negotiable than are generally believed. So ask for caps on increases, reasonable vendor audit clauses, nondisclosure agreements, an explicit statement that you own code written for you by an outside vendor, clarification of the pricing variance between “true up” and unanticipated growth, and clarification of legal names (which entities can use specific software).

• Architectural blueprint and implementation. Building a stable, long-term IT platform enables the CIO to deliver on promises. Senior management is more inclined to accept your advice if you have first delivered on your own department’s promises.

You’ll notice that this article isn’t headed “Getting a Seat at the Table.” You don’t want just a seat next to the CEO to be seen but not heard, except when strict IT matters are discussed.

Your real goal is to be asked to shape business strategy as a peer. That’s way beyond a seat at the table—and much more challenging and satisfying.

Eric J. Brown is the executive vice president and CIO of NCI Building Systems. He has more than 25 years of experience implementing global IT solutions. Brown specializes in linking business vision and strategy to IT’s key objectives. His publications include The Effective CIO (co-authored) and Achieving Success as a CIO.

William A. Yarberry Jr. is president of ICCM Consulting. With more than 30 years’ experience in a variety of IT-related services, his practice focuses on IT governance, Sarbanes-Oxley compliance, security consulting and business analytics. Yarberry’s publications include The Effective CIO (co-authored), Computer Telephony Integration and Telecommunications Cost Management.