2007 cio leadership survey white paper

8/8/2019 2007 Cio Leadership Survey White Paper

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F O U N D I N G P A R T N E R

center for CIO leadershipA GLOBAL COMMUNITY TO ADVANCE THE PROFESSION

The CIO profession:driving innovationand

competitiveadvantage

October 2007

F O U N D I N G P A R T N E R

center for CIO leadershipA GLOBAL COMMUNITY TO ADVANCE THE PROFESSION


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The following survey was conducted by the Center for CIO Leadership in collaboration with

MIT Sloan Center for Information Systems Research (CISR) and Harvard Business School.

The Center for CIO Leadership brings together executive leaders and experts from around

the world to enhance the use of IT to create business value and advance the CIO profession.

The Center achieves these goals by coordinating and conducting research, education and out-

reach activities that generate practical insights at the intersection of business and technology.


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Executive summary

CIOsaresitting shouldertoshoulder withtherest

oftheexecutiveteam. Ourcompaniesneed IT to

succeedandremaincompetitive. Wecannotpoint

our fingersatorganizationalpositionandhierarchy

asour barrier Weareinthepositiontolead.

Fortune Global 200 CIO

Canthe CIO professionevolverapidly enoughto matchthepaceof globalcompetitionandtechnologicalchange?

Last year, theprospects werefarfrom encouraging. In 2006, CIOsfeltthat

senior managementdidnot understandthetransformativepoweroftechnology

anddidnotappreciatethecontributionthat CIOscould maketothebusiness.

This years 2007 CIO Leadership Survey, conducted by the Centerfor CIO

Leadership, incollaboration with Harvard Business Schooland MIT Sloan

Centerfor Information Systems Research (CISR), findsadifferentenvironment

for most CIOs. Senior managementincreasingly recognizestechnology as

centraltoinnovationandcompetitiveadvantage. Asaresult, moreand more

CIOsare gaining aprominentseatatthetableintheirexecutiveteamsand

playing anactiveroleinstrategic businessdecisions.

The CIO profession:

driving innovation andcompetitive advantage

Page 3

center for CIO leadership


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Theevolutiontoa morestrategic CIO roleisobviously importantfor CIOs

job satisfactionandindividualperformance. Basedonanalysis by theCenterfor CIO Leadership, thechangeisequally importantforcompanies

innovativenessandorganizationalperformance.

Companies witha strategic CIO use IT moreextensively toinnovatenew

productsandservices. They alsosharetechnology moreeffectively across

theenterprise.

Where willtheprofession gofrom here? According totheCIOssurveyed, three

itemsareontheiragenda. First, they wantto bring performanceimprovement

outsidetheorganizationtoexternalpartnering and marketexpansion. Second,

they wanttocountertheshortfallin IT talent by developing high-potential IT staff.

Andthird, they wanttoextendthecollaborationthey achievedontheirexecutive

team tothelinesof businessintheircompanies.

Iftheprogress made by CIOsoverthelast yearisanindicator, theprospects

look brighttoachievethese goals. That would be goodnewsfor CIOs, for

theprofession, andfor businessasa whole. Ina globaleconomy defined by

innovative useoftechnology, theevolutionof businessistiedtotheevolu-

tionofthe CIO profession.

The CIO profession:


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The CIO Leadership Survey

The Centerfor CIO Leadership, incollaboration with Harvard Business

Schooland MIT Sloan Centerfor Information Systems Research (CISR),

conductedasurvey with morethan 175 CIOsfrom leading companies

aroundthe world. Theobjectiveofthesurvey wastohelpadvancethe CIO

profession by yielding a greater understanding oftherelationshipsamong

the CIO role, differentaspectsof ITperformance, andorganizationperfor-

mance. Theseandsubsequent findings will be usedto, among otherthings,

helpshapetheresearchagendaforthenew Centerfor CIO Leadership.

Valued leader: strategic decision maker

Asa memberoftheexecutive managementteam

and Board, I dont believeitisa questionofposi-

tion... itisnow aboutearning equalfooting with my

executivepeersandcontinuing to makethecase

for IT to becentraltoour businessstrategy.

Fortune 500 CIO

Thereisno questionthat IT isnow viewed by the C-Suiteasacriticaldriverof

business value. Forthelastdecade, CIOshaveincreasingly earnedtheright

tohaveaseatattheleadershiptable by effectively communicating theimpor-

tanceof IT toseniorleadership. The 2007 CIO survey revealsthat CIOsare up

tothe job ofpersuading seniorleadersofthe valueof IT.

The CIO profession:


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2006 Survey:

86% of CIOsidentifieda

needtoplay a moresig-

nificantleadershiprole.

2007 Survey:80% of CIOs believe

they area valued

memberofthesenior

leadershipteam.


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Ifproperly positionedandenabled, CIOsplay centralrolesinidentifying and

leading innovationandtransformationefforts. Thesurvey revealsthat most

CIOsaretrustedand valued membersoftheseniorexecutiveteam. Eighty

percentof CIOsrespondedthatthey area valued memberofthesenior

leadershipteam, with 69% indicating significantinvolvementinstrategicdecision-making (see Figure 2 and Figure 3).

Inthe 2006 survey, 86% ofrespondentsfelttheneedtoplay a moresignifi-

cantleadershiprole, either by participating instrategy creationor by shaping

thestrategicoptions being considered.

Thisapparently rapidprogresstowardsexpanded CIO strategicinfluence

may bedrivenpartially by the 2007 survey demographics. Almosthalfthe

2007 survey respondentsare basedin North America (USA or Canada),

The CIO profession:


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45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

3%

1%

13%

4%

28%

32%

37%

42%

19%

22%

Persuading senior leadership of the importance of IT

Relative importance Level of effectiveness

Figure 1


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andrespondentsfrom thisregional groupratedthemselvessignificantly

moreinvolvedinstrategy making than CIOsfrom therestofthe world.Nevertheless, high (andlow) levelsof IT involvementinstrategicdecision-

making aredocumentedinallregionssurveyed.

The CIO profession:


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45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

2%

6%

12%

42%

38%

A valued role for the CIOon the senior leadership team

IT managements involvementin strategic decision-making

not

at all

to a

great

extent

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

2%

9%

19%

40%

29%

not

at all

to a

great

extent

Figure 2 Figure 3


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Strategic integration: building influencethrough capability and results

How doesa CIO haveinfluenceoverthe business?

I usedtothink it wasabout being asked, or where I

reported influenceis moreabout building relation-

shipshaving therightconversations, attheright

times withtherightpeopleand grounding those

conversationsintherealitiesofthe business.Fortune 500 CIO

2007 survey findingsshow that many CIOshavesignificantinfluenceover

theirorganizations strategicdecisions. CIOs whohavehigherlevelsofin-

volvementinstrategicdecision-making demonstrateclearly higherlevelsof:

Contributing tostrategicplanning and growthinitiatives,

Gaining thecommitmentofsenior management,

Earning thetrustofsenior management.

Collectively, thispatternofrelationshipssuggeststhatto bepartofthestra-tegicconversation, CIOs mustdemonstrateeffectivecontributionsto growth

initiatives, as wellasatrack-recordoftrust withsenior management.

The CIO profession:


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Several organizational attr ibutes drive CIO involvement instrategic decision-making

1 2 3 4 5

3

4.2

3.4

3.9

3.1

4.1

CIO effectiveness in

contributing to strategic

planning and

growth initiatives

Senior managementcommitment to IT

Senior management

trust in the IT organization

High

Low

CIO involvement in

strategic decision-

making is:

Where High IT involvement = 4 or 5 rating on a 5 point scale; Low IT involvement = 1, 2 or 3 rating on a 5 point scale.

2006 Survey:

CIOsindicated misper-

ceptionoftheirroleas

a barriertoprofessional

advancement

2007 Survey:

Strategic CIOs show

highlevelsoftrustandcommitmentfrom senior

management

Figure 4


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Strategic influence and IT-enabledinnovation

Having the CIO and IT leadershipinvolvedinstrategicdecision-making

enhancescertain key measuresof IT-enabledinnovation. Specifi-

cally, organizations whose CIOsareinvolvedtoahighextentinstrategic

decision-making demonstratehigherlevelsof:

IT-enabled business modelinnovation,

IT-enabledproduct/serviceinnovationand

Shared, centralizedinfrastructureandservices.

The CIO profession:


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CIOs wi th high involvement in the strategic decision-making processhelp their companies leverage IT for innovation to a greater extent

1 2 3 4 5

High

Low

CIO involvement in

strategic decision-

making is:

3.7

2.7

3

3.2

4.3

3

3.9

3.6

3.7

Shared, centralized

IT infrastructure

and services

Use of IT in design

and development of

products/service

Use of IT for business

model transformation

over next 24 months

IT-enabled

product innovation

IT-enabled business

model innovation

Where High IT involvement = 4 or 5 rating on a 5 point scale; Low IT involvement = 1, 2 or 3 rati ng on a 5 point scale.

3.6

Figure 5


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IT-ENABLED INNOVATION ENHANCES FINANCIAL PERFORMANCE

Among thesubsetoforganizationsparticipating inthesurvey for which

financialdata wereavailable, significantrelationshipsexist betweencer-

tain measuresof IT-enabledinnovationand financialperformance.

Shared infrastructure and services

Use of IT in product and service development

Business model innovation is also critical: The IBM CEO Study

Therelationship betweeninnovationand financialperformanceissup-

ported by arecentstudy of 750 global CEOsconducted by IBM which

revealedthatdeep business modelinnovationisalsocritical. Product,

serviceandoperationalinnovationsareimportant, butcompetitive

pressureshavepushed business modelinnovationhigheronthe CEOs

innovationagenda. Andfor goodreason, as financialanalysisrevealed,

companiesthatput moreemphasison business modelinnovation

experiencedsignificantly betteroperating margin growth (overa five-

yearperiod) thantheirpeers.

The CIO profession:


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Higherlevelsofshared,

centralized IT infrastruc-

tureandservices

Lowerlevelsofshared,

centralized IT infrastruc-

tureandservices

Returnon

Investment 9.1% 4.7%

Returnon Assets 6.0% 2.9%

Higherlevelsof IT usein

designanddevelopment

ofproducts/services

Lowerlevelsof IT usein

designanddevelopment

ofproducts/services

Net Profit Margin 13.0% 9.4%


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Strategic influence versus operationalimpact: building bridges to the business

Thechallengenow is building a businesscase

that weare jointly accountablefor withtheline-of-

businessleaders. They wantthetechnology and

the ROI, butthey dont wanttopartnerinactually

achieving thereturn.

Fortune 500 CIO

Withaseatattheexecutivetableandstrong influenceoverstrategic

decisionsinhand, CIOsarenow challengedtoleveragetheirpositiontoproposeandleadtangibletransformationinitiativesatthe businesslevel.

The CIO profession:


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Strategic influence and the high-performing IT organization

Survey resultsfurtherindicatethatorganizations withhighlevelsof IT

involvementinstrategicdecision-making alsoratesignificantly higher

onthefollowing measuresof IT performance:

Company viewsthe IT functionasanenablerof businessperformance

Company haseffective IT/businessrelationshipsatlevels below theCIO

IT employeeshavethe knowledgeandskillstocommunicateeffec-

tively in businessterms

IT initiativesandplansare well-aligned withtheoverallorganiza-

tionalstrategy

IT and business managerscollaboratesystematically

Thus, itseemsthatthe CIOspresence atthetable may catalyze

moreeffective IT-businessconversationsacross multiplelevelsof

theorganization.


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The 2007 survey resultsshow that CIOs believeline-of-businessinteractions

areofcriticalimportance, butthey arelesscomfortable withthe quality ofthoseinteractions.

Fifty-threepercentofrespondentsconsider promoting collaboration between

IT andlinesof business to beahighestpriority. Yetonly 15% believethey are

extremely effectiveindoing so, whilenearly a quarter (23%) ratethemselvesat

or below theaverage.

The CIO profession:


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70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

0% 0% 1% 2%

6%

21%

40%

62%

53%

15%

How well are CIOs collaborating with the line of business?

Relative importance Level of effectiveness

notat all

extremelyhigh

Figure 6


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Strategic IT and the creation ofcompetitive advantage

Successfully transforming a businessisnotone

individuals, onedepartmentsoroneentitys work.

Itrequirescollaborationacrosstheenterprise, and

thisis where CIOshavethe mandatetolead. We

havethatend-to-end view ofthe businesstopower

thistypeofchange.Fortune 500 CIO

Informationtechnology hasthepotentialtotransform organizationalactivity

ina widerangeofdomains, butorganizationscandiffer markedly in whether

they recognizeandleveragethispotential. Responsestothe CIO survey

in 2006 revealedthat 84% ofrespondents believedthattechnology was

significantly orprofoundly transforming theirindustries, butthattheircom-

panies wereonly fairly effectiveattaking advantageofthistransformative

potential. The 2007 survey responsesconfirm thatthetransformativepower

ofinformationtechnology hasindeedpenetrated many domainsof business

activity (seeFigure 7).

Inconsidering theapplicationof IT forcompetitiveadvantageineachof

sevenareasof businessactivity, nearly allrespondents believethattechnol-

ogy is being appliedtosomeextent. Only 1% to 3% ofrespondents believe

that IT isnot being appliedatallforcompetitiveadvantageintheseareas.

Moreover, foreacharea, 45% or more believethattheirindustry leaders

areapplying IT forcompetitiveadvantage.

The CIO profession:


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Not unexpectedly, IT is used mostextensively in improving processefficiency.

Eighty-six percentofrespondents believetheirindustry leadersare using ITtoalargeor greatextentforcompetitiveadvantageinthisarea, andovera

third (38%) seetechnology being appliedtoa greatextent.

Thesecond mostextensiveareaofapplicationof IT forcompetitiveadvan-

tageisin improving the quality ofinternal managementinformation, where

70% ofrespondents believeindustry leadersareapplying IT toalargeor

greatextent.

The CIO profession:


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CIOs rate leaders in their industry on using IT to createcompetitive advantage

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Reach new markets,audiences and channels

Improve external

partnering capabilities

Launch innovative

products and services

Enable internal

collaboration

Enhance customer

experience

Enhance quality ofinternal information

Increase process

efficiency

Average use or below Above average use

Figure 7


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Anadditionalarea where IT is being leveragedforcompetitiveadvantage

isin enhancing thecustomerexperience, where 60% ofthosesurveyed

believe IT is being usedtoalargeor greatextentandonly 1% believeitisnot being usedatall.

CRITICAL GAPS: EXTERNAL PARTNERING AND EXPANSION EFFORTS

Therearefourareas where IT has beenleastappliedforcompetitiveadvan-

tage. The mostsizeable gapsareintheareasofexternalpartnering and

expansionefforts. Only 10% ofrespondents believethey areapplying IT to

a greatextenttoimproveexternalpartnering capabilities, while 18% admit

using ITonly alittleornotatallinthisarea. Ineffortstoreachnew markets,

audiencesandchannels, a fifthofrespondents use ITonly alittleornotatall.

The CIO profession:


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55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

1% 1%

13%

47%

39%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

1%

4%

25%

51%

19%

Using IT to increaseprocess efficiency Using IT to enhancethe quality of internalmanagement information

notat all

to agreatextent

notat all

to agreatextent

Figure 8 Figure 9


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Externalcollaborationisanimportantpriority forthe worldschiefexecutives.

IBMs Global CEO study of 2006 highlightedtheindispensableroleofexter-

nalcollaborationin building anorganizationsinnovativecapacity, noting that

both businesspartnersandcustomers wereamong thetopthreesourcesfor

innovativeideas, faraheadofinternalresearchanddevelopment. Thus, these

patternsof IT usesuggestthereisroom toenhanceinnovativecapacity by

leveraging IT moreextensively inexternalrelationships.

Theremaining two gapsfurtherillustrateareasforimprovementinanorganiza-

tionscapacity toinnovate. CIOsindicatedthat IT is usedtoalesserextenton

innovation-centricactivities (tolaunchinnovativeproductsandservicesandto

enableinternalcollaboration) thanonactivities where IT is well-establishedas

anenablerofcompetitiveadvantage (increaseprocessefficiency andenhance

thecustomerexperience).

The CIO profession:


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40%

35%

30%

25%

20%

15%

10%

5%0%

1 2 3 4 5

1%

17%

37% 36%

10%

Using IT to improve externalpartnering capabilities

Using IT to reach new markets,channels and audiences

notat all

to agreatextent

40%

35%

30%

25%

20%

15%

10%

5%0%

1 2 3 4 5

2%

18%

36%

30%

14%

notat all

to agreatextent

Figure 10 Figure 11


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The CIO agenda: business collabora-tion and staff development

CIOsrated promoting collaboration between IT andlinesof business as

their mostimportantactivity. Ninety-threepercentofrespondentsratethis

activity anaboveaveragepriority, with 53% rating itasoneoftheirhighest

priorities. CIO attentiontocollaborationechoesthe findingsof IBMs 2006

CIO survey in which 92% ofrespondentsfeltthatit waseitherimportantor

critically importantfor CIOstohave greaterinfluenceandimpactas busi-

nessleaders.

The CIO profession:


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40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

3%

12%

37%35%

13%

Using IT to launch innovativeproducts and services

Using IT to enableinternal collaboration

notat all

to agreatextent

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

1%

13%

37%36%

13%

notat all

to agreatextent

Figure 12 Figure 13


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Twootheractivitiesemergeasprominentonthe CIOsagenda:

Identifying anddeveloping highpotential IT staff isconsideredaboveaver-

ageimportance by 78% ofrespondents, whilenearly athirdofrespondents

(31%) considerthisoneoftheirhighestpriorities. Itis worthnoting that IT

staffdevelopmentissignificantly moreofaconcernto US-based CIOsthan

thoseinothercountries. Thisconcernprobably reflectsthedocumented

shortfallofskilled IT workersinthe US andanticipatesthehighnumbers

ofexperienced baby-boomers expectedtoretirefrom the workforceover

thenextfew years.

Contributing tostrategicplanning and growthinitiatives isratedabove

averageimportance by 76% ofrespondentsandahighestpriority for

28% ofrespondents.

The CIO profession:


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Please indicate the relative importance of the following activitiesfor you as a CIO:

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Promote collaboration

between IT and therest of the business

Ensure reliable, cost-effective IT infrastructure

Improve internal and

external user experience

and satisfaction

Lead and deliverhigh-profile IT projects

Identify and develophigh-potential IT staff

Contribute to strategic

planning and growthinitiatives

Persuade senior leadershipof the importance of IT

Identify opportunities

for business process

automation/enhancement

Average importance or below Above average importance Ext remely impor tant

Figure 14


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Effectiveness gaps in key CIO activities

Theperceivedimportanceofa CIO activity ishighly correlated withCIOs per-

ceivedlevelsofeffectivenessatthatactivity. However, someexceptionsstand

out. Few CIOs, forinstance, feelreally competentintheactivity thatthey

deem the mostimportant. Fifty-threepercentofrespondentsrate promoting

collaboration between IT andlinesof business as being ofhighestimpor-

tance, butonly 15% believethey are extremely effective atthisactivity.

CIO impressionsoftheirstrengthsintalentdevelopmentinthe IT function

presentasimilarstory. Inspiteofthefactthat identifying anddeveloping

highpotential IT staff isconsideredaboveaverageinimportance by 78%

ofrespondents, andnearly athirdofrespondents (31%) considerthisone

oftheirhighestpriorities, only 8% feelthey exhibitthehighestlevelofeffec-

tivenessindoing so.

The CIO profession:


Page 19


70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

0% 0% 1%2%

6%

21%

40%

62%

53%

15%

Promoting collaboration between IT and the rest of the business

Relative importance to CIOs Relative effectiveness

notat all

to a greatextent

Figure 15


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Itisalso worthy ofnotethateventhoughthree-quartersofrespondents

believe identifying opportunitiesfor businessprocessautomationand

enhancement isahighorhighestpriority, morethanhalfofrespondents

ratetheireffectivenessinthisactivity asaverageor below. Thissuggeststhereisstillroom forimprovementinapplying IT toenhance key business

processes. Meanwhile, CIOsaredoing a good job of keeping thelights

on, with 74% ofrespondents believing they effectively ensureareliable,

cost-effective IT infrastructure.

The strategic CIO skillset: putting itall together

Thesenew findingsrevealthatthose IT leaders whohaveattainedapartic-

ularlevelofstrategicinfluencealsoshareimportantcapabilities, performingmoreeffectively incertainactivitiesthanthose whohavenot yetattaineda

The CIO profession:


Page 20


70%

65%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

1% 1%3%

8%

19%

34%

47%49%

31%

8%

Identifying and developing high-potential IT staff

Relative importance to CIOs Level of effectiveness

not

at all

to a great

extent

Figure 16


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seatatthetable. Thesedifferencesinperformancearestatistically signifi-

cant, suggesting thatsuccessfulperformanceoftheseactivitiesisessentialforattaining, andsucceeding in, a morestrategic CIO role.

CIOs whohave gaineda morestrategicrolearestrongerat:

Promoting collaboration between IT and businesses

Persuading senior managementoftheimportanceof IT

Contributing tostrategicplanning and growthinitiatives

Identifying opportunitiesfor businessprocessautomationandenhancement

Improving internalandexternal userexperienceandsatisfaction

CORE CIO ACTIVITIES AND UNDERLYING SKILLS

Strategic CIOsstandout becauseoftheircompetency inthe softerskills:

theirability topersuade, motivate, andengageothersinorderto morefully

leveragethepowerof IT. Specifically, findingsrevealthatacollectionof

differentskillsininteracting andcollaborating witha variety ofdifferentcon-

stituentsare mostsignificantly associated withthose CIO activitiescentral

tostrategicandinnovativesuccess (see Figure 17):

Political savvy: Caneffectively understandothersat work andcan use

such knowledgetoinfluenceotherstoactin waysthatenhanceones

personaland/ororganizationalobjectives.

Influence, leadership and power: Caninspireandpromotea vision; can

persuadeand motivateothers; isskilledatinfluencing superiors; andcan

delegateeffectively.

Relationship management: Can buildand maintain working relation-

ships withco-workersandexternalparties; cannegotiate work problems

withoutalienating people; andcan understandothersand gettheircoop-

erationinnon-authority relationships.

Resourcefulness: Canthink strategically and make gooddecisions un-

derpressure; canset upcomplex work systemsandengagein flexible

problem-solving behavior; andcan work effectively withsenior manage-

menttodeal withthecomplexitiesofthe management job.

The CIO profession:


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Strategic planning: Candeveloplong-term objectivesandstrategies;

andcantranslate visionintorealistic businessstrategies.

Doing what it takes: Perseveresandfocusesinthefaceofobstacles;

andcantakechargeandstandalone, yet beopentolearning from

others whennecessary.

Leading employees: Candelegatetoemployeeseffectively, broaden

employeeopportunities, act withfairnesstowarddirectreports, andhire

talentedpeople.

These findingsabouttheimportanceofinterpersonalandcollaborative

skillsclearly haveimplicationsfor CIO careerdevelopmenttrajectoriesand

training opportunities.

ROOM FOR IMPROVEMENT: CIO SKILL GAPS

Mostsurvey respondentsindicatereasonableskillineachoftheseareas.

However, theoneskill wherethey clearly exhibitadeficiency isin manag-

ing anddeveloping theirowncareers. Althoughanumberofrespondents

feelthey aresatisfactory at developing, maintaining and using professional

relationships, including mentoring, coaching andfeedback to manage my

owncareer, only 7% ofrespondentsfeelthey areexceptionally skilledin

thisarea whilenearly a quarter (24%) believethey needsomedevelopment.

Those CIOs whohavealready acquiredalargerstrategicrolealsoindicate

significantly morestrengthinthearenaofcareer management.

The CIO profession:


Page 22


Important CIO activities

Underlying skills

Promoting collabora-

tion between IT and

the business units

Persuading

leadership of the

importance of IT

Delivering high-

profile projects

Contributing to

strategic planning

and growth initiatives

Identifying opportunities

for process enhancement

Developing

IT staff

Political savvy X X X

Influence, leadershipand power

X X X

Relationshipmanagement

X

Resourcefulness X X X X X

Strategic planning X X X

Doing what it takes X

Leading employees X

Figure 17


23/28

Otherareasforpotentialfocus, whichsupporttheincreasing importance

of softerskills, includethedevelopmentofchange managementskillsand

politicalsavvy. CIOsseeaneedtofurtherdevelopeffectivestrategiesfor

organizationalchangeinitiativesandovercomeresistancetochange. They

alsoseeaneedtoimprovetheir politicalsavvy, whichisdescribedasthe

ability toeffectively understandothersat work andto usethat knowledgeto

influenceotherstoactina way thatenhanceseitherthe CIOs personalor

organizationalobjectives.

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

4%

20%

39%

30%

7%

Career development

skill level

notat all

greatestskill level

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

0%

5%

40%42%

14%

60%

55%

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

1 2 3 4 5

0%

7%

27%

53%

13%

Change management Political savvy

The CIO profession:


Page 23


Figure 18

Figure 19 Figure 20


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The persistent problem ofmeasuring value

A finalimportant finding relatestoperformance measurement. As wasrevealed

by the 2006 CIO survey, measurementof ITscontributiontothe business

continuestochallenge IT leaders. Although mostrespondentsagreethat IT

investmentsaretheresultofcollaboration betweenthe IT functionandlinesof

businesses, measuring thevalueoftheseinvestmentsislessclear. Only athird

(35%) believes, toalargeor greatextent, that ITperformanceisclearly mea-

sured using well-definedand well-understood metrics.

Inparticular, measuring creativecontributionsisproblematicfor many. Only3% ofrespondentsindicatethattheirorganizations measureoutcomesfrom

creativeprocessestoa greatextent, while 8% confesstonotdoing soatall.

Thiscouldhavesignificantimplications. Allinnovation intermsofproducts

andservices, processes, or business modelsoriginatesfrom creativeefforts.

But withoutdocumentationregarding theoutcomesofcreativeprocesses,

theorganizationsability toreplicate, nurtureandsupporttheconversionof

ideasintocommercially viableinnovationsovertime will belimitedand will

beparticularly vulnerableincost-consciousperiods.

CIOscancertainly work towardsenhancing skillsandimproving effectiveness

inactivitiesshownto beassociated withinnovationsuccess. However, thison

itsown, intheabsenceofclear measurement, may be unsustainable. Clearly

thereismoreto bedoneintherealm ofeffectiveperformance measurement.

The CIO profession:


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Report findingsare basedonresponsestoanonlinesurvey by morethan

175 CIOsandothersenior IT leadersfrom aroundthe world. Thesurvey wasdesignedtotesthypothesesandcorrelations between CIO skills, CIO activities,

IT functionperformanceandorganizationalperformance, asshownin Figure

21. Thesurvey wasdevelopedincollaboration with MIT Sloan CISR anda

numberofacademicandindustry advisors, andhostedonline by Harvard

Business Schoolduring July and August 2007.

Thesurvey populationincludedacross-sectionof CIOsandothersenior IT

leaders, whorepresentedorganizationsspanning 18 industries, 6 continents

and 27 countries. Eighty-sevenpercentofrespondentsheldcompany-wide

CIO responsibility; others wereresponsibleforparticular business units, geo-

graphicregionsorotherorganizationalsub-units. Thesamplecomprised IT

leadersof bothlargeandsmallcompanies (Figures 22 and 23). Approximately

halfofthesamplecomprisedpublicly listedcompanies. Italsoincludedorga-

nizationsfrom the governmentandeducationsectors.

CIO performance

CIO activitiesCIO skills IT performance Organizationalperformance

Connecting the dots from CIO skills to organizational performance

What skills

are required?

Which activities

have an impact?

How does IT affect

financial performance?

The CIO profession:


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Figure 21


27/28

Finally, theactivitiesandperformancesofthe CIO andthe IT function

werecorrelated withthe financialperformanceoforganizationsfor whichpublicly reported financialinformation wasavailable, basedonasetof

financial measures.

Survey response by organization size (# of employees)

Less than 1,00012%

1,000 5,00027%

5,000 10,00016%

50,000 - 100,00010%

10,000 50,00029%

More than 100,0006%

Survey response by organization size (revenues US$M)

Up to $500M19%

$500M $2,000M19%

$2,000M $10,000M35%

$10,000M $50,000M16%

$50,000M $200,000M5%

$200,000M $1,000,000M2%

More than $1,000,000M4%

The CIO profession:


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Figure 22 Figure 23


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Acknowledgements

The 2007 CIO Leadership Survey isacollaborativeresearcheffortofthe

Centerfor CIO Leadership. Thestudy wasdevelopedincollaboration withLynda Applegateand Deborah Souleof Harvard Business School (HBS) and

Peter Weill, George Westermanand Stephanie Woernerof MIT Sloan Center

for Information Systems Research (CISR). Additionaladvisorsincluded Hank

Chesbrough (UC Berkeley), Neo Boon Siong (National University Singapore),

Morten Hansen (INSEAD), and The Centerfor Creative Leadership (CCL).

2007 cio leadership survey white paper

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