A Response to "Too Many CEOs Still Don't Get It"

This was a recent post on CIO Magzine's web site, along with a response from Randy Bancino, Managing Partner with Profitable Growth Partners, LLC.

Monday, January 22, 2007

by Paul Gillin

If you never spoke to anyone but your best friends, you'd probably come to have a pretty high opinion of yourself. Similarly, IT leaders must avoid the temptation to believe that everyone appreciates the strategic value of their role as much as they do.

That message came through is subtext of some work that Forrester Research is doing to define IT's place in the corporate value chain. A few weeks ago, I wrote about an interesting and elegantly simple model that the research company has developed to classify IT organizations into one of three basic roles, ranging from keep-the-lights-on utility to strategic partner. I noted that Forrester believes that only about one in five IT organizations fits the strategic profile.
Now the company is doing some research to validate where business executives stand on the value of IT. It is yielding some disturbing findings.

Preliminary results from interviews with 54 CEOs shows that IT organizations are, by and large, still expected to do what's asked of them and not much more. Asked about what role IT is expected to fulfill in the areas of innovation, process improvement and asset management, the executives overwhelmingly replied that it was to participate when asked.

"CEOs have low expectations of what the IT department should be doing and that sub-optimizes their use of IT," said Laurie Orlov, the Forrester vice president and research director who is spearheading the research. She noted that despite all of the technology revolution that has gone on around us, troubling stereotypes remain.

Orlov has been sharing the results of this ongoing research with attendees at the Microsoft IT Leadership Summit. The Summit is a series of regional conferences in major cities around the country that discuss key issues IT leaders are facing and preview Microsoft's technology roadmap. Attendees get to hear from thought leaders like Orlov and many others.

My own interpretation of these results is that attitudes change slowly, but they are changing. Many of today's CEOs are products of simpler times, when technology was unobtrusive and business skills were all that mattered. In those days, an executive was expected to know sales, marketing and finance cold, but took little or no interest in back-room operations. To them, data processing meant punch cards and greenbar reports. Computers were mysterious and data processing organizations were closed and isolated.

It's hard to imagine that any CEO could be ignorant of something that constitutes the largest capital expense on his income statement. But people like that are still around in positions of power, just as there are still people who print all their e-mail. They will be washed out of the system in time, though, and replaced by a new breed of executives who instinctively get the value of IT. That is when we will see the next great leap forward in productivity. Remember that anyone under the age of 30 today has grown up using a PC as fluidly as their parents used a telephone. In a decade, they will begin to make their mark in the boardroom.

If you are an IT manager stuck in an organization that sees no strategic value to your role, you have to ask yourself some questions. Do you want to wait it out in hopes that time will bring change? Do you want to take on the challenge of changing long-held stereotypes? Or would you be better off in a different place? There is no right or wrong answer, but it is clear that a generational shift is at hand. Those are usually times of great anxiety but also great opportunity.

Jan 22 2007 - 4:56pm Paul Gillin ( Permalink ) ( Email This Page )

Post by Randy Bancino, Profitable Growth Partners LLC.

IT needs to "get it" to!

Mr. Gillin raises some great issues with respect to the potential under-utilizations of IT in organizations where the leadership does not see a strategic role for technology. However, I would challenge Mr. Gillin, and other CIOs, to think about why that perception lingers in some organizations. Is it them? Or, is it us? If your IT team doesn’t understand the fundamental business model, or core competencies of the organization, what is the chance that they will be perceived as strategic partners in the business? Mr. Gillin is right that corporate leaders need to see IT in that potentially strategic role, but it is up to IT leaders (and their staff) to be ready, willing, and able to engage in the strategic imperatives of the organization.

Randy Bancino

Profitable Growth Partners, LLC.