Global CIO: What CIOs Must Do To Survive The Recession
The old ways are gone forever -- CIOs must adapt to a new environment fully engaged with operations, customers, and revenue generation.
The global recession that's crushing weak companies and challenging great ones has trashed -- permanently -- the traditional role of the CIO and the expectations for that role. Caught in a wrenching evolutionary spurt that's jolted executives at every level across every industry, CIOs now need to adapt to a new environment fully engaged with operations and customers and revenue generation -- the old ways are gone forever.
If you think that analysis is a little overdone, take a look through the eyes of executive recruiters at how a growing number of companies today are valuing the CIO position. And remember: These comments come from executive recruiters specializing in the IT market who aren't at all happy about this situation:
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"It's happening across all sectors -- retail is getting creamed, manufacturing is cutting back, consumer goods, financial services, universities, health care, insurance -- they're tightening their belts," she says. In her 20 years of doing executive searches, Lieberman says this is the softest market she's seen ... "Openings [for top IT spots] are declining, companies are not replacing people or they're not going outside to replace them," she says.
Not replacing them? In this IT-immersed world, how can a company function without a CIO? Haven't CIOs, by virtue of their specialized knowledge, made themselves completely indispensable?
[Kirven] says he's aware of about 10 to 12 companies on the East Coast in "the midrange of $200 million to $3 billion" in revenue that are "using this stalling tactic" of not filling a CIO vacancy to save money right now. "If a CFO can save a company $140,000 by not replacing the CIO right now, that's what they'll do," Kirven says.
While I'll offer other reasons, these comments from recruiters establish quite clearly the reality in today's market -- we can discuss the philosophy and the hypotheticals and say the sample is too small and all that, but look at what these companies freezing out the CIO are saying: They're saying that some CIOs haven't been generating sufficient value to justify their salaries. They're saying that in their experiences, CIOs are cost centers. They're saying that the very CIO position itself -- not just any individual office holder -- is nonessential and perhaps should be eliminated.
And most of all they're saying that they'll no longer pay for what their CIOs were delivering: The value just isn't there. The need to have that position, as defined by the former CIO, just isn't there. The impact, contribution, insight, innovation -- and most of all the business value -- is lacking.
In this recession-triggered evolutionary spurt, that's the ugly side of the story. And we can call that chapter "The Death Of The Back-Office CIO." It's not a terribly original concept, because many observers of this business (including InformationWeek and Global CIO) have been hammering away at this topic for quite some time, urging CIOs to abandon the honorable but no longer practical approach of the humble back-bencher who trails quietly behind The Business and (pick your tired cliche) supports/enables/aligns with it. But what is original and what does need to be understood quite clearly is that we're in the middle of a huge shift from philosophical discussion to life-and-death reality, right here and right now, and there will be no going back:
"If a CFO can save a company $140,000 by not replacing the CIO right now, that's what they'll do."
The good news is that in every evolutionary upheaval, there are a lot of survivors, and they didn't get to be survivors by being weak or unassertive. And they're pointing the way to a redefined CIO profession that is deeply immersed in generating revenue, creating end-to-end visibility, driving operational excellence, increasing customer loyalty, accelerating new-product development, and enhancing customer value and business value every single hour of every single day.
These new global CIOs are not going to sit back and wait until some detached entity called "the business" makes all the strategic decisions and then tells IT after the fact to go figure out how to make it work. They're not going to sit back and shrug their shoulders when line-of-business leaders say their best customers are looking at other suppliers. And they're not going to tolerate the starvation of exciting innovations because IT managers can't figure out ways to reduce maintenance costs and apply more IT budget to new projects.