Last month, while attending Microsoft’s Global CIO Summit, I spoke on a panel moderated by IDG’s Michael Friedenberg. He asked me: Should a CIO report to the CEO or not?
My reply: No one asks if the CFO should report to the CEO… or if the VP of HR should report to the CEO. So why are we questioning whether the CIO should report to the CEO?
Over the course of the two-day Summit, I heard this topic pop up again and again. Several CIOs I spoke with also felt that this reporting structure topic had been brushed under the carpet for far too long. If your IT function happens to be buried within another group and/or you find yourself not aligned reporting-wise with other critical business functions, you and your organization could be at risk of getting marginalized.
Below are three reasons shared with me to explain why some CEOs choose not to have the CIO as a direct report. My thoughts are noted in italics.
The CEO has too many direct reports.If this is true, how does this rationale hold up for other critical functions like Finance, Sales, or HR?
Hierarchy is not a part of our corporate culture. Each company, regardless of culture, is set up by function in order to get day-to-day business done. Most valued functions have a direct link to the C-Suite; all other functions are folded underneath.
The incumbent CIO doesn’t appear to have the same experience/maturity level as the rest of the E staff.In some cases, this may be true. However, long-term, a company needs to attract and retain strong executive IT talent. Why not fix the structure first and then search for candidates vs.. shopping around for talent and then fixing the structure once the IT executive has been hired?
It is my belief that that the criticality of IT to the growth and survival of a company grows exponentially each year, raising the importance of the IT function and the CIO to business leadership. A CIO, focused on increasing share holder value, and equipped with a combination of technology and business acumen, is someone who is likely to have a seat at the company’s executive table. In order to attract the right talent that is able to solve complex data and technology issues within the corporation, the CIO should logically be part of the C-Suite.
This Harvard Business Review article states: “We expect the demand for a sophisticated mix of skills in CIOs will increase. Companies will seek “hybrid” CIOs who have not only business savvy but also experience with analytics, organizational design, and infrastructure— and who know how to wire together a holistic system that can support global growth”.
The upside: we are seeing a new generation of CEOs emerging with the following characteristics: they are technically savvy and they value the power of information technology. The prospect for some CEOs to transform their own companies through the innovative application of information technology might be exciting and worthy to garner the executive spotlight. With such a mindset, I feel there is likely to be an expanding partnership between the CEO and CIO to lead business transformation. And I also think we’ll start seeing more and more CIOs included in the C-Suite to lead such transformations.
Somebody asked me a similar question the other day: When will we see more CIOs sitting on the external boards of companies?Not soon enough! But let me answer that in a future blog.
Author’s note: I have experienced both situations in my career as a CIO; reporting directly into the CEO vs.. reporting into a member of the executive staff. What I want to stress here, is that this is not a personal debate if I should personally be a part of my own company’s C-Suite. Rather, I am concerned that the IT function may not be strategically valued enough to warrant the CIO’s entrance to many companies’ C-Suites.