CIO vs. CEO – Who Should Lead Digital Transformation Efforts?
CIO vs. CEO – which role should take the lead on digital transformation programs?
Since technology and business models are virtually inseparable, so many C-suite executives can lay claim to at least certain portions of digital transformation programs.
Digital innovation and overall organizational strategy go hand-in-hand, so CEOs can justifiably argue that they should be allowed to direct a digital transformation program.
At the same time, CIOs have the deepest understanding of technology. We could therefore also argue that they are most qualified to lead innovation and transformation efforts.
In fact, as we’ll see below, the data supports one of these conclusions. Let’s break down why one role is better suited for the mission.
CIO vs. CEO: Who should drive digital transformation?
A 2020 study by Tata Consultancy Services surveyed over 1,000 CIOs and IT leaders at companies with average revenues between $7.5 and $10 billion. Among other things, their study was designed to gain a better grasp of the CIO’s role in digital transformation programs.
Here are a few of the key findings from that report:
- 75% of all participants in the study reported that the CIO’s office participated in digital transformation ideation and strategy
- In companies classified as “Digital Leaders,” line-of-business executives and boards of directors were also more involved in ideation and strategy than at companies classified as “Digital Followers”
- The majority of CIOs also took leadership roles in governance (61%) and project management (54%)
- CIOs were more likely to be in charge of digital transformation efforts at leading firms (73%) than at following firms (53%)
- The leading firms were also more than twice as likely as the followers to have digital business developed by the IT department (63% to 28%)
CIOs at leading companies tend to spend more time on digital business innovation (63%) than they do on maintaining existing IT infrastructure (37%). The least successful firms, unsurprisingly, spend more time maintaining legacy systems than innovating and investing in new ones.
These results clearly point to an increased need for digital leadership from the CIO office, and many other consultancies agree with these conclusions.
Gartner has repeatedly suggested that CIOs must step beyond an operational role and take a leadership position in digital transformation efforts.
They have also pointed out that 84% of CEOs expect increased profit margins from their digital initiatives. One result of this is that CIOs are now becoming more responsible for business outcomes and performance.
However, as CIOs adopt more responsibilities, they will need to begin thinking and operating more like business leaders and less like operational managers.
Next, we’ll look at a few strategies that can help CIOs start redefining their role in the organization.
How CIOs can begin transforming their role in the organization
There are quite a few steps that CIOs can and should take as they adjust to the changing expectations that are being placed upon them.
- Innovative training tools such as digital adoption platforms (DAPs) can streamline the implementation and adoption of new software
- Organizational change models can help managers improve the efficiency and outcomes of digital transformation projects
- Attending training courses, such as leadership and development courses, can help CIOs become more effective leaders
Tactics such as these are valuable and necessary, but they are only useful if CIOs have already begun transforming their relationship to the business.
Digital transformation programs are cross-functional initiatives that ultimately require the participation of leaders and teams throughout the organization.
One of the best ways forward, according to Gartner, is by engaging other business leaders. After all, without the support and cooperation of other executives, cross-functional initiatives will run into far greater challenges.
To support digital business acceleration, the firm recommends having five conversations with other business leaders:
- The chief financial officer (CFO)
- The chief marketing officer (CMO)
- The chief human resources officer (CHRO)
- The chief executive officer (CEO) and the board of directors
- Their direct reports
Each conversation, in turn, should have three specific goals:
- Inspire partners by understanding their point of view, learning to speak their language, and creating a compelling vision that shows them how technology can positively impact them
- Empower yourselves by planning a route through potential organizational culture issues and “political landmines,” and make a case for change by identifying a shared mission and sense of purpose
- Engage them by developing a plan, metrics, and action items that they can follow when implementing the plan
In short, these recommendations are practical first steps that CIOs can take to begin building new bridges and establishing solid partnerships with other executives. Over time, these types of collaborative relationships will become the standard operating procedure – and, ultimately, critical for CIOs who want to build agile, digital-first organizations.