Over the past decade, the role of th Chief Information Officer CIO- has unquestionably gained stature and prominence in large corporations. Information technology has become pervasive, the costs of computing and connectivity have plummeted, and more business processes within and beyond the enterprise run on business applications?CRM, HR, order-to-cash, and supply chain, to name a few. Leading companies such as FedEx, Dell, Wal-Mart, and General Electric have become legendary for using IT to derive sustainable competitive advantage. All of these factors have heightened the strategic significance of IT.
Yet the CIO role is still plagued by disproportionately high turnover. Research reveals that CIOs have the highest annual turnover among senior executives at companies with revenue of more than $1 billion, with as many as 34% of CIOs changing jobs in one year. By comparison, the turnover rate of CFOs and CEOs is 17% and 12%, respectively see chart, above-. These numbers beg the question: Why is the CIO job so unstable? Part of the answer lies in an ongoing generational transition within the ranks of CIOs at North American and European companies. Many of the first generation of corporate CIOs?successful veterans of Y2K, the first waves of ERP deployment, the Internet frenzy, and the cost-efficiency push of the past half-decade?are currently retiring. Although this has created opportunities for a new generation of executives, transitioning to the CIO role remains a perilous endeavor. Through conversations with senior executives, CIOs, and executive recruiters, one can identify three main challenges to effective CIO onboardings that continue to account for high turnover:
- The evolving role. Compared with other senior-executive roles, that of the CIO is relatively new. Nonetheless, organizations see the job not only as a strategic function, but as a key potential driver of value and competitive advantage?a far cry from IT s origins in back-office data processing and technology operations. The alignment gap. Much has been said about aligning IT with business needs? another core challenge of IT management. The organizational structure of the corporate IT function is in constant flux, driven by changes in the technology landscape. The story of the past 15 years is telling: We ve moved from highly centralized mainframes to distributed client/servers, only to launch a new wave of IT centralization with the rise of the Internet. As Web services and SOA mature, another wave of decentralization of IT could be in the works. Therefore, it s fair to say that IT is a function in perpetual evolution. High risks in IT project portfolios. One of the hard truths about IT leadership is that most large IT projects are delivered late and over budget, posing significant career risks for CIOs. ol> The pervasive nature of these three core challenges complicates the already difficult task of CIO transitioning and presents daunting tasks for new CIOs. From the outset, CIOs must position themselves not only as technology experts, but as strategic business partners. Incredible as it may seem given the complexities of their job, this research shows that the traditional grace period for new CIOs has shrunk to a mere 100 days, compared with the six-month honeymoon they typically enjoyed just two years ago. At the end of 100 days, either I have to execute or be executed, says one of the CIO members who works at a large manufacturing company. The first 100 days should be spent observing, analyzing, and brainstorming, but after that, actionable steps and deliverable results should be the key focus. The CIO Executive Board, an arm of the Corporate Executive Board, has organized its resources around four core imperatives for new CIOs: Identify decision-makers perceptions of the IT value proposition. Have you clarified the extent of your discretionary powers to participate as a strategic business partner? Do you have a clear sense of what business outcomes you re accountable for as CIO, and the metrics that define them? Evaluate IT effectiveness and optimize organizational design. Do you grasp the managerial strengths and weaknesses of the IT organization? Do you have a good IT competency model and clear career paths for IT staff? Align with business goals and prioritize needs. Do you know how to bridge the alignment gap between IT and business stakeholders? Are your governance processes effective at getting business decision-makers to provide a clear sense of IT investment priorities? Execute on transition initiatives by realizing operational objectives. Do you have solid business-focused metrics to define the success of the IT organization in ways that resonate with key business stakeholders? Source and full article: