The question CIO’s must really ask by Matt Vella @FortuneMagazine October 1, 2012, 5:30 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons By Jeanne G. Harris, Allan E. Alter and Aarohi Sen Hot technology trends are heating up the debate about the future of the CIO. Do cloud computing services and consumer technology create new opportunities for competitive advantage, or do they reduce the importance of CIOs by giving every business access to the same technologies? Executives and employees are making IT decisions in their personal lives and getting more comfortable making them in their business lives. Will employees choose their own devices, and line managers make more IT decisions? These developments have made envisioning the future of IT organizations and their leaders more complicated. Analysts and executives are questioning the purpose of the CIO. One in five business executives admit to having a clear vision of what the CIO role will look like by 2016. Our view? If only the issues were that simple. The key question about the future of the CIO isn’t how today’s technology developments will affect it. It’s what tomorrow could demand of CIOs, and whether CIOs can stretch themselves to lead their organizations into a future unlike today’s. Not one future, but many Enterprise IT doesn’t exist in a vacuum. Our research into the future of enterprise IT found more than 60 forces that will shape IT’s future. Geopolitical forces such as regulations, international relations, nationalism and protectionism. Cultural forces, such as the how consumer technologies affect how people work, play, learn, shop, share and talk. Business forces such as globalization, new approaches to innovation and data-driven decision-making. Disruptive forces such as the vulnerability of technology and information and disruptive disasters. How will they come together? We see four different possible futures. There’s the peaceful, interconnected, global and technology-loving future many technologists assume will happen. It’s an ideal environment for IT innovation and use, but also for ferocious global competition. There’s the opposite, worst-case scenario: the World Wide Web is shredded by state-sponsored cyber-attacks and wars that rip and cripple the global economy, drive people off the Internet, and make trustworthy data as rare as unicorns. Another possibility is less dramatic but still dire: globalization stays strong but cyber-crime and other privacy anxieties scale back Internet activity and slow down IT innovation. Another future is the one mainstream political leaders worry about: Where, as the World Economic Forum’s Global Risks 2012 report warns, “The potentially potent combination of chronic labor market imbalances, chronic fiscal imbalances and severe disparity… lead to a retrenchment from globalization” and the world becomes “more fragmented, inconsistent and mistrustful.”[i] Tomorrow’s demands and tomorrow’s CIOs Each future will inscribe its own job description for CIOs. In worlds where IT retrenches or the World Wide Web unravels, nothing will be more urgent for CIOs than risk management, data security, and building a post-Internet IT architecture. If the future is flat and globally connected, two kinds of top IT leaders will emerge: powerful executives who focus on creating and executing strategy creation and managing customer and partner relationships at companies that compete by being technology leaders, and IT service delivery managers at companies where IT does not drive market leadership. Consider what life will be like for CIOs in a fragmenting world. Global companies will become confederations of locally managed businesses. Local IT executives will be on the front line of IT decision-making. They will create IT strategies that support local business strategies, run systems and contract local services, and develop new systems that meet local needs. The global CIO’s job will be to support the local IT units: communicating global IT needs, establishing architectural, data and security standards so whatever collaboration and interoperability required can take place, and transferring best practices and innovations from local business unit to others. Get ready to stretch We don’t think CEOs should wait to see how the future turns out, then parachute in a new CIO with skills that tightly match its requirements. Many companies will chase those few IT executives whose skills match up. Some organizations will be left in the cold. What’s more, we could tip into one future or another quickly and unexpectedly. Time spent finding a new CIO, getting him started will be precious time lost. Instead, CEOs with foresight will put CIOs in place who can lead IT successfully whatever the future brings. If you lead IT (or lead IT leaders), ask if you or your IT executives are prepared to do the following: Envision futures and uncover their IT implications. This is what being a visionary means for CIOs: to make sense of the forces that will shape nations, societies and economies as much as the technology world. Then, connect forces to futures, futures to demands, and demands to goals, strategies, and actions. For example, each future requires different skills for the IT organization. CIOs will have to recognize what they are, then manage the creation and retention of those skills. Lead organizations through difficult transitions in painful times. Strong CIOs will inspire confidence and loyalty in demanding and unpredictable circumstances. They could be called upon to oversee transformational IT architecture and organization projects. And they will take on tough management tasks. Renegotiating contracts and service level agreements, ensuring compliance with changing laws, and reassigning IT responsibilities among ambitious or reluctant executives will be part of the job. Goad the IT organization into finding new solutions for different futures. IT organizations will need to stretch their capabilities to meet tomorrow’s business needs, whatever future arises. A CEO might need CIOs to create a new business service in a week, a new IT infrastructure in a month, devise an alternative to the Internet. CIOs will have to be gadflies, pushing their employees to break rules and challenge their assumptions and practices in order to come up with new answers for new problems. Calculate the return on investment of security. Each future presents its own level of IT risk, from extreme to modest. CIOs will calculate and security tradeoffs and select from them. What risks are considered acceptable? What is required to manage that degree of risk? How can the cost of that level of security be lowered? When can investing in security provide advantage in an insecure environment? (See figure 1 below.) It’s not realistic to expect CIOs to excel at every skill needed for every eventuality. But CIOs and aspiring CIOs can compensate by stretching their own skills, seeking support from other executives, and building a skilled and prepared IT executive team that. With their CEOs’ support, they can work with and learn from their company’s top strategic and legal minds. They can develop a strong and complementary team of senior and mid-level IT executives by rotating assignments, recruiting, and creating a leadership development program centered on lateral thinking and preparing for alternate futures. But CIOs can’t do any of this unless they and other executives realize the IT future they want may not be the world they get. Get ready to stretch yourself, your IT organization, and your thinking about the future of IT – or get out of the way. Jeanne G. Harris is an executive research fellow and senior executive at the Accenture Institute for High Performance in Chicago. Ms. Harris is the coauthor of “Competing on Analytics” and “Analytics at Work.” Allan E. Alter is a research fellow at the Accenture Institute for High Performance in Boston. Aarohi Sen is a research specialist at the Accenture Institute for High Performance in New Delhi. Figure 1: The signs of stretch CIOs In uncertain times, CIOs need these skills and experiences, or can recruit and manage people who have them. Requirement Skills, experience, characteristics Envision futures and uncover their IT implications. Breadth of knowledge (preferably developed through foreign experience and languages), a quick study, imagination, deep knowledge of IT functions and activities, and how users work with IT. Lead organizations through difficult transitions in possibly traumatic times. Experience leading major IT infrastructure transformations and organizational restructurings from design to implementation. Tested as a leader in high stress situations. Strong negotiator, diplomat and financial manager. Goad the IT organization into finding new solutions for different futures. Experience developing innovative new systems, applications and business processes. Able to solve IT problems with limited resources. Calculate the ROI of security Understands risk management, security threats and tradeoffs, connection between IT security and other corporate security issues.