Former senior IT leaders who rise to head of the function are often surprised by the competencies that they are expected to have at the C-level. As we discussed in the second installment in this series ("Your Leadership Portfolio: The Critical Move from Senior IT Leader to the C-Level," May 28, 2010), the key competencies for senior IT leaders are Team Leadership, Collaboration & Influencing and People & Organization Development. These are largely people skills, requiring the ability to influence and lead high-performing teams. As the Leadership Competencies Development Journey graphic (below) indicates, the progression to IT Function Head CIO requires the individual to place a much greater emphasis on the development of broad business skills, underpinned by people skills.
Not surprisingly, many very capable IT leaders struggle to master this critical inflection point, which demands more active engagement outside the IT organization. They can prepare for this challenging transition by actively seeking opportunities to get hands-on business experience, while taking care not to derail their IT careers. Ideally, such experience would mean responsibility for a P&L, but it could mean taking responsibility for a business project and its budget, or participating as an equal partner--not just as an IT representative--on a committee focused on some key aspect of the business. They can also look for ways to collaborate more closely with business-unit heads, or other top business leaders, on market challenges. Then, when they step into the C-suite, they will be prepared for the vastly changed perspective it brings.
The Function Head CIO: Leveraging Where and How the Company Makes Money
What does a Function Head CIO really do? Instead of focusing primarily on the IT organization, as the Senior IT Leader does, the Function Head CIO must look out across the entire enterprise, work with C-level peers, and become an active and credible provider to the business. This change of perspective brings three critical competencies, and their associated behaviors, to the fore:
* Market Knowledge: This is about understanding where the company makes money. At the reactive performance level (shown on the y-axis of the Journey graphic), one may have only a general understanding of the company's marketplace. But IT Function Head CIOs at the active level demonstrate a detailed understanding of the market, the competitors, the suppliers, and, where appropriate, the regulatory environment. At the proactive level, they identify market sub-segments and understand the profit potential of each.
Proactive performers look beyond the current environment and identify emerging trends and segments, understand how competitor actions affect competitive dynamics, and the implications for their company's technology landscape. They use their detailed market knowledge to create innovative ways to engage and serve customers, partner with suppliers and blunt competitive threats. At the very highest level, which is rarely attained but is worth noting, the result can be new products or services that reshape the market.
* Commercial Orientation: This is about how the company makes money. At the reactive level, the individual understands the importance of commercial success, works toward financial goals, and understands how various functions contribute to profitability but may lack a thorough understanding of how to link activities to financial metrics. Active performers identify areas of the function that can contribute to profitability, and they act quickly on commercial opportunities. The proactive leader generates profit-making initiatives beyond their immediate area, drives commercial behavior throughout the organization, and finds new ways to maximize profitability from each step of the value chain. At the highest level of performance--again, rarely attained--the leader is able to create long-term advantage by reshaping the business model of the industry.
* Change Leadership: As the graphic indicates, competency in change leadership is also important at this stage and becomes even more critical for the Business Strategist CIO. Performers at the reactive level of Change Leadership tolerate change, while active change leaders are adept at advocating change and communicating a clear and compelling new direction. In pushing for change, they set clear targets that focus people and activities on achieving the change agenda and develop metrics that both monitor and motivate change.
Proactive change leaders take actions to influence specific individuals, giving them parts to play in the change effort. They engage with people throughout the change process, addressing emotional reactions and maintaining commitment. And they build coalitions of such people and create champions who then mobilize others. The even more proactive are also as at home with process as with people. They introduce high-impact actions such as redesigning organization structures, processes and systems to drive and reinforce the desired changes. In rare cases, that ability coupled with their relentless drive for renewal creates and embeds a culture of change that continually adapts to new and evolving markets.
The Transformational CIO: Bringing the Customer into Focus
Having proactively demonstrated Market Knowledge and Commercial Orientation, the Function Head CIO will be poised to take on the role of Transformational CIO with its additional demanding competency of External Customer Focus.
* Customer Focus: Many IT people are accustomed to thinking of customers inside the four walls of the company. But for the Transformational CIO, the focus widens to include the external customer. At the reactive level, Customer Focus is essentially order-taking, a stance the Transformational CIO will have moved far beyond. At the active level, Customer Focus is about actively digging into and understanding the customer's needs, seeing services from the customer's perspective, and identifying the unique key measures of success with a given customer. These behaviors are used internally by the outstanding IT Function Head CIO, but will be extended outward for the outstanding Transformational CIO.
At the proactive level, the benchmark behaviors include delivering improved customer offerings with win/win impact, developing best practices for working with the customer, and championing those best practices internally. The highly proactive Transformational CIO initiates and manages multiple contacts with the customer's organization, creating impact far beyond individual transactions and in some cases becoming a trusted advisor to the customer and contributing to strategic discussions in the customer organization. In rare instances, the most accomplished Transformational CIO is able to partner with the customer to develop new supplier relationship models that can change industry dynamics and force competitors to follow or fall behind.
In the next installment in this series, we take an even deeper dive into this critical stage of the journey, the last stop before its culmination in the role of Business Strategist CIO.
Steve Kelner is a partner in the Boston office of Egon Zehnder International. He is a leader of the firm's Leadership Strategy Services practice, specializing in management appraisals and team effectiveness. He can be reached at email@example.com.
Chris Patrick is a partner in the Dallas office of Egon Zehnder International. He leads the Global CIO Practice. A former practicing CIO, he helps firms across all industries identify, assess and recruit top technology talent. He can be reached at firstname.lastname@example.org.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.