How chief information officers can step up to take on the chief digital officer’s role

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The explosion of data and the emergence of disruptive technologies have brought about the fourth industrial revolution—the Digital Revolution.

At the helm of this digital transformation is the Chief Information Officer (CIO) who is responsible for leading the organization in its effective use of IT. But as IT spending has increased, so too have failures regarding its returns. Many third-party researches reveal these failures:

• The CHAOS research shows a staggering 31 percent of IT projects being cancelled before completion
• Gartner estimates that 55 to 75 percent of all IT projects fail to meet their objectives
• IT deployments that exceeded budgets reached 74 percent
• More than 60 percent IT deployments took longer than expected

And generally, the blame for these gloomy outcomes falls on the CIO. This could possibly be one of the key reasons why the involuntary turnover rate of CIOs has been higher than that of other CXOs (or the C-level).

Chief digital officers as replacements

Disappointed by the perceived inability of their CIOs to drive digital transformation, some organizations are now replacing them with Chief Digital Officers (CDO). This only demonstrates the inexperience within the management, which believes that the digital realm is different from the mainstream IT.

Just read the job specifications for a CDO and trust me, it is not very different from the roles and responsibilities of a CIO. In most scenarios, many CXOs don’t acknowledge their role in the digital transformation journey and anything to do with IT is delegated to the CIO. While the digital technology may be new, the business and change management challenges are the same.

The role of the CIO is complex but they can be a successful CDO through these pillars of success, which are beyond broad skills such as interpersonal skills, leadership, building high-performance teams, and ability to unlearn and learn.

Understanding the changeover

CIOs should be able to understand the type of transition they will be facing and the associated expectations by the CEO and the board. When hired, the CIO needs to understand why he or she has been hired. A newly appointed CIO can experience one of the four types of transitions:

• Core Transition: The CIO is responsible for gathering IT capabilities—team, processes, budgets, and technology—to get a new IT organization off the ground.
• Turnaround Transition: The newly appointed CIO takes on an IT organization that is in trouble and works to get it back on track. In this context, the perception of the top leadership is that IT is not delivering expected business value and the previous CIO is seen as a failure.
• Rejuvenation Transition: The new CIO rejuvenates an IT organization that is drifting into trouble. Prior to the CIO’s appointment, tensions were beginning to emerge, often due to a new reporting line for the CIO, changes in the makeup of the IT leadership team, or a new mandate for IT. Given the new expectations, the existing IT organization is often characterized as unfit for the new purpose. Such transitions are a result of the CEO articulating a more strategic direction for IT. This new vision stemmed from different drivers, such as a merger, geographic expansion, new digital ambitions, or other changes in the competitive environment.
• Strategic Transition: The new CIO takes responsibility to preserve the vitality of a successful IT organization and expand it to the next level. The previous CIO is perceived as being successful and having performed well in the role and has either moved into a new role or organization or retired. The chief executive here wants to build on the stability and success of the current IT organization and resources.

CIOs who come in and have been successful have figured out very quickly the CEO’s vision around digital transformation. Building this shared vision needs to be part of the new CIO’s 30-, 60-, and 90-day plan.

Putting the focus on the business

The CIO has to understand that digital transformation is all about business and innovation. In fact, technology is just an enabler of innovation.

As part of the leadership team, the CIO has to be close to reality, with focus on innovations around customer experience, supply chain, and other strategic innovations. Mobile banking did not emerge due to mobile technology. Instead, mobile technology enabled a strategic intent to let customers bank from anywhere and anytime.

Getting dirty with digital

Digital technology is a bit different from the standard IT systems and is still evolving rapidly. A CIO should be hands-on in using digital technology to be able to understand its true potential and use cases. This way, he or she can advise business teams on its potential.

Defining IT success

Creating a heterogeneous team

Understanding the role of a CIO

Driving change at an appropriate pace