I attended MIT’s CIO Symposium last week and had many insightful conversations with the senior IT leaders and researchers in attendance. An important theme that came up repeatedly during the conference was the need for more CIOs to engage with their company’s Board of Directors.
“I’m finding that Boards and Executive committees are now a much more active part of the conversation around technology,” Peter Weill MIT senior researcher and chairman for the Center for Information Systems Research, told attendees.
Technology is no longer viewed simply as a functional silo. As companies focus more on customer experiences, security, and BYOD, CIOs are in the best position to engage and communicate with a company’s Board.
Clorox CIO Ralph Loura’s recent promotion to the company’s executive committee is proof of this. Ralph was the first IT leader on the executive committee, in Clorox’s 100-year history. No doubt, the strategic importance of CIOs can’t be ignored.
Here are some of my key takeaways on CIOs and Board interactions from the conference.
More CIOs Need to Talk Regularly to their Boards
The number of CIOs that present regularly to their company’s Board is limited. During the conference, it became clear to me that forward-thinking CIOs must make this a key priority to ensure success. MIT is currently conducting a research poll on “Engaging Boards and Executive Committees on Digitization.” So far respondents indicate about 40% of CIOs present to the Board of Directors more than once a year, but not at every meeting. The poll is still ongoing, so I’m interested to see the final report when it is released.
Shawn Banerji, Managing Director of Russell Reynolds Associates told audience members that the current representation of IT on or to Boards is simply not enough. “A minority of CIOs present to the Board today. And the issues that CIOs and Boards are talking about are reactive, such as security. It’s not as much about the strategic impact of digitization.” The opportunity is ripe for CIOs to become the key connector between technology and the business’ Board. Shawn said there would likely be more interaction between the two, going forward.
Business Transformation Should Be On the Agenda When CIOs Present to Boards
Research has shown that businesses and Boards have a thirst for understanding the economic value added by technology-enabled projects. CIOs are best positioned to show how technology can provide better return than other capital projects. The key is to communicate this by using metrics and KPIs that matter to the Board, such as growth and margin expansion, for example.
For CIOs to lead these conversations at the Board level, they must be able to prove the value of IT in terms business leaders understand. MIT’s George Westerman details this in his book: “The Real Business of IT.” Westerman’s research shows the current CIO mindset of cost-cutting is rooted in an inability to communicate the business value IT brings to an organization. As a result, IT budgets dominate IT-business conversations, rather than communication around the value the IT organization brings to a company. The genesis of the Technology Business Management (TBM) Council came from recognizing a lack of best practices around fostering these important conversations.
The ability to present to the Board is critically important for CIOs to stay relevant, Douglas Menefee, Cloud CIO Advisor at Amazon Web Services, emphasized on his panel. Menefee also said it’s important for CIOs to seek roles to serve on other Boards (not just their own company’s), to gain a holistic perspective on what drives decisions at that level. TBM Council Board member Mike Dreyer, former CIO of Visa Inc., is a great example of this. Mike sits on the Board of F5 Networks, bringing a valuable technology perspective to the company’s business decisions.
The role of a successful CIO is intrinsically linked to the future of a digital enterprise. Visionary CIOs will rise to the occasion by ensuring they are at the forefront of technology conversations with their Boards.
If my post resonated with you, check out Gartner’s latest report on Aligning IT Costs and Strategies with Business Goals to Remain Relevant Beyond 2020. We will also be continuing these important discussions at our 2014 Technology Business Management Conference in Miami, October 28-30. Earlybird registration is now open, so don’t miss out! I look forward to seeing you there.