How digital innovation has reshaped the role of the CIO
Top-level executives from Ferrovial, News UK and Iglo Group explore how the digitalization of business is casting the CIO as a strategic business leader.
Today’s CIO needs to foster a culture of innovation that can turn the opportunities presented by the digitalization of business and society into real customer value. And according to Alan Mumby, head of the CIO practice at executive search firm Odgers Berndston, that new capability applies as much to digitally driven start-ups as it does to venerable blue chip companies.
The CIO’s role is to champion technology and guide senior management on the potential for digital to dramatically enhance business performance or even take it in new directions, he says. In new CIO recruitment briefs “being able to point to evidence in a career of running innovation programs now often comes up.”
The fostering of a culture of innovation is certainly evident at Ferrovial, the transport infrastructure and construction multinational. Federico Flórez, chief information and innovation officer, says his role is now increasingly customer-facing, with clients — whether an airline using Ferrovial’s Heathrow airport facility or a government agency overseeing its toll road concession — increasingly expecting IT to play an enabling role in service delivery.
In that sense, says Flórez, technology has gone from being a purely back-office function to one that's a core part of any solution offered to customers. That is in stark contrast to a decade ago when the CIO’s role was purely internally focused, he adds.
“I used to spend 100% of my time on internal issues at the company, but now I spend more than 50% of the time working with customers on innovation and new ideas,” says Flórez. And that new focus on innovation creates different management challenges.
Under Flórez, the Madrid-headquartered company has introduced an internal entrepreneurship program that encourages employees to pursue ideas and create internal start-up units, with successful proposals allocated resources, funding and the time to explore opportunities.
However, warns Mumby, such thinking is not universal. Despite the threats and opportunities presented by digitalization there is still scepticism among some senior management on the extent that IT should be driving business innovation. “Many execs still remember the excesses of the 90s when a lot of money was wasted by technology,” Mumby says.
The demystification of IT
That makes communicating the business potential of technology a vital part of the new CIO’s role. According to Chris Taylor, COO at News UK, the London-based publisher of The Sun, Times and Sunday Times newspapers, CIOs need to get out of their IT bubble and communicate to other executives the value technology can have on the whole business.
|Chris Taylor |
Image: The Times/News Syndication
“The CIO must demystify technology and that’s all about communication at all levels in the firm,“ he says. Rather than appearing mysterious, technology needs to be painted as an open, accessible, credible, understandable, consumable thing. “If senior executives approach the conversation thinking technology is a black art there is a risk they won’t see the CIO as a normal person who they can have a normal business conversation with,” says Taylor.
“If you can achieve that you can expect to play a credible role in board-level business discussions,” added Taylor, who was CIO at the company before becoming COO in July 2013.
Indeed, Tania Howarth, COO and board director at Iglo Group, believes that CIOs are already influential in most modern companies because of the pivotal role played by IT infrastructure in running and enhancing the business. There are fewer bigger jobs in the current workplace than CIO, she argues, and this responsibility will become even greater as businesses digitize further.
“The [CIO profession] needs to get over itself. Focusing on roles and worrying about whether or not you get a board position defeats the object of what you are really trying to do. As a CIO, the experience you build as you come up through an organization is much more effective and useful than many other functions,” she says.
The role is now highly strategic, so CIOs are increasingly becoming the leaders of companies, she says. Before taking over as COO of the frozen foods group, Howarth was the company’s CIO and HR director, and was earlier the CIO at Coca-Cola for Europe and Africa.
She believes that, given their experience, many CIOs are destined to take some of the highest positions in the leadership ladder, including that of CEO.
“Where else, other than as CIO, do you get to see the whole business and influence strategy across the whole organization? IT is one of the most complex parts of business strategy to get right, with massive conflicts between the aspiration of technology to grow the business and the huge constraints on cost,” she continues. “A leader in the IT profession has massive amounts of experience that is very relevant to any other [management] job they might go on to do.”
• Alan Mumby, Federico Flórez, Chris Taylor and Tania Howarth were speaking at The Economist CIO Forum in London.