IT leaders should aim high within the C-suite
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IT leaders should aim high within the C-suite

Kenny MacIver – February 2014
As the digital revolution continues to sweep through business and society — creating new markets and leaders, and disrupting existing industries — the role of the CIO has only grown in importance. According to Matt Graham-Hyde, head of IT at WPP’s data investment management group Kantar, CIOs need to respond to that upheaval by reinventing the IT function — and, to a large extent, themselves. In his new book, The Essential CIO, he argues that IT leaders need to become the CEOs of their organizations, with a greater focus on revenue generation, client relationships and innovation than merely ‘keeping the lights on.’ He talked to I-CIO about the dramatic changes he’s observing in IT, the journey CIOs are on and how most should feel happy about coexisting with the new powerful forces in IT, the CMO and the CDO.

I-CIO: You call for a reinvention of IT and a repositioning of the role of the CIO. What is driving such fundamental change?

Matt Graham-Hyde: It’s driven partly by the economic cycle and partly by technological change. For a long time IT was trapped in a cost-reduction cycle, but since we started to come out of a period of economic downturn some more enlightened businesses are realizing that a lot of the revenue they lost isn’t coming back, and that a whole bunch of new competitors have started doing things in their markets in a more agile, cheaper and engaging way.

CEOs are under enormous pressure in terms of revenue generation, which leads to a different kind of focus in the business around innovation, developing new products, services and business models. And the IT function needs to be central to the business growth objectives.

The other main driver is technological change itself; the way the megatrends of social, mobile, analytics, cloud, and now machine-to-machine communication and sensors, have come together and how they are affecting business in ways they couldn’t have anticipated. These are the tools of business change, sources of new revenue and business value. As such, they are not just the technological domain of the IT function, but are also of importance and relevance to the CEO, CMO and CDO in particular as levers of growth and differentiation.

Of the technologies you highlight, cloud is perhaps the most important catalyst and enabler of business and technological change. What impact is the model having now and how will that change?

MGH: For me, cloud computing is the foundation piece of the new business technology future. It has already redefined everything we thought about business and technology. Every business needs to become a cloud business and I don’t think you can do that fast enough.

At Kantar, we are trying to make cloud not just a technology model but a business model, to take those characteristics of cloud computing that make it so attractive and disruptive — elasticity, pooled resources, usage-based payment, seemingly infinite scalability, self-service resources — and make them the basis of new business models.

We have a ‘cloud-first’ strategy that is much wider than IT, that is about applying disruptive models around all kinds of new products and services. If you are going to launch a new line of business or a new product [within Kantar], you use a start-up business approach, underpinned by the cloud model and approaches like minimum product definition.

In that dynamic context, how should the role of the CIO evolve?

MGH: First, the CIO is not an endangered species and remains an essential role within an organization. The role may be transitioning, but the potential has never been greater. The impact of technology is such that it will change businesses, markets, consumers and society so fundamentally that it has placed the CIO at the center of change and leadership of that change. The challenge is to evolve the role in these revolutionary times with an even greater breadth of leadership responsibilities throughout the business.

The role is hugely important for the business, but to grasp these new opportunities CIOs need to re-educate themselves. Many companies are going to become technology companies — everything they do is going to become technology-enabled in a way we haven’t seen before. How can that not be anything but a golden opportunity for a CIO to be center stage? But to get there you have to throw away yesterdays mind-set and rethink the role.

I believe the CIO needs to start thinking like a CEO to start to develop CEO-style thinking in the way he or she manages and runs the IT function. The CIO’s role will be to understand the business in far more depth across all the company’s activities. It’s a shift to being revenue-focused and being very closely aligned to the business’s clients’ or external customers’ needs — in other words, to commercialize the IT function.
CroppedMatt-Graham-Hyde

There is a need to run IT like a business not like a technology support function. The CIO must have a strategy for the business based on the impacts of technology, and a plan to articulate, evangelize and convince the executives of the business of those needs. As an IT leader you will need to lead change proactively and not wait for the business to deliver a strategy on a plate for you to respond to — an uncomfortable place to be and potentially well outside the comfort zone of many CIOs.

The CIO will have a good viewpoint across the organization as IT is at the heart of everything businesses do today. So CIOs need to use this to understand and challenge the performance of the business and how it may be improved. If you get up every morning thinking, “I am the CEO of this,” you will start to adopt different behaviors and look for different opportunities and outcomes for your IT business.

So you can do some fantastically exciting stuff, but that also means flawlessly doing all the things that the business expects to be done in the background. It is actually a pretty tough world for the CIO right now. You have all of the pressures of trying to change the landscape of the role and technology’s relationship to the business, but you still have all of the same day-to-day pressures of delivery, of dealing with vendors and of getting stuff to the cloud. So it’s a very tough world. But we have to try to break the link to the legacy; we need to find ways of having the legacy taken care of so the focus can be purely on the future of the business.

Is the much talked about shift of IT budget control from the CIO to the CMO a negative development?

MGH: Absolutely not. I believe the new CIO journey for many begins in the relationship with sales and marketing, the CMO and the customers. The partnership between the CIO and the CMO will be both essential to the business and the technology function. I don't think it is as much as a shift of budget as a shift of focus.

It is absolutely true what [Saleforce.com chief scientist] JP Rangaswami says about IT having gone through “the age of the CFO” up to the mid-80s and then “the age of the COO” up to around 1997; we are now entering ‘the age of the CMO.’ Far from seeing that as a threat, CIOs need to align really closely with the CMOs in their business.

In fact, that can be an enormous help to the CIO’s re-invention of their role. Just ask yourself: who is actually better placed to win funding at the board table right now, the CMO or the CIO?

Does the growth of more digitally driven business mean CIOs should be evolving into chief digital officers (CDOs). Or is a distinct set of capabilities?

MGH: I think many CIOs who take the radical change agenda for their IT function and drive into some of the more uncomfortable places will put themselves in a good position to evolve into a CDO role. A lot will depend on the size and scale of the business as to whether the two functions are needed. In some industries there is a natural progression to being a CDO, or for the CIO role to start looking like a CDO’s role.

Some industries are going to need both just to cover the breadth of all the digital work they are doing. For example, CIOs in FMCG [fast-moving consumer goods] are clearly moving into those roles simply by the force of what is happening in their market. If you look at our business, Kantar — a knowledge-based business with almost 30,000 employees — we have a CDO who, like me, reports to the CEO and we work very closely together because the technology landscape is now just too big for a single role. That said, the majority of CIOs aren’t going to become CDOs.

Is there a danger that the CIO ends up doing the operational ‘keeping the lights’ on activities, while the CDO is focused on the customer-facing end of business technology?

MGH: Without a doubt that could potentially happen, but I think it will be at an individual level. I have seen businesses bringing in a CDO because the CIO isn’t able to fill the emerging technology gap.

With a lot of people I interact with in the IT profession, you can see this struggle to create the future so that it looks like the past. If you start down that road then you will gradually put yourself in a position where you are basically the compliance officer, because that will be the last role left in the infrastructure function once it has all gone to the cloud.

This is why it is so difficult. Like others, I’m having to retrain myself and my thinking, having to accept that all those things that I have been taught for the past 30 years may not apply any more. The same principles may apply, but the way you do it and the way you have to think about it have to be completely different.

• Matt Graham-Hyde is CIO of Kantar, the data investment management group of advertising and PR giant WPP. Responsible for technology strategy and delivering IT to Kantar’s 28,500 employees across 100-plus countries, he was previously CIO at United Business Media and earlier technology director at United Broadcasting & Entertaining. His is the author of The Essential CIO: Why the CIO needs to act like the CEO and tweets at @EssentialCIO.
First published February 2014
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