CXO Accent

The CIO-CEO digital divide

Sivaprasad N V

CIOs are excellent technologists, but they need functional expertise in the marketing and financial domains.

Although the Chief Information Officer’s (CIO) position has gained considerable importance across major industrial sectors, it is interesting that the average number of years an incumbent holds the position is well under two. In the retail sector, it is even shorter. Here, most of the CIOs are not regarded as having necessary business skills to transform technological initiatives into tangible results that are important for core business operations. Though top management of most retail companies regard CIOs to be excellent technologists, they are apprehensive of technology being a prime mover of growth in the future. Let us identify factors leading to the CEO-CIO divide.

The CEO response

Among the major retail companies, CIOs would usually regard the usage of IT as an integral component of doing business. They consider that it is unfair to judge them only on the basis of return on investment. On the other hand, the management or CEO regards that technological initiatives cannot be viewed in a business vacuum and investments need to transform into viable business prospects. The difference in perspectives leads to a rift between the CIO and other players in the top management. It should also be noted that since the CEO is usually responsible to more people including the Board of Directors, he would usually prefer to play it safe if the market situation is unstable. Therefore, even if CIO’s propositions are accepted to be viable business initiatives, a common reason usually attributed by the CEO is, “Hey! What you say is fantastic, but let us wait for the opportune moment to adopt the same in order to minimise risks.”

Communication gap

Most technological initiatives or plans of a CIO usually fail to take off because of ineffective communication of IT-related strategies. This usually happens because the language spoken by a technologist is difficult to comprehend by even the well-educated generalists, investors and top management, particularly in the retail sector. It may also be noted that in the retail sector, there is usually a considerable age difference between the CIO and the rest of the management bigwigs. A CIO usually would not have put in as many years of service than some of his counterparts in the management and therefore needs to put in extra efforts to sell his initiatives to the CEO or the top management. This usually leads to frustration, which further hampers effective communication, and eventually there comes a stage where the CIO is no longer on talking terms with his CEO.

Process management

Adoption of new technologies means altering existing business processes. Since people with functional expertise manage core business processes in the retail sector, new technological initiatives of a CIO infringe upon areas that are otherwise manned by other management bigwigs. This is usually called the Resistance To Change Syndrome. Moreover, an argument that seems most relevant is that operating sophisticated technologies can be difficult for the end-user and ineffective use of technology is worse than not having it at all.

Bridging the divide It is commonly noted that a CIO holds the following arguments against the CEO and the top management.

• The CEO or the CFO do not think that IT is strategic and no amount of persuasion can bring about a change in their thinking.
• IT is often seen as an overhead or a cost centre.
• The CEO and CFO do not understand what IT does nor do they wish to.

It is difficult for a CIO to tackle the situation because the CEO, whom he reports to in the retail sector, will never have occupied the position of a CIO during his career. Moreover, CIOs usually do not even aspire to occupy the position of a CEO of a retail company. As a result of such attitudes, CIOs never see themselves fitting in as good businessmen, let alone anyone else regarding them so. It is therefore important for CIOs to get out of their stereotypical mindset and see themselves as business leaders rather than crib about the whole thing. If one believes that IT is a driver of growth, he should also get himself prepared to take on the wheels and actually drive.

CIOs need functional expertise

It is important to have requisite knowledge of the functional areas of the retail sector. Within large-scale organisations, increasing compartmentalisation of tasks can result in alienation from work. Therefore one is confronted with a generalist vs specialist dichotomy. An effective method to get over dichotomous situations is not to view them as dichotomous at all. Instead, if one views them as a part of a continuum, differences in opinion would reduce considerably. Therefore a middle path would require a CIO to have strong technical skills backed by functional expertise in marketing and finance. The academic fraternity has woken up to this challenge only now and most of the management courses include parts of conventional marketing, finance etc with specialisation in IT. 25 years hence the CEO vs CIO gap will cease to exist and one might see more retail sectors being headed by CEOs, who were earlier CIOs.

CIOs should think beyond

Regardless of the industry, some part of a CIO’s work also involves maintenance of IT infrastructure. When IT infrastructure is huge, CIOs usually confine themselves to their core responsibilities. Most CIOs also take on all the responsibilities themselves and do not delegate tasks effectively. A CIO should focus on delegating more of maintenance responsibilities and devote energies towards finding opportunities to expand business.

Plugging communication gaps

CIOs usually get entrapped into a vicious circle of ineffective communication with the rest of the management. Because they feel that their language is not understood, they usually do no participate in senior management team meetings, which further increases the CEO-CIO gap. Even 10 minutes to articulate their agenda and its business impact during regular meetings would greatly help the cause of the CIO. Also, CIO’s should consciously try to avoid usage of technical jargon. During presentations and the like, the focus should never drift from core business domains.

It becomes rather necessary for a CIO to groom himself as a future CEO by gaining deeper understanding of functional domains. This helps establish a CIO as a strategic contributor. This would also require conscious efforts to change self-perception rather than trying to change others’ perceptions about them. A CIO should effectively balance his tactical responsibilities and strategic initiatives. Retail CIOs are better off than their counterparts in the manufacturing sector because this sector is dynamic and therefore the adoption of technologies is a lot easier. So CIOs wake up, otherwise you will miss the bus.

The author is General Manager, IS, at Café Coffee Day (a division of Amalgamated Bean Coffee Trading).

He can be reached at siva@cafecoffeeday.com