Peter Hinssen is the CEO of Across, a visiting lecturer at London Business School and a senior industry fellow at UC Irvine's School of Business. Follow him on Twitter @hinssen.
Is the Chief Digital Officer the same as the CIO or the CTO ?
The role of the CIO, the Chief Information Officer, has been debated about as long as the term in itself exists. Rarely before has there been such a misleading description, because in many companies the person assuming the position of CIO was rarely seen as the chief 'Information' Officer. People mostly perceived him as “Top Dog of the Nerd Herd and Boss of all things Bits and Bytes”.
I'm paraphrasing here, but that seems to be the general gest of the sentiments that I'm getting from the business community. I teach a course at London Business School for the Senior Executive Program. Top executives from all over the world spend three weeks in London to learn about the latest findings in the exciting fields of Strategy, Finance, Marketing, Innovation and Leadership. Oh, and in technology. That's where I come in.
When I enter the class room on the first day of my 'Information Technology' course, more often than not, I am greeted in an understated – maybe even proactively bored – manner. Remember, these are top execs leading some of the largest companies in the world. The first thing on my teaching menu is to have them do a simple word association on their feelings about 'IT'. The responses tend to be crude: 'boring', 'complex', 'costly', 'always too late', 'annoying' are some of the kinder ones. And when I mention 'IT departments' I get wonderfully colorful comments such as 'arrogant', 'out of touch with reality', 'language of their own' and - increasingly often - 'hopelessly out of date'.
CIO's have lost the edge
The tension between 'business' and IT has been around forever, but instead of getting better, it has gotten worse in the last couple of years. The reason is that digital has become ’normality’, and almost everyone now feels at ease with digital technology. In other words, the natural knowledge advantage of the IT department has eroded. To put it bluntly, since everyone and their dog started carrying around iPads, the IT department really lost their advantage on the 'frontier of technology'.
I think the CIO is greatly to blame for this. In many companies the CIOs never fulfilled their roles as such and rather persisted in performing the more comfortable job of Chief Technology Officer (CTO). The reason being that the most of these people had been running IT before it was even called IT. The origins of IT date from the 'Electronic Data Processing' age when companies had units processing vast amounts of (financial) data. Many IT departments seem stuck in their role as 'suppliers of technology'. Very few have really stepped up to what the CIO job description is really all about: having a solid impact on how companies are dealing with information.
Many so-called CIO's limited themselves to supplying their colleagues with copies of Microsoft Office on laptops, and ever so kindly offered them SharePoint servers to store their documents. But very few had a solid influence on how companies deal with content, build up knowledge, and how they could innovate with information. Many CIO's provided their employees with cell-phones, then Blackberries, and - when it became impossible to postpone the inevitable - with iPhones and other Smartphones. They gave the gift of nomad hardware and software – secured it - and that was it, basically. Making sure that their organizations could benefit from the endless possibilities of the mobile revolution seemed one bridge to far for most.
That's why the CIO rarely had a real seat at the executive management table. And why most still reported to other more powerful executives, often the CFO. Chris Anderson, the chief editor of Wired, once said that 'CIO's have become the dead weight in an organization that keeps the real (technology) innovators from taking matters into their own hands'. Ouch.
The rise of the Chief Digital Officer
But recently, we've seen the rise of a new breed of CXO: the 'CDO' or Chief Digital Officer. Who is that dashing corporate person that deals with all things digital and social ? Why, it's the CDO ! Who is that person that tackles the strategic questions on Big Data and Analytics Innovation? Why, it's the CDO ! This next gen IT hero is the one who really understands digital as a means of innovating the company. His daring mission is to transform the business model of the company. The CDO does not implement technology, no, he implements technology enabled innovation.
This brings a fundamental question to mind: are the CIO, the CTO and the CDO the same person, or are they profoundly different? Are we talking Clark Kent/Superman here?
Over the last five years, I've collaborated with hundreds of CIO's all around the world, understanding where they are heading and what they are focusing on. The general sentiment seems to be that many CIO's today absolutely want to take up that new corporate superstar function of Chief Digital Officer. Unfortunately, most have two humongous obstacles in front of them.
The challenges for the CIO
The first is that many CIO's today lack the right talent in their IT departments to boost their relevance in the digital space. Sure, their divisions are swarming with people who understand infrastructure, servers, and neat systems such as Exchange or SAP. But rarely do they have the digital skills on board that matter today: social networking skills, Big Data analytics experience, digital communications knowledge, conversation management savvy-ness, etc.
The second issue for CIOs wanting to become CDOs is that they are rarely perceived by their business counterparts as 'credible'. The reason is that many of the digital opportunities require a deep insight into the business challenges and the CIO’s environment often doubts if they have the goods to back this up. That’s partly because CIOs are still struggling with past ‘criminal’ records’ starring complex and very painful 'IT projects from hell'. Safe to say that their reputations are often dented and reliability and respect are not the first things that come to mind when thinking about them.
Therefore, we see that many Chief Digital Officers in companies do NOT have an IT background. They come from such well-reputed corporate regions as marketing, business development, or sales. From anywhere but IT, actually.
Batman or Robin ?
And there you have it: many organizations now have an IT department filled with 'digital skills from the olden days’ run by the CIO as well as a 'digital' division with 'new digital' talent lead by the CDOs. Who are often more than two decades younger than the CIOs.
I honestly believe that clever organizations will find a way to reconcile the two. Because what happens in the 'new' digital field in terms of customer innovation will have to be connected and integrated at one point with the 'old' digital back-office of the company.
However, the CIO will need to undergo a huge shift in responsibility to assume that role. Time for the CIO to decide if they want to be Batman or Robin. This is the time to separate the boys from the men. I also believe it will require a complete makeover of the IT department to make this work. And it will finally mean that the CIO will have to step up to the plate and at long last truly assume the role of Chief 'Information' Officer.
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