4 Roles Every CEO Must Play to Create Value from IT

There is no doubt that the CEOs value IT but for their own reasons. Their need for IT is driven by them to comply with regulatory conditions, respond to the mimetic pressures, to keep up with their political performance and to ensure control. I had discussed in one of my earlier blog that a CIO should understand the specific needs of their CEO and fulfill them.

In this blog I am discussing four roles, which every CEO should play to ensure that IT delivers value. Without their active participation through these roles, many valuable resources will not be available to the CIO. I have identified these roles through case studies of various type of organizations.

Many CEOs leave IT to be managed solely by the CIO. No doubt CIO is a key person in the game, who should be capable of building and managing the technology part of IT, leading the agenda on a day to day basis to support business. But CEOs must appreciate the fact that their role in making IT function and deliver value should be much bigger than many normally think it to be.

Here, I would like to discuss 4 roles, which every CEO should play to enhance the organizational capability to leverage IT- setting clear directions, building structural resources, resolving the conflicts and enabling the CIO.

1.      Setting clear directions

The role of a CEO in setting the culture of an organization is well documented in academic research. The CEO provides a broad direction to the organization, creates a strategy to win customers in a competitive market place and builds an organization which can execute the strategy. CEO’s role in setting the broad direction for IT should also be given equal importance. Many CIOs of organizations where IT has provided value shared with me about how their CEOs have created a dream of an organization built on solid IT platform. CEOs normally want their organization to adopt IT on the lines of the best practices they see outside their organization. This role of direction setting should be made little more formal in terms of creating a medium to long term direction for IT, the role which IT should play in the organization and also communicate the same to the key stake holders.

The contents of the direction setting also are important as that defines the core purpose for which IT will be used. The core purpose on one hand creates energy towards reaching there and on the other hand sets limitations in terms of what cannot be done. Hence, not only is setting the directions and communicating it is important, the nature of direction set is also important.

 2.      Building structural resources

CEOs play a vital role in building the structural resources for the CIO to leverage. The structural resources are the institutionalized mechanisms and processes in the organization, both formal and informal, to identify the need for IT, designing a solution and deploying it for use.

Structural resources also include the mechanisms to initiate and manage change, which is a part and parcel of any IT project implementation.

The right structures help drive the appropriate behaviors of those involved. They also clearly state the individual responsibilities and create a sense of accountability. In the absence of such mechanisms, the efforts remain misguided, chaotic, inefficient and ineffective.

Examples of such mechanisms include IT governance structure, steering committees for project evaluation, business solutions team, quarterly management review meetings, monthly operations meet, annual budgeting process etc.

3.      Resolving and containing the conflicts

IT is known to create structural changes by affecting how a task is organised and carried out. This creates anxiety and hence resistance among those responsible for these tasks. IT also creates transparency, not liked by many. And then many a time the way CIO approaches a particular situation and the way CXOs respond (and vice versa) creates anxiety.

All these are sources of conflict among people. CEO plays a key role in intervening (appropriately) when such conflicts happen between business and IT, especially the relationship conflicts, thus keeping the conflicts from becoming dysfunctional. This is a very important role CEOs play in order to keep harmony among the top management team members and create a collaborative environment required for IT success.

4.      Enabling the CIO

Very often talked about in reference to business value of IT is the relationship between a CEO and a CIO. A positive relationship helps the CIO influence the CEO and CEO motivate the CIO. A motivated and empowered CIO is a great factor in the organization’s endeavor to create business value from IT.

What is relevant and applicable for the CEO at the overall organizational level is also relevant and applicable for other CXOs (the CFOs, CMOs, CHROs, SBU leaders etc.) at their functional or business levels. They also play these four roles at their respective levels to enable IT create value. There is however a difference between them and the CEO. They also need to deal with the relationship with the CIO, who more often than not is their peer. Managing a peer level relationship requires a different orientation than what is required for managing a reporting relationship. 

It's only through an active participation and appropriate role enactment by all involved that IT can create value for an organization.