SINGAPORE, 10 JUNE 2009 - A company’s chief executive officer (CEO) relies largely on his board to ensure the company is steered in the right direction. Fundamental mistakes in decision-making could lead to unhappy shareholders, and the CEO’s job may even be on the line, especially in the wake of the current trying economic conditions. The CEO requires a close-knit board united with the sole purpose of doing what's best for the company; and a prudent, business-savvy chief information officer (CIO) is an integral part of this board.
“CEOs judge CIOs on an awful lot of things,” says Andy Rowsell-Jones, vice president, research director, CIO research group, Gartner. “CEOs will ask how effective their CIOs are as corporate executives, because if a project they implement fails, it wastes the enterprise’s money.”
Business Success
According to Rowsell-Jones, CEOs expect their CIOs not just to excel in the technical field, but also to manage other aspects of driving business success. "The implicit assumption about a good CIO is not just that of an application developer or project manager. He also has to manage the politics and complexity of organisational change."
Rowsell-Jones's view on CEOs expecting business-savvy CIOs is shared by Raman Roy, chairman & CEO, Quatrro BPO Solutions. "Giving a CIO membership to the executive council does not resolve everything. Like every other member of the team, it is important that the CIO understands what the company's end game is, what our goals and priorities are, and is able to bring his capabilities to bear," says Roy. "The executive council does not develop new product and service offerings in isolation ad then put it on the lap of IT to find solutions. IT is an equal collaborator in product design and development; it is an equal partner in selling to the customer as part of the sales process."
Nirmal Jain, chairman, India Infoline, is one CEO who believes in having the CIO play a key role in an executive council which shares a synergistic relationship. "Our CIO is an integral part of the management decision-making. We meet a number of times a month, and we keep scanning for new applications that could help us grow," says Jain. "I think what matters is taking people from similar cultural backgrounds. Since we are very down-to-earth, we make it a point to hire like-minded people. You also need to be honest with your people, you need to spend time and make them a part of the team. That chemistry is very important."
Reputation
An important element of the relationship between the CEO and CIO, especially where it concerns project implementation and management, is trust, says Rowsell-Jones. "The CIO has to be prepared to put his political capital on the line; that counts for a lot. Because at the end of the day, that says something very important about the project, because the CIO is prepared to put his personal reputation at risk.
"We're not talking about small projects, for example, dictating users switch the brand of their laptops from Brand A to Brand B, but the bigger, complex ones that affect growth risk, and could have catastrophic consequences should they go wrong—for example, tough decisions such as replacing a bank's existing ERP system with a new one,” continues Rowsell-Jones.
Joey Chang, CEO, AXS Infocomm, is an utmost believer in what he terms ‘trust, chemistry and synergy’, between the CEO, CIO and other members of the board.
“All three elements are essential in any successful company, and trust, especially, is fundamental,” says Chang, who claims the head of IT in his company possesses ‘remarkable acumen with regard to business matters’. “Our board operates on a team culture, where we debate the merits of a new IT rollout. Often, we end up agreeing to disagree.
“A CIO who operates with the interest of the company in mind is what I look for—a corporate analytical animal who takes into consideration investment versus returns, who doesn’t just implement the solution that makes work easier on his technical team,” says Chang. He recalls a time when the head of IT in his company proposed using a non-Microsoft based operating system in the early 2000s, an ‘unheard of move at the time’.
“Agreeing to that move turned out to be the most correct decision I’ve made in my whole life,” says Chang.
A relationship based on mutual understanding between members of the C-suite is also something Jain believes in. “You should not allow any lapses in principles and values,” says Jain. “Trust that is built like that is reciprocal. We have to earn loyalty, that way it sticks.”
Complex ProcessThe CIO who is well-versed solely on the technical front is fast losing relevance, according to Rowsell-Jones. Rather, CEOs seek CIOs who possess an advanced sense of ‘emotional judgment’, especially when rolling out new projects. “CEOs have a complex decision-making process, and rarely does the CEO make the decision himself. He relies on the opinion of his board,” says Rowsell-Jones. “CIOs have to talk as regularly as they can, and sell the benefits of what they do, in addition to merely reporting on the performance of IT in the enterprise.”
