Editor's note: The following is a guest post from Partha Iyengar, research VP and fellow at Gartner.
CIOs play a very different role within businesses than they did a decade ago. Today, more CIOs have the ear of the board of directors and belong to a subset of executives who regularly advise the board on business decisions.
In turn, boards expect more from CIOs: CIOs not only lead the charge on digital business, but they also must assume some responsibility for enterprise risk; business model transformation; diversity, equity and inclusion (DEI) and other board-level priorities.
Around half of boards see the CIO as a partner, meaning that the CIO and IT organization regularly collaborate with senior business leaders and provide input to the board, according to the 2022 Gartner View from the Board of Directors Survey.
Yet, to succeed in a highly competitive and rapidly changing digital business environment, CIOs must move beyond partnership to serving as a trusted ally for the board. This means that the CIO takes a leadership role and ownership of digital business issues and serves as a key strategic advisor.
To become a trusted ally, CIOs should consider what the world looks like to boards and CEOs.
Although the end of the pandemic is in sight for some enterprises, supply chain disruptions continue. Boards want to accelerate transformation, but enterprises are fighting one another to acquire and retain digital skills. Nationalism threatens globalization, and environmental, social and governance (ESG) issues are affecting business strategies.
CIOs must consider these factors and more as they step into the next phase of leadership. Here are three steps that CIOs can take in 2022 to up their role and business relationships to become a trusted ally to the board of directors.
Prepare the enterprise to thrive amid uncertainty
Most boards of directors have responded to uncertainty by increasing, not decreasing, their risk appetite.
Boards and CEOs understand that incremental improvements to their business and operating models will not keep the enterprise competitive. As a result, they are becoming more receptive to aggressive ideas than they might have been a few years ago.
CIOs should embrace this attitude and enable the enterprise to treat risk as a business opportunity. Create a board proposal that demonstrates how digital technology can meaningfully improve business performance in the context of the top risks perceived by the board of directors. This may include:
- Long-term economic uncertainty: Demonstrate the possibilities of technology to reinvent business strategy, business capabilities and value streams, such as by developing a real-options strategy to hedge against changing business conditions.
- Digital disruption: Suggest increasing the enterprise’s business composability or implementing an agile business system, which will enable the enterprise to change strategies more easily.
- Loss of markets due to shifts in customer behavior: Focus on improving the digital customer experience or recommend bolder steps, such as embracing machine customers and the programmable economy.
- Cybersecurity threats: Highlight the need to treat cybersecurity as a business risk and the importance of designing cybersecurity into products and systems from the beginning.
Aim to propose a new digitally driven business idea to the board once per quarter that aligns with a risk that is top of mind for the organization.
Facilitate digital acceleration
Digital technology initiatives continue to be a top business priority for boards, especially as they look to accelerate out of the pandemic slump. Facilitating digital acceleration may be the most consequential role CIOs can play for the business.
First, CIOs can drive digital business initiatives by working with the board and CEO to establish budgeting and metrics strategies that better accommodate digital investments. For example, one-third of boards are implementing agile budgeting to support the flexibility that digital business requires.
CIOs can also transform IT into an “orchestrator” of digital initiatives by proposing new digital business opportunities, and then interconnecting the business with various ecosystem partners. Embrace business ownership of technology initiatives by insisting on agile development and fusion teams for initiatives with a direct impact on the enterprise’s financial performance.
Finally, a key component of digital acceleration today is the workforce, which was cited among boards of directors as the second-highest business priority for this year. In many countries, the pandemic reset employees’ expectations for work.
CIOs, in partnership with HR, can play a role in creating a hybrid work environment that will better satisfy workers and address board-level concerns about the digital workforce.
Prioritize social issues
Many boards and CEOs have started to take serious action on ESG and DEI. Boards increasingly see the impacts of these issues on the enterprise and must act, and consequently, CIOs must also think about how they can contribute.
CIOs can serve as a key ally on social issues by supporting the board’s decision making around ESG and DEI through relevant data and metrics tracking.
Incorporate the “voice of society” into enterprise decision making by helping the marketing or communication department track sentiment around ESG and DEI, including the enterprise’s reputation in these areas.
Additionally, make DEI and ESG integral parts of the IT organization’s culture, such as by embracing neurodiversity, creating a workforce that reflects the diversity of customers and combining digital business and sustainability.
CIOs have the knowledge of technology that boards of directors need to design competitive digital business strategies. To share their digital knowledge persuasively, CIOs should strengthen their growing connection with the board of directors by understanding the board’s priorities and taking steps to advance them.