Now it’s up to CIOs to seize a seat in the boardroom

Profile picture for user Philip van der Wilt By Philip van der Wilt February 18, 2020
Summary:
What needs to change for CIOs to maximize strategic engagement? ServiceNow's Philip Van Der Wilt discusses the evolution of the CIO

Image of morning sunrise shine on empty boardroom seats

The role of the CIO is evolving fast as many take up leadership of what I and IDC have been calling the ‘Digital Dream Team’. Now it’s time for CIOs to take the next step and secure their seat in the boardroom.

But far too many seem unwilling to grasp the opportunity. In my conversations with other business leaders and our partners and customers, it strikes me that this next step is still very much tentative, or even slipping backwards. The 2019 Harvey Nash/KPMG CIO Survey for example found that the percentage of CIOs sitting on the board has dropped from 71% to 58% in just two years.

What many might think is yesterday’s world of reporting into the CFO and pursuing cost optimization still appears to be the reality of today for many CIOs.

Let me tell you why I believe this needs to change—and fast.

The changing board agenda

IDG’s 2019 State of the CIO survey highlighted how 78% of CIOs said that they are communicating with the board of directors more than ever before, up from 67% in 2018. It’s a positive trend, indicating that CIOs are increasingly engaging in strategic conversations on the future direction of the business.

This shift has undoubtedly been catalysed by the changing board agenda that now firmly includes strategic technology discussions, such as digital transformation and cybersecurity.

CIOs, with their technology acumen, are uniquely positioned to advise and provide guidance on the tech-enabled future of their companies. And, while their role is grounded in technology, it’s clear from the CIOs that I am speaking to that they have a clear vision for the business overall and are actively looking to ensure technology is enabling profitability, growth and competitiveness.

Balancing the conversation about risk

One of the key conversations for any board is risk. It’s also an area where CIOs can make a real contribution, helping C-suite colleagues to better understand and manage risks, as well as facilitate sound decision-making.

Cloud computing is a good example for me to highlight here, and a common point of discussion. At ServiceNow, we were once approached by a CIO of a large Italian bank to help them address the perceived risks associated with cloud computing within the business.

The bank’s board of directors perceived cloud computing only as a risk, not the opportunity that it could be. The CIO has a central role to play here in bringing clarity — bridging the appetite from the IT team to embrace the cloud with the reluctance of the board to embrace a perceived risk. Uniquely placed to understand both the business and IT drivers, CIO can facilitate a balanced conversation that addresses the risks, while pointing to the value that technology can generate in the organisation’s future.

A business partner to the CEO

When I talk to CIOs from a wide range of industries, particularly those reporting into CFOs, they will tell me about their struggles to secure a mandate to deliver innovative, revenue-generating initiatives. They will often talk to other CIOs, see best practice in different sectors and bring fresh new ideas into the business, only to hit the ‘IT cost optimisation’ wall.

However, by aligning with the – increasingly digital – CEO agenda, CIOs can participate in a different type of discussion. It is one that covers strategic investments, new products, markets, differentiation, and how technology can drive additional growth for the business.

In some cases, the strategic investments discussed may even incur new costs, rather than optimise existing ones!

It is precisely this focus on technology-enabled growth, innovation and new business models that can secure the CIO’s seat in the boardroom, so they can leave behind their old tactical, back-office role.

Change starts with CIOs themselves

What needs to change for CIOs to achieve this level of strategic engagement?

It’s all about a shift in perceptions, behaviour and language. And that starts with the CIO themselves.

CIOs need to think of themselves as business enablers and start speaking the language of business, not tech. Focusing on the business from a cross-functional, rather than siloed IT perspective, is particularly important here.

Just as the role of the CFO has undergone dramatic transformation, progressing from a ‘bean counter’ to securing a permanent place on the board, we’re witnessing a similar evolution of the role of the CIO.

While it is following the same trajectory, we’re not quite there yet. But by stepping up and aligning with the CEO and board agendas, CIOs can earn their seat at the table.