IT Officers

Technological advances over the past two decades have driven constant changes in products, services, processes and even business models, making innovation a key success factor in today’s global economy. These developments have radically transformed the role of the CIO. On top of technical competence, today’s senior IT leaders need to be business-savvy professionals, tailoring solutions for real-world problems.

Companies are now seeking CIOs who can leverage their knowledge of information technology to drive business strategy, innovation and competitive differentiation. To help IT leaders fulfil this strategic role, the CIO Executive Council and Egon Zehnder International have developed the Future-State CIO model, which was recently unveiled to over 300 senior IT decision-makers at the CIO Leadership Conference held on 29 April – 1 May 2007 at Huntington Beach, California.

The Future-State CIO model functions like a mirror that helps CIOs to recognise their weaknesses and work on them by providing a systematic analysis of areas where their performance could be improved. The model breaks the CIO role into three general aspects, reflecting the evolving nature of the CIO:

• The Function Head, focusing on operational excellence
• The Transformational Leader, concentrating on business process transformation and IT-business alignment
• The Business Strategist, driving enterprise strategy and innovation.

While some time should be devoted to each aspect, the model's goal is to help CIOs excel in their role as strategists, the role of future CIOs. The model evaluates executives on Egon Zehnder International’s competency scales, which have sets of behaviours ranked 1 – 7 (with 7 being the highest score) according to their performance level in a range of C-level competencies, as illustrated by the diagram below.

Click on image to enlarge. Property of the CIO Executive Council. For more details about the CIO Executive Council and the Future-State CIO program click here.

Based on these results, the model plots two assessment scores: the overall leadership competency performance of a CIO (the Executive Quotient or EQ) and the organization's readiness to accept an expanded CIO role.

After 40 years of assessing executive talent, Egon Zehnder International chose the competencies used in the model based on their predictive value in identifying top-performing executives. In our experience, and according to our database, these are the behaviours that differentiate good executives from great executives.

How to boost your EQ

CIOs who want to drive business strategy and innovation should focus on developing and leveraging the three competencies that every business strategist needs: Market Knowledge, Strategic Orientation and Commercial Orientation. A closer look at the Market Knowledge competency, for example, separates top CIOs from average performers very clearly.

This competency indicates how well an executive understands the marketplace, including customers, suppliers, competitors and regulators. Level 1 CIOs are doing their basic job. As they move to Level 2, CIOs can describe what the industry is doing and the basic forces of the market, including typical customers and obvious competitors. At the higher levels, CIOs know their market well enough to spot, anticipate and capitalize on trends. The highest performers impact the marketplace by creating new businesses or products through their understanding of technology, customer needs and market trends. This reflects the CIO role’s movement away from being an internal project manager and towards a driver of better business results: lifting one’s gaze from inside to outside.

Unfortunately, six years of accumulated data would suggest that Market Knowledge tends to be a weak spot for CIOs, compared to CEOs. On top of Market Knowledge, CIOs seeking to become all-round business strategists also need to score high in competencies such as Change Leadership, Collaboration and Influence, and Function Expertise.

CIOs versus CEOs

CEOs set the benchmark for performance across all executive competencies. The best CIOs compare favourably to their bosses, and even outperform them in many competencies; but tend to under-perform significantly in areas unique to strategic business leadership. Our competency performance data based on interviews and 360-degree assessments of 25,000 executives reveals five key points:

1.	Outstanding CIOs (those ranked in top 15th percentile) score highest in Results Orientation, Strategic Orientation, Change Leadership and Customer Focus. Seen together: Strategically client-based change leaders.
2.	Outstanding CIOs perform significantly better than average CIOs in all competencies except for People and Organizational Development, where they are equivalent.
3.	People and Organizational Development scores are relatively low for all types of executives assessed, particularly CFOs. We feel this probably reflects the low emphasis on development found throughout senior levels in the past; we also see this as shifting significantly higher across roles, not just for CIOs.
4.	Outstanding CIO scores slightly surpass good CEO scores on most competencies.
5.	Outstanding CEOs - the most well-rounded strategic leaders - perform significantly better than outstanding CIOs only in Market Knowledge and External Customer Focus. In other words, the outstanding CIO and CEO resemble each other far more than they differ.