Five CIO Thinking Hats: Which CIO Are You?

By Howard N. Smith

It was Edward De Bono who first coined the term “thinking hats” to highlight the different kinds of creative thought. Similarly, there is no such thing as a cookie-cutter CIO. Whether you are a member of the board or a second-level report to the COO, CFO, or worse, there are five hats you could wear:

CIO as chief infrastructure officer

Responsible for hardware and software assets, this CIO is in charge of perfecting the known IT environment, establishing service levels, and enabling a commodity level of business service while managing costs and security. Risk averse, this CIO works bottom up, literally, from the network. Such a CIO builds out new services only after new technologies have been widely deployed and tested by others. CIOs with this hat are sometimes called IT managers. They can get bogged down in details and typically end up reporting to the CFO. Where this CIO is permitted to control the use of IT, technology is typically understood to be a cost. A business-IT divide develops over time.

CIO as chief improvements officer

This CIO leverages IT for business process renewal and improvement, aiming to raise the game in operational practices. To this CIO, IT is an enabler of change. The objectives include increased business efficiency, higher productivity, greater reliability, reduced resource utilization, lower costs, economies of scale, compliance, eradication of waste, shorter cycle times, quality enhancements, fewer errors, employee satisfaction, increased discipline, tighter coordination, tracking of important events, eradication of duplicate or manual tasks, the flexibility to respond to unexpected events, transparency in operations, and an ability to cope with customization, diversity, complexity, and rising workloads.

These CIOs have a big job. They enjoy close working relationships with business domains and process owners. They take on the responsibility for the integration of business change and IT change, using techniques from the field of business process management. IT development is driven by process models and simulation of process change initiatives. Methodologies such as Six Sigma are leveraged. As a result, business-IT alignment is achieved, and this CIO typically reports to the COO. Another name for this CIO is CPO — chief process officer.

CIO as chief intangibles officer

This CIO focuses on the development of intellectual capital. IT is used to manage knowledge and to facilitate collaboration and community through the enterprise, focused and directed on value-generating activities. IT is used to open the mind and provide a level of amenity access to custom information at the right time, in the right context, and to the appropriate decision makers. A wide variety of collaboration and analysis tools are brought to play. This CIO is sometimes called a CKO — chief knowledge officer. Ontology and taxonomy are major concerns. Such a CIO is likely to outsource the provision of basic IT services or view it as someone else’s responsibility to do that part of the job.

CIO as chief innovation officer

These CIOs manage portfolios of new initiatives. They see IT as an enabler and core component within new products and services, and in new and existing markets for captive and prospective customers. They think top-down in the realm of ideas and align themselves with marketing, business development, and corporate strategy. They work hard to explain and position IT potentialities within all new ventures and next-generation projects. They maintain a strong link to R&D, and continuously dream up new processes by working closely with lead customers.

Such CIOs are somewhat dismissive of quality programs. They regard quality as the pursuit of reliability, productivity, cost cutting, efficiency, and economies of scale. It holds little interest to them and they will regard it as necessary, but someone else’s job — typically, the CPO, COO, or infrastructure officer. To them, there is a clear separation between perfecting known products and services (quality) and creating new value (innovation). They look to the potential of new IT platforms that create a springboard for new products and will appeal to the voice of the customer. Chief innovation officers are sometimes called CINOs.

CIO as chief insights officer

This CIO looks out across the enterprise. From the IT vantage point, they own the entire shebang: infrastructure, intangibles, improvements, and innovations. This includes hardware and software assets, supplier relationships, knowledge repositories, programs of work, and the portfolio of supporting business processes. This CIO is very unlikely to report to the CFO. They are much more likely to report to the CEO or COO. They are sometimes known as the Chief Intelligence (common sense) Officer. If they hold too much power, the company can get bogged down in sterile debates about the value of different hats.

Horses for courses

Different firms place a different emphasis on the different CIO hats. This results in diverse reporting relationships. Smaller firms will combine one or more of the CIO thinking hats in a single person. Larger firms will create multiple roles and define a reporting relationship that makes sense in the context of their industry.

Information-intensive industries will focus on the CKO. Service delivery and process industries will focus on the CPO. Utility and infrastructure intensive industries will focus on the infrastructure officer. Product companies will focus on the CINO. And so on. In the largest firms, the roles may have equal status and work in a CXO community. Figure 1 illustrates three possible topologies. Many more are possible.

Figure 1 – CIO organizational species

By raising his game, the infrastructure CIO aspiring to be a CKO, CPO, or CINO is more likely to become a member of the board. The path to insights officer is not easy.

Make no bones about it: Reporting to a CFO is no fun. Reporting to a COO can be effective, but can leave IT denuded of its power to facilitate the creation of new products and services. Likewise, as CPO, IT can only create change if the CFO shares a passion for value creation and not just cost-cutting. As CKO, the CIO can, if he or she is an inspirational leader, change the entire culture within a firm. As CINO, the CIO can break out of the IT stovepipe and into market and product strategy.

While IT components (hardware, software, etc.) are commoditizing, IT is simultaneously a larger and growing percentage component in products and services in all vertical markets. Far from IT not mattering, IT matters more and more. At the same time, IT is no longer an end to itself. While many CIOs, especially those in infrastructure, find it hard to accept, IT is now only one component within every business service. The CPO might remind us that IT automates and governs every business process that leads to new products and services, but they must also be clear that IT can be managed much like a factor of production, as a machine tool on the factory floor.

Aligning the hats

Internal IT groups and services companies need to pay attention to the emphasis the client organization places on CIO thinking hats, how the different hats are organized, and who they report to.

Unless IT groups align their hats in the relationships they establish with customers, there will always be the possibility of a dysfunctional relationship. If your client places emphasis on CIO as CKO, you better find out why. If your relationship is with a CIO acting primarily as a CPO who reports to a CFO, it shouldn’t take long to work out your priorities. And clearly, if you end up working desk-to-desk with a CIO who is really a CINO and who reports to the CEO, you better look at your innovation credentials.

Equivalent hats should be mirrored between IT groups, business units, and end-user organizations, especially in cases of outsourcing and in the relationship with the retained IT organization. If the retained IT group is led by a CIO with a specific hat, or if that CIO places an emphasis on the relationship with the CKO, CINO, or CPO, find out why.

Pick up the right hat at the right time

Whatever hat you wear as CIO, or aspire to wear, look beyond your immediate customers to their markets. Only in this way can you understand the role IT plays in the products and services your customers wish to bring to their customers and value chain partners. Taking into account the industry you live in, your path to the boardroom may be via the CKO, CPO, or CINO. It’s unlikely to be in infrastructure.

Howard N. Smith is the chief technology officer for CSC’s European Group. He is the author of two books about business processes, Business Process Management: The Third Wave and IT Doesn’t Matter — Business Processes Do.