Just How Effective Are You?

Assessing a CIO's value to the business is a tough exercise. A tech chief's effectiveness goes beyond standard metrics like ROI. It means comparing the exec's self-evaluations with the perceptions of his or her executive peers, direct reports, and line-of-business counterparts. InformationWeek's sister publication, Optimize, did just that, with a survey of more than 700 technology and business pros about the effectiveness of the IT chief. And the results: Top tech execs didn't ace this test. The results weren't all bad, however. CIOs scored well across the board in areas such as supporting company-wide business strategy and delivering business value to the company. At a time when demands are great on CIOs to demonstrate the business value of a traditionally cost-inducing department, it's inspiring to see IT execs aligned with those skills. But in aggregate, the research shows that CIOs have a higher perception of their effectiveness than do the execs to whom they report, the staffers who look to them for guidance, and the internal business customers who count on them to produce. It's this misalignment of perceptions that might hamstring an otherwise competent CIO. Total effectiveness is the synthesis of perceptions from all four constituencies of CIOs, CXOs, IT staffers, and LOB managers. In the survey of 188 CIOs and VPs of IT, 288 IT managers and staffers, 131 CXOs, and 72 line-of-business managers, each constituency was asked to rate CIOs in three primary areas: business skills, technology know-how, and interpersonal skills. Respondents also were asked to rate all these things based on their perception of CIOs as a whole, as well as the characteristics of their own company's CIO. Of the CIO respondents, 64% consider themselves effective at creating a customer-centric environment, while only 46% of IT managers and staffers deem them so. Similarly, 72% of the CIOs believe they're effective at understanding process as well as technology, but just 47% of IT managers and staffers agree. IN THE FISHBOWLFew businesspeople would dispute that the CIO is the most scrutinized C-level position in the organization. Their high profile puts them in a fishbowl, opening them up to overevaluation, even criticism, about their every move. That's because every business decision, every purchase, and every customer interaction in a company is facilitated by business technology. No other unit sits at such a nexus. But there's an upside, too: If CIOs are effective, their accomplishments stand out. It's just that with so many people eyeing your every move, there's little room for error. CIOs are more aligned with CXOs and their expectations than they are with their own IT staff or line-of-business management, the survey found. The biggest gap in the scores was between CIOs' expectations of themselves and the expectations of IT staff and LOB managers. That doesn't surprise Gary Light, CTO at Capital Region Health Care. "CIOs have been more confident building relationships with the executive suite than with the rest of the organization," Light says. "Being engaged at the LOB level is still relatively new." "A lot of that could be due to delivery," says Mike O'Dell, CIO at Pacific Coast Companies, a federation of building-products suppliers. "If a line of business is forced to change to different business processes by CXOs or CIOs, the decision is made at a higher level, but [the LOBs] bear the brunt of the effort for delivering."

ROOM TO IMPROVEImproving communication with peers and learning the business--neither of which is a new concept--are still probably the two most important skills CIOs need to improve to ensure their effectiveness. Specifically, the research shows they need to work on inspiring and motivating people and improving negotiation skills: When scoring the effectiveness of such skills for CIOs in general, the average was 54% for motivating people and 72% for negotia- tion skills; but when respondents rated their own CIOs, the average dropped to 46% for motivating people and 57% for negotiation skills. The disconnects that exist in the CIO-effectiveness spectrum don't surprise many IT veterans. Scrutiny of CIOs has picked up recently, says Ron Edwards, a CIO for the past 12 years who's currently at Crete Carrier, a trucking and transportation company. "Only in the last five years or so has the CIO role become hard to define and hard to accomplish," Edwards says. Clarence Bastarache, CIO at EntreCap Financial, a commercial financing company, agrees that the difficulty in measuring CIO effectiveness spawns from the evolution of the role. "As CIOs, we're [now] expected to be a master of all trades, not just a jack of all trades," he says. One of the most distinct data points to emerge from the research shows that CIOs need to spend more time with colleagues. All categories of respondents strongly disagreed with the statement that top tech execs can be effective business leaders without spending more time with CXOs, LOB managers, or customers. INTROSPECTIONCIOs do more self-evaluating than any other executive, according to the survey. "I don't know of any other C-level people who scrutinize themselves among their peers like CIOs do," Bastarache says. Some of it might be just a healthy dose of introspection. "Is part of that because our value is not obvious?" asks Pacific Coast's O'Dell. "Or is it a common characteristic that gets us where we are in the organization--that explicit enjoyment of solving a problem?" The biggest surprise? Nowhere did any of the four groups rate customer centricity high among needed skills for CIOs. Most marks were just above the 50% range, and in some cases, that skill was cited by less than half of the respondents as necessary. Only 10% of CXOs want to see CIOs increase their customer focus. In this age of customer intimacy, that stands out as an anomaly for any executive, particularly one with a direct impact on a company's ability to analyze and service the customer. It doesn't mean that it's a lost skill or one that's losing favor. Says EntreCap's Bastarache: "One way I achieve alignment with the business is by showing that I know how to book a deal or ... perform a title transaction. People thought I was crazy when I'd go handle a teller's job for half an hour, but it's the only way to really learn how technology helps them." So while this research takes another step toward understanding how to measure CIO effectiveness, it doesn't end the debate. All sorts of metrics are needed--from the quantifiable, such as meeting budget goals and sustaining ROI, to less concrete ones that measure effectiveness by comparing perceptions across the business landscape.