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Becoming a strategic CIO

Strategic CIOs create customer value, improve profit and enhance shareholder value. According to Phil Weinzimer, they jumped through four high hoops to get there.

It's no secret that if CIOs want to stay relevant, their IT organizations need to function as strategic partners to the business. How CIOs achieve that is less clear, and it's one of the reasons Phil Weinzimer decided to write The Strategic CIO: Changing the Dynamics of the Business Enterprise.

Weinzimer, president of Strategere Consulting in Allentown, Pa., set out to answer two questions: Is there a common process CIOs and IT organizations go through to become a strategic asset of the company? What are the business competencies and skills IT personnel need to exhibit in order to be more collaborative?

Through interviews with CIOs, Weinzimer uncovered "four transformations" he said he believes all IT leaders must go through to become a strategic CIO:

  • Phase I: Gain the business' trust by ensuring core IT services are delivered well.
  • Phase II: Focus on business skills so IT employees understand what value the business provides its customers and how it does so.
  • Phase III: Don't wait for requirements documents; be proactive, partner with the business and innovate together.
  • Phase IV: Use the technology strategy to create value for the business. Change the business model of how the company competes.

Weinzimer recently spoke with SearchCIO about what's changed since the book was published, how strategic maturity can be measured and what makes a CIO strategic.

This Q&A has been edited for length and clarity.

What is a strategic CIO? Is it the same thing as an innovative CIO?

Phil WeinzimerPhil Weinzimer

Phil Weinzimer: An innovative CIO is a strategic CIO. A strategic and innovative CIO is one who is very business-focused, and who understands what value technology can play in enabling the development of new products and services that create value for the company. And if you wanted to measure how effective a strategic or innovative CIO is, you could ask: Do they help create customer value? Do they improve margin by improving revenue and/or reducing costs? Do they enhance shareholder wealth?

You've emphasized the importance of not simply talking about process, but measuring progress.

Weinzimer: To answer the two questions [for the book], I created an assessment that measures strategic maturity. When you look at these four transformation phases, in order to measure the maturity, there were two dimensions, and this gets back to CIOs being business-focused. The y-axis is this: What is the business value that IT is providing to the business, as opposed to just enabling technology for technology's sake? The x-axis is this: How efficiently does IT deliver services?

CIOs need to always understand that it's all about business value; they have to figure out how to measure the business value, and then they have to make sure that they deliver the IT services in an efficient manner. The same thing holds true for the business competencies and skills -- there's a way to measure each and capture a set of best practices, so IT organizations can assess themselves against those two dimensions.

When you're measuring your maturity, it isn't so important as to where you are -- it's important as to where you need to be. It's like going to the doctor: Your blood pressure is high. OK, that's a fact. You've got to get it lower. How low should we get it? What are we going to do to get it lower?

So, the focus needs to be on where you want to be, not necessarily on where you are, but you need to know where you are because that's the only way you can figure out what the gaps are to get you to where you need to be.

Back to the four transformations CIOs and their IT organizations have to undergo if they want to be viewed as business partners. You describe the fourth phase like this: 'Leverage technology strategy to innovate new value.' What does that mean?

Weinzimer: In simple terms, the fourth phase is the way CIOs change the business model of how companies compete. So, for example, Rob Carter at FedEx changed the way the various businesses collaborated with one another. Or Filippo Passerini, who recently retired as the group vice president of business services and CIO at Procter & Gamble, changed how business decisions are made internally by developing a strategy around 'digitize, visualize and simulate.' Data analytics are used to render information in meaningful ways, so managers can make decisions without having to go through the rows and columns of data in Excel files and figure out what it means. That's how CIOs change the business model internally.

Externally, the best example that I use is the Build-A-Bear Workshop. Go back a few years, customers walked in, the company didn't know who they were; customers went through all of the stations ... left the store, and that was it. It was a physical experience. 

Dave Finnegan, the CIO at the time, had young children and recognized that kids' brains are wired differently. He said, 'We have to integrate a digital experience for our guests who come through [the store].' ... Now, Build-A-Bear has a website, customers can go online and look at the different animals. When they go to the store, the company knows who they are. When customers go through the process of building a bear, there is a digital interaction. ... Customers still pay the $100-plus, and customers still get an adoption certificate. They go home, and now the customers can interact with a number of Build-A-Bear's video games. So, now, the company can monitor how customers are using its products and services, and they can market to the customer.

Your book came out in 2014. Do CIOs still go through these four phases?

Weinzimer: The model hasn't changed; what has changed is there are more CIOs whose IT organizations are becoming strategic, because companies recognize that, at the core, they are technology companies. It's not only the CIO who understands this -- it's also the CEO and other members of the C-suite.

So, for example, John Bilbrey, the CEO at The Hershey Company, has said, 'We are a technology company that just happens to be in the business of selling chocolate.' The CEO at The Weather Channel basically said the same thing a couple of years ago. ANZ [Australia and New Zealand Banking Group] bank in Australia has hired four distinguished CIOs, Filippo Passerini being one of them, to advise the board once a quarter on technology trends in the industry so that it can determine what it needs to integrate into its banking system from a technology perspective. So, this is happening at the board level.

Does a company's acknowledgement of how important IT is to its success change how quickly a CIO moves through the four phases?

Weinzimer: It all depends. I hear a couple of things from CIOs who I've talked to about their experience in the building trust of the business: Depending on the maturity of the IT organization, the trust can be built quicker. That depends on how broken the infrastructure is. For example, there are CIOs who have taken the role in a company where the previous CIO was a good technologist, but didn't have the strategic vision to move up the curve.

There are other organizations where the boards recognize that the technology is broken and the CIO hasn't done the job he or she should be doing, so they bring in a CIO who is strategic, who then has to first fix the technology. That takes longer than an organization where the core business services are functioning well.

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