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The Five Characteristics of a New Breed of CIO


Published: 7 October 2013

Analyst(s): Lee Weldon, Heather Colella

A new breed of digitally minded, technology-enabled enterprises will require


a new breed of CIO. Gartner describes five crucial characteristics needed by
CIOs if they are to meet the challenge.

Additional Perspectives and Updates

Midmarket Context: 'The Five Characteristics of a New Breed of CIO' (17 March
2014)

Key Findings

The next 10 years are set to become the first truly digital decade, when digital technology will
move to the forefront of finding new sources of value for the enterprise.

This shift in technology will require a new breed of CIO.

The personal success of CIOs in the coming decade will be heavily influenced by their abilities
to manage the transition to a new role in response to new business expectations, while ensuring
continuity in the management of traditional enterprise IT.

Recommendations

Continue to use technology to optimize operations while developing deeper business


capabilities, enabling the enterprise to access new streams of value and revenue.

Increase your scope of accountability from the IT organization to the entire ecosystem of
technology that is relevant to your enterprise, including consumers, suppliers and partners.

Adopt a different approach to planning, breaking away from fixed routines toward a more
dynamic, hunting and learning approach.

Move away from measuring success based on efficient enterprise operations, and focus instead
on more impactful business outcomes and the value delivered through a more engaged
workforce.

Table of Contents
Analysis.................................................................................................................................................. 2
What Is Driving the Future of the CIO Role?...................................................................................... 3
What Characteristics Are Required for the New Breed of CIO?......................................................... 5
How Can CIOs Determine Where to Begin?................................................................................... 10
Conclusion..................................................................................................................................... 12
Recommended Reading.......................................................................................................................12

List of Tables
Table 1. First Digital Decade Implications for CIOs.................................................................................. 4
Table 2. Each Dimension Is Facing a Fundamental Shift in the Required CIO Capabilities....................... 6
Table 3. CIOs Should Assess Their Level of Experience and Maturity in Each of the Five Dimensions..... 8

List of Figures
Figure 1. Five Changing Dimensions of the New Breed of CIO................................................................5

Analysis
CIOs are facing an unprecedented level of conflicting stakeholder expectations. For the past 10
years, they have been required to focus on cost, control and quality in response to global economic
conditions. Although these remain important, the emphasis is shifting to demand for technology that
is digital, dynamic and diverse, as business leaders look to drive growth over the next 10 years. The
personal success of CIOs in the coming decade will be heavily influenced by their abilities to
manage the transition to a new role in response to new business expectations, while ensuring
continuity in the management of traditional enterprise IT.
Recent Gartner research has described the emergence of four potential futures for IT within the
enterprise, each bringing with it a new set of expectations for CIOs (see "Four Potential Futures for
the IT Organization and Their Implications for the Enterprise: Get Ready for Competitive
Advantage"). As CIOs begin to adapt to these emerging models of IT, their profiles are shifting away
from the traditional role as head of IT. This transition is leading many CIOs toward a new role that is
better described as an "explorer" or "pioneer," where they are expected to focus on creating
competitive advantage through technology-based business innovation (see "The Four Futures of the
CIO Role").
The new set of expectations, coming from a new breed of digitally minded, technology-enabled
enterprises, will require a new breed of CIO. This research will help CIOs take the first step in
evolving to meet the challenge.
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What Is Driving the Future of the CIO Role?


"In many enterprises, the CIO now runs the front office, which means they're no longer the
traditional CIO, but rather a sort of 'chief innovation officer.' Everybody out there who's coming
to the bank, or the airline, or the Fortune 500 investment firm, they actually are interacting with
the CIO and their staff, and the output thereof. They're not interacting, oddly enough, with any
of the stuff that you would normally associate with a CIO, in the sense that that's all hidden.
True, CIOs still run the back office, but it's hidden behind a wall." Dr. Bernard Meyerson, IBM
Fellow, VP Innovation from IBM Research
Over the past decade, CIOs have been measured by their abilities to build a professional (often
centralized), cost efficient and lean IT organization. The dominant themes have been ERP
deployment, application rationalization, infrastructure consolidation, service management and IT
process maturity. Although these activities remain important, they represent only the starting point
or foundation from which CIOs are expected to create business value. They are no longer the end
result for determining the success of a CIO.
The next 10 years are set to become the first truly digital decade, when digital technology will move
to the forefront of finding new sources of value in how individuals interact with each other, how
consumers interact with providers, and how enterprises interact with partner and supplier
technologies (see "The Gartner Travel Guide to the First Digital Decade"). As enterprises rapidly
evolve their mindsets and approach to digital, CIOs will be required to either evolve their own
profiles and skill sets or risk becoming irrelevant.
As the characteristics of the First Digital Decade start to take shape, it becomes clear that they will
place a new set of expectations on the role of the CIO (see Table 1).

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Table 1. First Digital Decade Implications for CIOs


Characteristics of the First Digital Decade

Implications for CIOs

Dynamic: Rapid disruptive technology


innovation, coupled with customer involvement
in the definition, creation and viability of
offerings, sets a dynamic undercurrent in the
enterprise business environment.

In response to high expectations for digital innovation to


drive business growth, CIOs must develop a deeper
understanding of how the business will play and win in
the First Digital Decade.

Diverse: Variance is the source of continuous


value in the First Digital Decade. It is a breeding
ground for new ideas and future value. This is in
stark contrast to the past decade, where
variance was seen as increasing costs a
factor needing management control.

CIOs must develop their abilities to find new ways of


applying technology to create and/or provide access to
new revenue and value streams. This means a shift
away from the traditional CIO focus of standardization
and control, with a move toward more flexible
exploration of technology innovation.

Driven by consumers: Consumers'


engagement determines value. They are willing
to pay a premium for products and services
that help them meet their needs, realize their
ambitions, accomplish their tasks or satisfy
their desire for variety.

CIOs must be prepared to think and act beyond their


traditional, internal scopes. CIOs, like any other senior
business leader, must be business-minded and
consumer-driven, continuously thinking about the value
that is provided to the consumer. It will no longer be
sufficient to consider internal stakeholders as
"customers" of the CIO. Internal stakeholders are
partners in creating consumer value.

Collaborative: Consumers, designers,


fabricators and others an entire ecosystem
of resources form around value opportunities
for fluid and dynamic co-creation.

In the recent past, many enterprises focused on


business integration and expected CIOs to do likewise.
Going forward, the success of the business ecosystem
becomes much more crucial to CIOs. Enabling
collaboration and communication among consumers,
partners and suppliers is where CIOs will be expected
to focus.

Combinatorial: Technology innovation and


uptake are increasing at an exponential rate. A
key contributor to this trend is the way in which
technologies are combined to form platforms
that enable new waves of innovation. For
example, a teenager can create a simple app
today that is used by hundreds of millions
within a few weeks, but only because it is built
on a social platform such as Facebook, which
itself is built on a platform (the Web), which is
also built on a platform (the Internet) and so on.
Additionally, this new wave of creative energy is
being driven by the combination of technology
with the following:

An explosion in accessible information


from the Internet of Things

The exponential rate of innovation means that CIOs no


longer have the luxury of committing to a static, longterm IT strategy. The recent trends of social media and
smart, mobile devices have been purely consumerdriven, and forced most CIOs to react with a desperate
effort to catch up and take advantage. CIOs can't afford
to miss another wave of innovation, and must shift
focus to more exploration and experimentation to
identify the next big opportunity for the business.
Additionally, CIOs can no longer focus only on the
implementation of technology. Creating and accessing
value in the First Digital Decade require a focus on the
combination of technology with information resources,
human capabilities and innovations in the business
itself.

Significant innovation in business models

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Characteristics of the First Digital Decade

Implications for CIOs

A fundamental new mindset toward the


application of technology to augment and
enhance our own human capabilities

Source: Gartner (October 2013)

A new wave of technology and business innovation the first since the e-commerce boom of the
late 1990s drives these characteristics, and will continue to shape the next 10 years. Meeting
these new expectations will require a new breed of CIO.

What Characteristics Are Required for the New Breed of CIO?


As shown in Figure 1, there are five key characteristics that distinguish the new breed of CIO from
its traditional roots.
Figure 1. Five Changing Dimensions of the New Breed of CIO
From Breadth
to Depth

From Efficient
Ways of Working
to Effective
Outcomes

Business
Understanding

Measure of
Success

From Routine to
Dynamic

Planning
Approach

New
Breed
of CIO

Primary
Focus

Scope of
Accountability

From Operations
to Monetization

From IT
Organization to
IT Ecosystem

Source: Gartner (October 2013)

For CIOs to be successful in the First Digital Decade, they must begin making the transition away
from the traditional CIO role, and invest time and attention in developing their capabilities in each of
the five dimensions (see Table 2).

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Table 2. Each Dimension Is Facing a Fundamental Shift in the Required CIO Capabilities
Dimensions
Business
Understanding

Primary Focus

Scope of
Accountability

Traditional CIO

Knowledge gained from


working with business
stakeholders and attending
training courses

Applying technology to enable


productivity and drive
efficiency in operations

Focus on "how we do things"

Measure of
Success

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Depth of understanding of how the


business competes, makes money, and
delivers products and services

Knowledge gained either from working in


a business unit or from special
assignments that have included business
accountability

Combining technology with information


and human capabilities, and applying it
to drive innovation in new customer
touchpoints, new ways of competing
and new revenue streams

Focus on "how we make money"

Managing the IT organization

Building the foundational IT


platform for the enterprise
(such as ERP and CRM)

Orchestrating a complex ecosystem of


customers, distributed IT development,
and technology and business suppliers

Managing discrete enterprise


changes tied to specific IT
deployments

Building a culture of sustainable


enterprise change, with a focus on
exploration and learning

Managing with an outside-in


perspective, focusing on consumer value
and an integrated technology-enabled
business response

A model for strategy that involves


continuous hypothesis formation, risk
assessment and experimentation,
underpinned by long-term planning
methodologies, such as forecasting and
scenario planning

Constant co-creative exploration for


technology disrupters and innovations
that will drive the next business success

Consistently effective realization of


business value

Successful management of business


outcomes enabled by technology

Planning
Approach

Breadth of business
understanding based on basic
knowledge of how the
business operates

New Breed of CIO

Managing with an inside-out


perspective, focusing on IT
toward the business

Creating and maintaining an


annual IT strategy, with
incremental updates year after
year

Cost-efficient performance of
the IT organization in response
to business demand

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Dimensions

Traditional CIO

New Breed of CIO

Successful management of the


daily operations of the IT
department

Source: Gartner (October 2013)

The following table corresponds with "Toolkit: Five Characteristics of a New Breed of CIO," and
provides CIOs with an opportunity to consider their strengths and weaknesses today across each of
the five dimensions of a new breed of CIO. CIOs should select the answers that best represent their
current capabilities, and use the Toolkit to identify where to develop themselves as they face the
challenges of the First Digital Decade.

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Table 3. CIOs Should Assess Their Level of Experience and Maturity in Each of the Five Dimensions
Question

Answer 1

Answer 2

Answer 3

Answer 4

Answer 5

Business Understanding
Where have you
gained your understanding of the
way the business
operates?

From working within


the IT department
and interacting with
business stakeholders

From formal business


training programs, either inside the enterprise (such as management development courses) or externally (such as an
M.B.A. program)

From a temporary role


accountable for delivering a business initiative,
such as an e-commerce
implementation or a digital business transformation

From a full-time business role


(previous or current) with
back-office business accountability, such as HR, finance, operations or process
ownership

From a full-time business role


(previous or current) with profit and loss accountability

Primary Focus
Which business
outcomes are you
most directly involved in delivering?

Focus is on operational efficiency of


the IT organization,
with limited visibility
to the relevant business outcomes

Applying technology
to enable productivity
and drive efficiency in
back-office business
operations

Applying technology to
increase efficiency and
effectiveness of front-office business operations, such as marketing, product development and customer engagement

Applying technology to generate business growth


through innovation in existing
product lines and services

Applying technology to drive


innovation in new customer
touchpoints, new ways of
competing and new revenue
streams

Scope of Accountability
What is the scope
of your leadership
accountability?

The IT engine room,


with responsibility
for the efficient provision of IT infrastructure and operations, as well as
back-office platforms (such as ERP
and data warehouses)

A centralized IT organization, positioned


primarily as a supplier
to the business

A federated IT organization, with solid-line responsibility over some


business units and dotted-line responsibility
over others

A shared global service provider, which includes IT responsibility as well as business capabilities, such as HR
and finance

Orchestrating a complex ecosystem of customers, distributed IT development and


technology suppliers, with responsibility for IT and business process development

Planning Approach
Where do you focus your attention
when planning the

Focused on operational execution,


with little or no strategy in place

Creating and maintaining an IT strategy


that focuses primarily
on how the IT organization contributes to
business success

Creating and maintaining a strategy for information and technology


in the enterprise, rather
than a strategy for the IT
organization

Strategy based on taking advantage of enterprise synergies and coordinated efforts


across technology and business capabilities; strategy
goes beyond process automation, and looks at combin-

Digital business strategy underpinned by forecasting


based on exhaustive hunting
and exploring of potential, future technology disrupters
and innovations that will drive
the next business success;

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Question

Answer 1

Answer 2

Answer 3

use of technology
in the enterprise?

Measure of Success
How is your personal contribution
to the business
measured?

Performance of the
IT organization as a
cost

Performance of the IT
organization as an
enabler

Realized business benefits of key IT programs

Answer 4

Answer 5

ing physical and digital resources in innovative ways to


create new value

strategy iterates rapidly in response to competitive opportunities and threats

Improved performance of relevant operational business


key performance indicators
(KPIs), such as time to market, product quality and employee productivity

Revenue increase, margin increase, customer satisfaction


and strategic transformation,
with a focus on the leading
and lagging indicators of business performance

Source: Gartner (October 2013)

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How Can CIOs Determine Where to Begin?


CIOs are advised to use the Toolkit associated with this research (see "Toolkit: Five Characteristics
of a New Breed of CIO"), which will guide them through the questions listed above and provide
tailored advice based on their own personal levels of maturity in each characteristic.
As a general rule, any Level 1 or Level 2 answer to the questions listed above should take top
priority for development, while Levels 3 and 4 answers show a healthy starting point on the path
toward becoming a new breed of CIO. Any Level 5 result highlights a strong capability for the CIO to
leverage when engaging with stakeholders inside and outside the enterprise.
The guidance below provides advice on actions for CIOs to take when addressing their priority
areas for development.
Business understanding:

Seek out opportunities to take a leadership role in driving a specific business initiative.

Look for opportunities to rotate into a business leadership role ideally, with profit and loss
accountability for a fixed period before returning to the CIO role.

Balance on-the-job business leadership development with business courses, either in person or
online, and pursue an executive M.B.A. degree if the opportunity is available.

Primary focus:

Reserve personal time to proactively engage with senior business leaders on business strategy
and development issues. Cut through the strategic "buzzwords" to get at the heart of the
challenges and opportunities faced by the business.

Pull together a small team of senior IT experts who are creative, business-minded, out-of-thebox thinkers. Work closely with them to generate proposals for business innovation through the
combination of technical and physical assets. Be sure to reserve a small amount of funding for
exploring and testing the proposals.

Scope of accountability:

Evaluate how much of your time is spent between tasks that focus within the IT organization,
and ones that focus on the business and the customer. Target a minimum ratio of 60%
outward-focused tasks to 40% inward-focused.

Empower key members of your IT management team to take a stronger role in leading the IT
organization to free up your time to focus on business initiatives. Limit your involvement with IT
operational issues to the deviations and escalations, rather than the routines.

Build alliances with other business leaders, such as the head of HR and the head of finance, to
jointly deliver business solutions that leverage technology.

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Seek opportunities for yourself and key IT leaders to take leading roles in enterprise change
initiatives.

Planning approach:

Extend your focus beyond creating a strategy for the IT organization to creating a strategy for
using information and technology to drive business success. The question of "What do we do
with information and technology?" becomes much more important for the new breed of CIO
than the question of "How do we develop and manage IT?" This is not to say that a professional
IT organization is no longer important. However, incremental improvements to the way the IT
organization works should be treated as a tactical contribution to the more valued goal of
improving the strategic business use of technology and information.

Focus on creating a clear and consistent long-term vision for the use of technology and
information in the enterprise, one that provides guidelines for the desired direction, but is not
rigidly prescriptive. Then develop an execution plan that relies on creative and volatile tactics
that explore the potential paths of achieving the strategy, and take advantage of innovations in
technology and business models. Regularly review the strategy and execution plan to ensure
that the vision is still valid and that the actions are going in the right direction. This will allow the
strategy to emerge and adapt as new opportunities arise from disruptive innovations.

Measure of success:

Review the IT scorecard and routine management reports. Limit the use of inward-facing, ITinternal metrics that measure "how" the work gets done. Instead, focus the majority of metrics
on the realized business outcomes of the IT organization.

Allocate a dedicated resource to tracking and reporting on the business benefits realization of
all IT investments. Ensure that accountabilities are clear for who will deliver the benefits, and
regularly report on achieved versus planned benefits.

Stop presenting IT cost data on its own. IT costs should always be communicated in relation to
the value delivered by the investment. Additionally, look for opportunities to communicate cost
as an index of business output (for example, IT cost per product sold or IT cost per service
contract).

Work with business stakeholders to identify the key leading and lagging indicators of business
performance that are most relevant from an IT perspective. Gartner's Business Value Model can
provide ideas for where to start these stakeholder discussions (see "The Gartner Business
Value Model: A Framework for Measuring Business Performance"; note: this document has
been archived; some of its content may not reflect current conditions).

Ensure that all personal performance metrics are tied to business outcomes. CIO performance
should be measured in a similar way to any other business leader role.

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Conclusion
The First Digital Decade is emerging at a different pace across different industries, with some
enterprises fully enveloped in the challenge today, while others are only beginning to feel the effect.
However, all CIOs, regardless of their industry or the enterprise maturity, should avoid the mistake
of only watching and waiting. A complacent mindset can be likened to that of a child on the beach
watching the waves hit the shore. Suddenly, a wave comes in faster than expected, and the child
has to scramble to get out of the way, perhaps reacting too late, and ending up cold and startled,
with wet feet. Another wave comes in faster and farther. Though the child sees the waves coming,
each one takes him by surprise as he misjudges the speed.
The waves of technology and business innovation will continue to arrive in every industry further
and faster than expected, creating a new breed of enterprise that will require a new breed of CIO.
To not get caught, CIOs must begin to adjust their focuses, profiles and skills as we enter the First
Digital Decade.

Recommended Reading
Some documents may not be available as part of your current Gartner subscription.
"Toolkit: How to Create a One-Page IT Strategy"
"The Gartner Travel Guide to the First Digital Decade"
"Hunting and Harvesting in a Digital World: The 2013 CIO Agenda"
"Digitalizing the Business"
"The Game Changes in the Front Office"
"The Nexus of Forces: Social, Mobile, Cloud and Information"
"The Internet of Things Is Moving to the Mainstream"
"Four Potential Futures for the IT Organization and Their Implications for the Enterprise: Get Ready
for Competitive Advantage"
"The Four Futures of the CIO Role"
"Field Research Summary: The Changing IT Career"
Torgovnick, K. (23 April 2013). "The Future of Work and Innovation: Robert Gordon and Erik
Brynjolfsson debate at TED2013." Retrieved from blog.ted.com/2013/04/23/the-future-of-work-andinnovation-robert-gordon-and-erik-brynjolfssondebate-at-ted2013.
McGrath, R. (June 2013). "Transient Advantage." Harvard Business Review.

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Schmidt, E. and Cohen, J. (2013). "The New Digital Age: Reshaping the Future of People, Nations
and Business." New York, NY: Alfred A. Knopf.
More on This Topic
This is part of an in-depth collection of research. See the collection:

Transform Your Business With the Nexus of Forces

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