DUP - 2016 2017 CIO Survey PDF

Navigating legacy: Charting the course to business value
Chapter 1: Nature
versus nurture
I
N this year’s research we set out to answer this 10 IT capabilities and 12 leadership competencies
question: How much control do CIOs have that CIOs develop and cultivate as leaders, such
in creating a lasting legacy? According to our as the ability to articulate a technology vision and
research, the answer is, a considerable amount. strategy, attract and retain talent, and maintain a
While many people regularly attribute a leader’s high-performing culture (figure 1).
success to inherent personality traits that he
We started with the hypothesis that both nature
or she possesses, our survey findings suggest
and nurture contribute equally to a CIO’s success.
otherwise. In fact, for CIOs surveyed, inherent
We assumed that CIOs in all three legacy patterns
traits and personal style appear to matter much
employed a combination of personal attributes
less than the capabilities that they instill in their IT
and IT capabilities to deliver on their mandate
organizations—capabilities that can be delivered by
successfully. Our goal was to identify the nature and
CIOs of all personality types.
nurture attributes that differentiated CIOs across
To reach this conclusion, we surveyed or industries, geographies, organization size, and CIO
interviewed 1,217 global CIOs, a process that helped legacy patterns.
us understand how much a CIO’s ability to create
value for the business can be credited to “nature”—
inherent personality and work-style attributes— Nature: Personality
versus “nurture”—the IT organization’s capabilities is not destiny
and the leadership competencies that the CIO
builds on the job. To our surprise, we found remarkable consistency
among the 20 nature attributes that we examined.
To look at nature, we identified 20 personality The distribution of these attributes did not vary
attributes—such as how a CIO makes decisions, much by organization size, industry, or geography.
works with others, and tolerates risk—that enabled Perhaps most importantly, the three legacy pattern
us to pinpoint how and where CIOs differed by their groups—trusted operators, change instigators, and
legacy pattern. To look at nurture, we focused on
4
2016–2017 global CIO survey
Figure 1. How we analyzed nature vs. nurture
Nature
PERSONAL STYLE ATTRIBUTES Expressive EMOTION Contained
Not knowing ANSWERS Knowing Direct COMMUNICATION Diplomatic
Competition ATMOSPHERE Harmony Outgoing INTERACTION Quiet
Avoidant VIEW TOWARD RISK Tolerant Big picture OUTLOOK Details
Numbers EXPRESSION Words Realistic APPROACH Creative
WORKING STYLE ATTRIBUTES Tolerates CONFRONTATION Avoids
Takes charge GROUP SETTING Team player Deliberate DECISIONS Quick
Structured MEETINGS Brainstorm Adapts easily NEW ENVIRONMENTS Takes time
Essential CONSENSUS Nonessential Cutting edge NEW TECHNOLOGY Slow to adopt
ro essionals COLLEAGUES Friends Objective WORKING WITH OTHERS Emotions
Fluid WORK STYLE Mechanical Outgoing NEW PEOPLE Quiet
Nurture
IT CAPABILITIES Execution
Strategic alignment Innovation and disruption
Vision and strategy Governance and compliance
Talent and culture Risk and security
Technology and architecture Ecosystems and partners
Analytics and insight
LEADERSHIP COMPETENCIES Technology vision
Communication n en e internal stake ol ers
omm ni ate nan ial im a t o T Operations and execution
Deliver technology initiatives Leverage external partners
on i t resol tion Attract and retain talent
lt re o i er orman e om re ension o markets
ork or e ro ti ity
Refer to the appendix, questions 7, 8, 9, 10, 22, and 23.

Graphic: Deloitte University Press | dupress.deloitte.com
5
business co-creators—all reported having similar Figure 2. CIO personality traits and
personality traits. working styles
The happy conclusion: CIOs’ ability to create

value is not limited by inherent, personality-based
attributes. Instead, CIOs can position themselves
to succeed by building the IT capabilities and skills
required to adapt and respond to business needs CIO “nature” 90% adapt
attributes easily to new
within their organizations. environments
SEVENTY-FIVE PERCENT OF CIOS

SHARE THE TOP SEVEN TRAITS
Globally, CIOs as a group are surprisingly similar in

many of their personality traits and working styles 81% focus on
(figure 2). Some of the top seven traits among CIOs the objective rather
than emotion 81% are early
may seem counterintuitive if one views the CIO when working technology
simply as a technology steward. But, above and with others adopters
beyond their role as IT leader, CIOs are business
leaders, and all seven traits are important in helping
them succeed in their business leadership role. For
example, given their responsibility for managing
cyber risk, privacy, and security, one might expect
CIOs’ collective risk tolerance to be low—however,
comfort with risk is often viewed as essential to
78% take 76% think
drive innovation. CIOs as a group also demonstrate charge big picture
a tendency to be rational rather than emotional,
with 81 percent of CIOs stating that they are more
focused on objectives than on emotions in their
interactions—an important trait that can help them
stay focused on business objectives.
Overall, none of the personality traits most common

to the CIOs in this year’s survey are truly unexpected. 75% tolerate 75% are
However, our findings suggest that the role of confrontation risk tolerant
the CIO fundamentally requires a specific type of
executive leader to meet its dynamic requirements.
Refer to the appendix, questions 7 and 8.
PATTERN TYPES MATTER, N=1,175. Source: Deloitte 2016–2017 CIO survey.
PERSONALITY DOESN’T Deloitte University Press | dupress.deloitte.com
We originally assumed that certain personality

other two groups. We also posited that business
attributes would be aligned to the specific ways
co-creators would be more focused on the bigger
in which CIOs drive value for organizations—that
picture than those in the other two groups. However,
is, that CIOs within each of the three CIO legacy
our analysis found that only 3 of the 20 personality
patterns would display a distinctive set of personal
attributes—emotion, outlook, and interaction—
attributes. For example, we hypothesized that
were statistically different across the three CIO
trusted operators would be less likely to be outgoing
patterns (figure 3), and even those three did not
and more likely to be risk-averse than those in the
result in wide differences.
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Figure 3. CIOs can drive value regardless of personal nature

We asked CIOs to select their personality traits and working styles across 20 attributes on a 4-point
scale; we found not only minimal variance between pattern types, but also that all CIOs tend to land in
the middle of the spectrum. This suggests nature does not determine a CIO’s pattern, and all patterns
can deliver value appropriately through nurture—relying on experience and adaptation to respond to
business priorities and expectations.
Trusted operator Change instigator Business co-creator Mean Standard deviation
attern ifferen e
Nature
PERSONAL STYLE ATTRIBUTES OVERALL Expressive EMOTION* Contained
Not knowing ANSWERS Knowing Direct COMMUNICATION Diplomatic
Competition ATMOSPHERE Harmony Outgoing INTERACTION* Quiet
Avoidant VIEW TOWARD RISK Tolerant Big picture OUTLOOK* Details
Numbers EXPRESSION Words Realistic APPROACH Creative
WORKING STYLE ATTRIBUTES OVERALL Tolerates CONFRONTATION Avoids
Takes charge GROUP SETTING Team player Deliberate DECISIONS Quick
Structured MEETINGS Brainstorm Adapts easily NEW ENVIRONMENTS Takes time
Essential CONSENSUS Nonessential Cutting edge NEW TECHNOLOGY Slow to adopt
Professionals COLLEAGUES Friends Objective WORKING WITH OTHERS Emotions
Fluid WORK STYLE Mechanical Outgoing NEW PEOPLE Quiet
N=1,175. Source: Deloitte 2016–2017 CIO survey. Deloitte University Press | dupress.deloitte.com
7
tended to differ from other CxOs in their greater

DELOITTE’S EXECUTIVE LABS tolerance of ambiguity, degree of competitiveness,
The Deloitte Greenhouse hosts labs for client and ability to think visually. Conversely, compared
executives, their teams, or mixed groups with other CxOs, CIOs were less relationship-
that want to step outside business as usual oriented, personable, contemplative, and deliberate.
to tackle complex challenges. Designed Perhaps within a rapidly changing business and
according to principles of group dynamics, technology landscape, many CIOs do not have the
environmental psychology, and innovation
liberty to be contemplative or deliberate. But one
theory, the Greenhouse engages people
significant conclusion is that CIOs need to focus
intellectually, physically, and emotionally so
more on building, maintaining, and nurturing
they can take problem-solving to a new level.
Deloitte’s lab experiences address the unique relationships. Attention to this possible blind spot
challenges facing executives, especially those may help CIOs in building stronger credibility as
in transition, and enable them to gain traction. leaders (figure 4).
The Executive Lab is a one-day experience
built to ensure executives hit the ground
running and thrive in a new role or tackle a Nurture: CIOs can shape
transformation. The agenda focuses on the their own legacy
three most important resources an executive
must manage: time, talent, and relationships. We asked CIOs about the capabilities—people,
Learn more on our home page. processes, and technologies—they build within
their IT organizations to drive business value. We
found the IT capabilities that CIOs build are a
CIOS’ PERSONALITIES DIFFER much bigger differentiator than personality traits
FROM THOSE OF OTHER CXOS in shaping a CIO’s legacy. When asked to select the
five IT capabilities most essential to their success,
Using similar personality profile data collected from
there was significant agreement among the CIOs
more than 558 participants in Deloitte executive
surveyed (figure 5).
transition and team labs (see sidebar, “Deloitte’s
executive labs”), we found that a majority of We also asked CIOs to assess the leadership
individuals in every C-suite position shares similar competencies required to build and execute on
traits: outgoing, detail-averse, spontaneous, risk- these specific capabilities (figure 1). As we looked
tolerant, adaptable, and decisive. However, CIOs deeper at CIO competencies, we found there is
Figure 4. Compared to CxOs...
CIOs are more: CIOs are less:

Technical Contemplative
Tech-savvy Relationship-oriented
Visual Risk averse
Ambiguity-tolerant Deliberate
Competitive
Sample is composed of 2,958 professionals and 558 CxOs. The sample is relatively balanced across genders, industries, and organizational
levels and has been collected through Deloitte transition or team labs as part of Business Chemistry assessments.
Source: Deloitte 2016–2017 CIO survey. Deloitte University Press | dupress.deloitte.com
8
Figure 5. To e T a a ilities essential to s ess
Trusted operator Change instigator Business co-creator
71%
70%
Strate i ali nment
75%
56%
47%
Execution
44%
46%
48%
Vision and strategy
46%
40%
37%
nno ation an isr tion
50%
42%
42%
Talent an lt re
41%
Refer to the appendix, question 22.
N=1,123. Source: Deloitte 2016–2017 CIO survey. eloitte ni ersity ress | ress eloitte om
a misalignment among CIOs’ current strengths strategy and performance goals. About three out
and the IT capabilities they should develop. The of four CIOs said this capability was essential to
upside is CIOs are not bound by their personality or their success, including the CIO of a large US re-
working-style attributes, but are free to shape their tailer, who told us, “The difference between good
own legacy—and to do so, they must be adaptive and bad IT organizations is business alignment.”
in the face of evolving business expectations. Strategic alignment is not just about respond-
According to the senior vice president and CIO of ing to business requests—this capability enables
a large national financial services company, “As CIOs to proactively come up with solutions to
a CIO, you really need to be accepting of change— address business challenges. Given the number
even embrace change—because I think that’s what of respondents that selected strategic alignment
the role is all about.” as a critical capability, we anticipated CIOs to
have built leading-class processes around this
CIOS AGREE ON THE TOP FIVE capability. However, we found that only 5 per-
ESSENTIAL IT CAPABILITIES cent of respondents who selected it as essential
actually felt that it was a leading-class capability
As we looked at the IT capabilities that CIOs selected within their IT organization.
as essential to their success, we found surprisingly
little variation in the capabilities that each of the • Execution. Given the expectation that CIOs
three pattern types thought contributed most to a must execute on technology projects that deliver
CIO’s success. business solutions to drive performance and re-
duce costs, it’s no surprise that about one-half of
• Strategic alignment. Overwhelmingly, the CIOs selected execution as a top capability. CIOs
top IT capability selected by respondents was are more likely to establish credibility within the
the capacity to align IT activities to business
9
sion does not have to be complex or expansive; it
“I call it win with the basics.

can be a simple expression of intent that serves
as a rallying cry for the IT organization and a
Let’s be really good at those clear articulation of IT’s role. Technology vi-
sion must evolve, however, as an organization’s
things that are repeatable business strategy, competitive landscape, and
capabilities change.
and predictable, including
• Fostering innovation and disruption.
executing strategic projects.” Technology—and therefore the CIO—is at the
heart of most business innovations and disrup-
— Johnson Lai, CIO, NuVasive, Inc.
tions. Recognizing this, 47 percent of participat-
ing CIOs selected “fostering innovation and dis-
organization when they have a strong track re- ruption” as a capability essential to their success.
cord of delivering a reliable, consistent, scalable, However, the directive for innovation frequently
and secure IT environment. While 55 percent of comes from the business leaders without clear
respondents selected execution as a key IT ca- expectations attached. Innovation is not only a
pability to build, only 21 percent acknowledged key capability CIOs need to build, but also one
they actually are in the process of building core in which they need to play a leading role. CIOs
IT capabilities around project execution and so- are uniquely positioned to drive technology-led
lution delivery. Fortunately, 46 percent of the innovation and define new approaches to drive
CIOs surveyed who selected execution as an IT value to the business and customers. However,
capability essential to their personal success a significant number of CIOs (43 percent) ac-
also recognized the importance of building an knowledged that this essential capability either
IT culture focused on execution, delivery, and currently does not exist or is still in the process
operational excellence. of being built within their IT organizations.
• Vision and strategy. Nearly 50 percent of our

CIO respondents said “developing a vision and
strategy” was an essential capability; however,
one out of three reported it as an IT capability
“Think about the journey—be
that does not currently exist within their orga- purposeful and pick a realistic
nization. As CIOs develop a vision and strategy,
it is important to set clear and unambiguous
time frame to transform.”
goals for delivering business value and clearly — James McGlennon, executive vice
articulating how to achieve those goals. The vi- president and CIO, Liberty Mutual
“My role as CIO is more like 60 • Talent and culture. This year, 45 percent of
CIOs identified engaging, motivating, and ac-
percent business and 40 percent quiring talent as essential for success. In our
technology. The footprint of IT interviews, many CIOs talked about their talent
challenges: years of reinforcing mediocrity as
and business is blurring; this is a the expectation, a hesitation to make the tough
calls, the inability to secure the right talent to
very positive thing.” build the right capabilities—all which may lead
— Paul Rushton, CIO, IMI to a suboptimal IT culture. We found that many
CIOs we spoke to are actively looking for ways to
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“Spend a lot less time on technology. Spend a lot more time on

people. Earnestly engage and involve them. If they feel like they are
part of the solution or part of the answer, they seem to produce.
They’re happier and it all falls into place.”
— Kurt Thaus, senior vice president and CIO, Telephone & Data Systems, Inc.
Figure 6. IT capabilities gaps

shape and sometimes even transform their cul-
tures because they realize that to keep high per-
Size of the circle 100%
formers, their culture has to support, encourage,
represents the
and engage those professionals. They also recog- percentage of all 50%
nized the need to shift IT culture focus on meet- CIOs that viewed
each capability
ing the needs of the business. Developing an IT
as essential to
culture where talent understands business driv- their success
ers, customer expectations, and external market
Capability currently being built or does not exist
was selected by 51 percent of CIOs in our survey.
The good news is that CIOs of any pattern type are

78%
able to drive success through these IT capabilities— Strategic
all firmly on the nurture side of the equation—by alignment 20%
building the right team and setting a strategic

technology vision. The not-so good news is that
CIOs have some more work to do in building IT
capabilities within their organizations—specifically Execution 55%
when it comes to innovation and talent (figure 6). 21%
We also found differences in how CIOs of different

pattern types assessed their organization’s core IT
capabilities. For example, we found that change Vision and 50%
instigators placed more importance on “engaging strategy
29%
with ecosystem partners” than the other two
pattern types. Interestingly, “engaging with
ecosystem partners” was ranked the least important
IT capability by CIOs overall. We will explore the Innovation 47%
capabilities that define each pattern type in detail and disruption
in chapter 3 as we look at how CIOs navigate the 43%
journey between pattern types.
Talent and
CIOS’ BIGGEST COMPETENCY GAPS culture
45%
ALIGN WITH THE MOST IMPORTANT
37%
CAPABILITIES
We also asked CIOs to assess their personal Refer to the appendix, questions 22 and 23.
strength in leadership competencies. By leadership Q22: N=1,123; Q23: N=1,097. Source: Deloitte 2016–2017
CIO survey.
competencies, we refer to the specific skills a
Deloitte University Press | dupress.deloitte.com
11
Astonishingly, all three of these competencies are
“Adaptability is really essential to building the top five capabilities that

CIOs identified as needed for success. The good
important. Self-confidence is news here is these skills are developable, and are
typically learned through time and experience. CIOs
really important....Everyone play a pivotal role in influencing the overall culture
and motivating their teams to align IT capabilities
understands the importance of to business priorities; they can often in fact be the
technology now, so you don’t catalyst for driving cultural change within their IT
organizations. When discussing how CIOs can lead
need to argue your case. You change and influence IT culture, a CIO from a large
retail company rightly stated, “It’s a lot of little day-
need to have confidence, and to-day things that will set the tone, influence people,
you need to adapt to change.” and make the change. There are lots of big words
used in big transformations, but to drive change,
— Mike McNamara, executive vice president, you need to do the little things to set examples with
CIO, CDO, Target Corporation your team and reinforce the fact that you will be
measured.”
CIO brings to the table to successfully cultivate

IT capabilities, such as influencing internal The bottom line: Successful
stakeholders and communicating effectively. These
skills enable a CIO to build an IT organization
CIOs shift and adjust to
that drives high performance, business value, and the need
overall success.
In our interviews, when we asked CIOs to identify
When assessing their own leadership competencies their top five leadership competencies, many
compared to what a successful technology leader CIOs had a hard time answering the question. We
ideally needs, CIOs exhibited gaps in several commonly heard answers like “it depends on the
areas, most significantly in influencing internal business need” or “it’s hard for me to pick from
stakeholders, attracting and retaining talent, and this list, because you need all of these strengths
steering the technology vision (figure 7). to succeed as a CIO.” We believe that this reflects
Figure 7. Current vs. ideal strengths
CIOs that identify skill as a current strength CIOs that identify skill as an ideal characteristic
n en in internal
stakeholders 47% 64%
Attracting and
retaining talent 35% 48%
Technology
vision 61% 71%
0 100%
Q9: N=1,161; Q10: N=1,097. Source: Deloitte 2016–2017 CIO survey. Deloitte University Press | dupress.deloitte.com
12
the ability of successful CIOs to use experience and CIOs are able to switch between CIO legacy patterns
invest in personal development to adjust their style as business needs change. Our findings imply that
based on business context. CIOs are able to drive success through nurture: by
developing the right competencies, building the
This was an encouraging conclusion for us. It
right team, and setting a strategic technology vision.
follows the findings in our data—that an individual’s
CIOs are better positioned than they may realize to
personality is not a barrier to succeeding in the CIO
navigate between patterns as business needs evolve
role—and further validates our belief that savvy
and change.
13
Chapter 2: Aligning IT
capabilities to business value
S
O far, we have learned that CIOs have the specific emphasis and focus on each of these may
power to drive value to their business through vary by individual business context, to improve
building IT capabilities and flexing leadership business value, CIOs should build IT capabilities
competencies. And, as we’ve noted, their legacy is that support business priorities.
largely a function of the value they create for the
We often see a mismatch between business priorities
business. But just how does a CIO create business
and the CIO mandate because CIOs are lagging
value? CIOs create value by delivering IT
in building the appropriate IT capability. Adding
capabilities that are in tune with business
an additional layer of complexity, business needs
priorities. Our data shows that CIOs agreed on
and priorities shift over time, and CIOs must be
top five business priorities (figure 8). While the
“CIOs can either wait for our business leaders to become technology
experts and figure out how to apply it in their lines of business, or we
can step in and drive forward-thinking dialogue and bring our best
ideas to the table. A key responsibility for me and my senior team is to
focus on building and strengthening relationships with C-suite peers
to better understand key business processes and drive thinking about
how technology drives the impact.”
— Steve Betts, senior vice president and CIO, Health Care Service Corporation
14
Figure 8. Top business priorities
Customers 57%
Growth 49%
Performance 48%
Cost 40%
Innovation 35%
Regulations 17%
Talent 15%
Cybersecurity 10%
e on ration 9%
Other 2%
equipped to handle these shifts. In this chapter, we innovation, while IT capabilities are still lagging in
explore how CIOs are steering their course among these areas, which is where CIOs can play a critical
business priorities. We look specifically at areas role. Yet the business expectations for CIOs still
where opportunities exist to bridge gaps between focus on maintenance, efficiency, cybersecurity, and
business expectations and IT capabilities. business process improvement.
While business priorities may not always need to

Bridging the gaps: IT translate directly into IT activities, the data suggest
expectations and capabilities that business leaders today are relying on IT to take
on considerable responsibility for enabling revenue
As business priorities shift and technology becomes growth in addition to managing operational
ubiquitous in business operations, the expectations performance, cost reduction, and cybersecurity—
of IT to deliver on those priorities also significantly but that CIOs may not be aligning IT capabilities to
increases. Tim Glinatsis, CIO of General Dynamics business priorities.
subsidiary Bath Iron Works, hit the nail on the head
Many CIOs, in fact, may be overinvesting in certain
when articulating his advice for other CIOs, “If you
capabilities without understanding the dynamics
are not listening very carefully and don’t have your
of the company and factors driving investments
ears planted all over the business, you will miss what
in those IT capabilities. We view this as a huge
the changes are and you end up being irrelevant.
opportunity for CIOs to drive strategic alignment
You have to learn how to speak business so you can
through the IT capabilities they deliver. In order to
understand it and then listen for it.” Our survey
do so, CIOs need to ensure they are “in the know”
data show that the business expectations of IT, IT
and have a structured way of capturing what really
capabilities, and business priorities are out of sync
matters when it comes to business priorities. As
in several areas (figure 9). As mentioned earlier,
CIO Bennie Peek of Bell Helicopter told us, “Setting
business priorities are focused on customers and
up a governance structure where there is a way to
15
Figure 9. Aligning the gaps: Business expectations vs. IT capabilities
Capability is a business expectation of IT Capability is currently leading or excellent in their IT org
Capability is essential to success Gap between expectation and current capability
Improving Reducing cost Maintaining Managing Business

business and driving IT systems cybersecurity innovation
processes e ien y
80%
Essential
Expectation
Expectation Expectation
60% Expectation
Expectation
Essential
40%
Essential Essential Essential
Capability
Capability
Capability Capability
20%
Capability
0%
Refer to the appendix, questions 4, 22, and 23.
Q4: N=1,150; Q22: N=1,123; Q23: N=1,097. Source: Deloitte 2016–2017 CIO survey.
capture the voice, input, and in particular, priorities OPPORTUNITIES TO BRIDGE THE GAPS
of business leaders is one of the integral elements of
success.” To keep up with changing business needs, To understand the CIO’s opportunity to bridge gaps
CIOs need to build the right set of capabilities in between business expectations and IT capabilities,
their IT organizations, enhance their own personal we first looked at what CIOs said their organizations’
competencies, develop relationships with other top business priorities were. We then examined the
executives, and find the right talent to drive business extent to which CIOs believe the business expects
value in the context of business priorities. them to contribute to these priorities. Lastly, we
compared these priorities and expectations to the
16
business to operate better, faster, and cheaper,

“[Customer] empowerment which ultimately enhances business performance.
Forty-eight percent of our surveyed CIOs ranked
is a big focus in the coming performance as their top business priority. An
years and is something the overwhelming majority of CIOs—70 percent—

understand that they are expected to lower cost of
organization will prioritize operations while improving service levels to drive
operational business performance. Our interviews
and build up and increasingly revealed that many CIOs find it easier to obtain
support with digital solutions.” budget for these projects because there are tangible
cost savings attached to such initiatives.
— Per Buchwaldt, CIO, Region Zealand
CIOs clearly appreciate the importance of their
role in enabling business operations; as we noted
IT capabilities that CIOs are building within their earlier, execution and solution delivery ranked
organizations and consider important to their second as an IT capability essential to their success.
success in meeting business mandates. However, despite this, many CIOs appear to
Enabling growth through a focus on
“Never feel like you are

customers and innovation: Three of the top
five business priorities CIOs identified in this year’s
survey—customers, innovation, and growth—are
related to driving revenue. In line with these
an order taker/pure service
business priorities, CIOs reported that “assisting in provider. IT is the only function
business innovation and developing new products
and services” (57 percent) and “developing the that has the visibility of the entire
organization’s digital capabilities” (56 percent) are
core expectations the business places on them. business life cycle end to end.”
— Zhanna Golodryga, senior vice president
In assessing their IT capabilities around innovation
and CIO, Hess Corporation
and disruption, 52 percent stated that this capability
currently does not exist or is being built within their
organization. Further, when we asked CIOs about undervalue the need to build their own personal
their own leadership competencies, only 21 percent competencies around driving performance within
picked “understanding of markets and disruptive their organizations. Only 27 percent of CIOs
business forces” as a current strength, and only identified delivering complex technology projects
26 percent said their IT organization’s skills in as an important skill, and only 37 percent selected it
customer and digital experiences were above as one of their top strengths.
average or leading-class. Tellingly, too, 52 percent
Reducing business and IT costs: Forty
of CIOs stated they will be hiring for customer and
percent of CIOs chose reducing operational and/
digital skills in the next two years. These numbers
or product costs as a business priority. Given the
suggest that, even though growth through an
mandate within most organizations to control costs,
innovative focus on the customer is a huge business
managing IT efficiencies and costs are considered
expectation, a majority of CIOs haven’t built
table stakes for a CIO—they are perpetually under
innovation and disruption capabilities to meet the
pressure to manage IT capabilities and resources
needs of the business.
to deliver “more for less.” Reflecting this dynamic,
Enhancing business operations by focusing CIOs reported that business leaders expect them
on performance: Emerging technology to reduce IT costs and drive efficiency (67 percent)
advancements play a large role in enabling a but also expect them to maintain availability and
17
performance of IT systems (66 percent) and simplify

IT infrastructure and applications (46 percent).
IT capabilities around operational excellence

“Rather than waiting for things
lead to greater cost efficiencies and improved IT to happen to you, you have to
performance. So, however, does another capability
make things happen. Get in front
on which surveyed CIOs placed less emphasis:
leveraging an ecosystem partner or partners to of that train. I think [you have
drive agility and flexibility within the organization.
Only 31 percent of CIOs view sourcing, vendor to take] calculated risks—the
management, and leveraging suppliers and partners
as a core capability essential to their success. This
business wants that.”
gap presents an opportunity for CIOs to proactively — Mary Gendron, senior vice president
reassess ecosystem capabilities to see if there is and CIO, Qualcomm, Inc.
room to drive additional business value.
Managing cybersecurity: Even though only 10 to secure investments from the business to support
percent of CIOs reported that cybersecurity and IT these activities.
risk management are a top business priority, these
Forty-five percent of CIOs said that cybersecurity
are still significant CIO responsibilities. Sixty-
will have a significant impact on their business in
one percent of the CIOs in our study identified
the next two years, a reason why perhaps 64 percent
cybersecurity (managing risks and protecting
of surveyed CIOs expect their technology spend
digital assets) as a core expectation of them and
on cybersecurity to increase over the same time
the IT organization. The majority of CIOs also said
frame. Yet, surprisingly, only 37 percent picked
that the business expects them to minimize risk
cybersecurity as an IT capability key to their success.
(56 percent) and protect customer information (56
percent) when it comes to security investments. Cybersecurity may not top the lists of business
However, one-third feel that the business views priorities, but it remains a constant boardroom
security and risk management as a compliance agenda item. And many of these leaders place
chore, a cost to the business and/or an operational the accountability and ownership of cyber risk
expense—which may not bode well for their ability management squarely on the IT organization.
Without fail, CIOs must make cybersecurity a top
priority even if the business does not—because the
“It is important to improve failure to do so can ultimately derail a CIO’s journey

to creating a lasting legacy. A cyber risk or breach
the cost structure; not just the is not just an IT issue, it’s a business issue. CIOs
are responsible for proactively communicating,
budget objective. Anyone can influencing, and informing the business and
save a dollar; you just don’t working with them to ensure an effective cyber
strategy is given the appropriate importance on the
spend it, but how do you create priority scale within an organization.
a structure where your unit

Changing tides: From
costs are improving, where you
performance to customers
can measure the value add?”
In our 2015 survey, CIOs reported that their
— Kevin Lowell, vice president of information businesses placed fairly equal emphasis on the top
technology, U.S. Cellular
five priorities (nearly the same percentage of CIOs
18
picked each of the top five). Managing the bottom 10). Furthermore, although 4 out of 10 CIOs still
line received equal emphasis as growing the top reported cost as a top-three business priority, cost
line; CIOs almost unanimously told us that business declined in importance compared to last year. We
leaders expected them to contribute to bottom-line saw a 10 percent decrease in the number of CIOs
business priorities and to enable or even drive top- who pointed to innovation as a top-three priority.
line initiatives.
Additionally, companies are distributing funding
In contrast, this year we noticed an interesting shift for innovation across the lines of business. CIOs
as CIOs selected the top five business priorities surveyed reported a decrease of 11 percent IT budget
for their organizations. We saw increases in the allocation to support business innovation between
number of CIOs who identified top-line business last year and this year. Regarding this finding, we
priorities (customers, growth, and performance) hypothesize that more companies are being prudent
as a priority, while we found a decrease in the with their IT investments specifically around
number of CIOs who identified cost and innovation innovation as IT budgets become a significant part of
as a priority. The most notable change was the shift the overall operational expense. Because innovation
from performance to customers as the leading is no longer viewed solely as an IT department line
business priority. However, half of surveyed CIOs item, CIOs need to partner closely with the business
feel that the focus on customers as a business to drive innovation.
priority has translated into an expectation of IT.
We also found that the shift toward the customer as
the top business priority held true for eight out of
CUSTOMERS ARE THE TOP
the ten industries represented in our survey (figure
PRIORITY; COST AND INNOVATION 11). For the energy industry, performance and cost
DROP IN IMPORTANCE were the top concerns; the public sector prioritized
There was a 12 percent jump in the number of CIOs regulations, cost, and cybersecurity.
who identified customers as one of their top three Customers are an important driving force behind
business priorities, and a 5 percent increase in the business expectation for digital transformation.
the number of CIOs who identified growth (figure Business leaders know that engagement with
Figure 10. Shifting business priorities
2015 2017
45%
Customers 57%
44%
Growth 49%
48%
Performance 48%
45%
Cost 40%
45%
Innovation 35%
19
Figure 11. Industry priorities
BUSINESS & PROFESSIONAL SERVICES CONSTRUCTION & MANUFACTURING
Customers 69% Performance 56%

Growth 65% Growth 56%
Innovation 50% Cost 53%
CONSUMER BUSINESS & RETAIL EDUCATION & NONPROFITS
Growth 66% Customers 59%

Customers 65% Innovation 52%
Performance 54% Growth 44%
ENERGY & RESOURCES FINANCIAL SERVICES
Performance 64% Customers 76%

Cost 56% Growth 45%
Customers 50% Cost 37%
GOVERNMENT & PUBLIC SECTOR HEALTH CARE SERVICES
Regulations 47% Growth 49%

Cost 45% Performance 48%
Cybersecurity 40% Customers 46%
TECHNOLOGY & TELECOMMUNICATION TRAVEL, MEDIA, & HOSPITALITY
Customers 54% Customers 68%

Growth 53% Growth 50%
Performance 51% Performance 45%
customers requires strong digital capabilities. customers. About the same number of CIOs are
However, we found that, on the whole, IT capabilities involved in customer experience and customer
are lagging vis-à-vis this business priority. data analysis. Only 16 percent reported having
cross-functional teams and governance established
When we asked CIOs about their involvement in
with the marketing function—although many CIOs
customer-focused initiatives within their companies
who had successfully delivered customer projects
(figure 12), the results were humbling. Only 59
reiterated the importance of this in our interviews.
percent of the surveyed CIOs are involved in
Overall, this data suggests that most customer-
building technology platforms for their company’s
centric initiatives are still siloed between the
customers, while less than half (46 percent) are
business and IT.
involved in designing products and services for
20
Figure 12. Customer-focused IT initiatives
Building technology
platforms 59%
Designing
products 46%
Delivering customer
experience 45%
Customer acquisition,
retention, and loyalty 44%
Analyzing
customer data 38%
Joint governance process

with marketing 16%
Further survey results around digital capabilities working with the business to define “digital” for
and investments suggest that CIOs may be their organizations. As we dug deeper into our data
underprepared to help their businesses execute and reflected on the interview conversations we
against a customer-focused digital agenda. For had with CIOs, it became apparent that CIOs feel
instance, more than a quarter (28 percent) of CIOs that many business leaders are limiting their digital
felt that their IT organizations are below average initiatives to customer-facing front-end tools and
in their current skill sets around digital; the technologies. Others, however, tend to limit the
biggest skill deficits identified were in developing CIO’s involvement in digital transformation, often
a customer-digital experience and analytics. bringing in a chief digital officer (CDO) or driving
Moreover, to enable digital, CIOs will likely have to digital disruption within their individual business
invest in digital technologies—but three out of four areas. When discussing digital transformation with
surveyed CIOs felt that they are underinvesting in us, Vittorio Cretella, CIO of Mars, Inc., noted the
emerging technologies. disparities between IT and the business when he
said, “In the midst of digital disruption, IT is still
not seen as core to business strategic decisions.”
The bottom line: Digital Some business leaders recognize that digital is a
transformation is about much broader set of activities that encompasses
more than customers redefining how work gets done, reframing how
business value can be created through emerging
We started this chapter by presenting the chasms technologies, and driving new revenue models.
between business priorities, business expectations When CIOs and business leaders think of digital
of IT, and IT’s capability to meet those expectations. transformation in this way, they can recognize that
The data suggests that the widest of these gaps lies customer-facing tools and technologies, though
in the CIO’s ability to support customers, growth, essential, are only the tip of the digital iceberg (see
and innovation—what we contend covers the full “The digital iceberg” sidebar).
spectrum of “digital” transformation.
CIOs can also look for opportunities to improve
As CIOs look to bridge these gaps, the greatest their relationship with CDOs, while focusing on
opportunity to do so may be through leading digital technologies to support digital enablement. CIOs
transformation initiatives, but more importantly in our survey say their relationship with the CDO
21
is limited (only 10 percent of CIOs report the CDO presents an opportunity to rethink the role
as one of their strongest relationships) and their of technology for an organization. Whether it
involvement in customer-facing initiatives is small. is industrial manufacturing companies collecting
Meanwhile, 82 percent of CIOs say their spend on and analyzing IoT data to generate new revenue,
legacy systems and core modernization will increase public sector organizations offering citizens new
or hold steady over the next two years. This signals ways to interact and improve public services,
the enormous back-end transformation underway to or health care companies experimenting with
support front-end customer demands. Technology cognitive computing to better treat cancer, all these
investments in cloud, analytics, and cyber are also disruptions are possible because of technological
expected to increase, with 75 percent, 76 percent, and scientific disruptions on the front end, but they
and 64 percent of CIOs, respectively, expecting an also require significant changes to back-end systems,
increase in these areas—all likely contributing to technologies, and processes. CIOs are best equipped
the broader digital transformation efforts. to understand and appreciate the enormity of the
iceberg and steer their organizations through these
Digital transformation efforts go far beyond
turbulent times.
just interacting with customers; digital
THE DIGITAL ICEBERG

As business priorities shift toward the customer, CIOs must continue to spend time looking at current
and future business expectations around digital transformation. In this digital era, business leaders are
increasingly focused on the “front” end of digital—the customer experience—but they may ignore the
capabilities and skills needed to support digital initiatives. In reality, as most technology professionals
appreciate, the front end is only the tip of the iceberg.
Digital is used today as shorthand for many things. Often, the most effective way to think about
digital is to view it as a way to harness technological and scientific disruptions to reshape the way
business value is created. Regardless of how digital is defined within an organization, for the CIO,
digital transformation may be rooted in far more than just edgy digital solutions—it likely also means
investments, legacy/core modernization, infrastructure consolidation, cybersecurity, data and analytics
solutions, and emerging technologies. Adopting this broad view of digital can allow CIOs to not just
respond to changing business needs, but to actively shape and drive them. CIOs can transform a
conversation about individual technologies and their ROI to a more robust discussion about building
a set of capabilities to support and drive the organization’s digital agenda. Enhancing the conversation
in this way can allow CIOs to calibrate their technology investments, capabilities, and the talent needed
to deliver value, today and in the future.
MORE THAN A QUARTER OF CIOS REPORT THEIR DIGITAL SKILLS ARE

BELOW AVERAGE
Digital technologies surpassed analytics this year as the set of technologies CIOs thought would have
the most impact on their organizations over the next two years. The link between digital technologies
and customer focus was clear: Seventy-seven percent of CIOs who selected customers as a business
priority indicated that they were also investing in digital. Also, 70 percent of the CIOs who indicated
customers were a key business priority agreed that digital will significantly impact their business.
Further survey results around digital capabilities and investments suggest that CIOs may be
underprepared to help their businesses execute a customer-focused digital agenda. For instance, more
than a quarter (28 percent) of CIOs felt that their IT organizations are below average in their current
skill sets around digital; the biggest skill deficits they identified were in customer and digital experience
and analytics. Moreover, to enable digital, CIOs will likely have to invest in emerging technologies and
analytics—but two out of five surveyed CIOs felt that they are underinvesting in emerging technologies
and analytics. For example, a CIO from a large national insurance company told us, “You can’t do digital
much better unless you’re a lot better in the data space as well.”
22
Chapter 3: Navigating the

CIO journey
A
S we’ve discussed, CIOs are uniquely value, and CIOs need to shift between patterns to
positioned to spearhead digital initiatives, continue to be effective as business needs change.
build IT capabilities, and enhance In this chapter, we highlight the key differentiators
competencies to meet current business priorities. between pattern types in the context of changing
However, many savvy CIOs are looking not only at business needs. To move from one pattern type to
current business priorities and needs, but also at another, CIOs should consider adapting and driving
future business direction—and they are charting change across four areas:
a course for that journey. The good news is that
• IT capabilities
our findings show that CIOs have a great deal of
control over their ability to proactively support and • Leadership competencies and influence
even influence their company’s strategic direction.
This is because CIOs’ ability to drive value to their • Talent and culture
enterprise—as expressed in their adoption of one of • Technology solutions and investments
the three CIO pattern types—is largely driven by the
IT capabilities and leadership competencies they
nurture in their IT organizations, not by their own Trusted operators:
individual personalities.
Adding value through
Our CIO survey respondents are already thinking operational efficiencies
about which pattern type is best aligned to their
business’ future needs to position themselves for Trusted operators make up 55 percent of all CIOs
success; 44 percent said that they wanted to adopt a respondents; they tend to lead IT organizations
different pattern (figure 13). where business expectations mandate a focus
on cost, efficiency, performance, reliability, and
CIO patterns represent three distinct approaches
security. Trusted operators are fairly evenly
for addressing specific business needs to create
distributed across all industries.
23
Figure 13. CIO pattern journeys
Current state Ideal state
11% Change
instigator
16%
19%
55% Trusted
operator
66%
34% Business
co-creator
True to their mandate, two-thirds (67 percent) 12 percent reported having no involvement with any
of trusted operators stated that operating and type of end-customer activities.
maintaining IT systems is a core business
Our analysis suggests that a third (33 percent) of
expectation, significantly more than other pattern
trusted operators expect to continue in their current
types. A majority (56 percent) of trusted operators
pattern. Only 11 percent said their business context
felt that project execution and solution delivery is
requires a shift to the change instigator pattern, but
an essential capability to nurture within their IT
more than half (56 percent) of trusted operators
organizations. Trusted operators were also the least
anticipate making the journey toward the business
likely to be involved with the end customer—in fact,
co-creator pattern.
“Operations and execution is incredibly important in order to be a

successful leader. If you have leaky ship then you will only go so far.”
— Jason Allison, state CIO, State of Florida
24
TRUSTED OPERATOR
This pattern primarily delivers operational discipline by focusing on cost, efficiency, performance,
security, and reliability to support business cost-reduction efforts. Trusted operators are expected to
concentrate their efforts on the fundamentals of delivering consistent, reliable, scalable, and secure
technology—all while ensuring cost efficiency. Data points represent number of survey respondents that
selected each option based on their pattern type.
1 in 3 56%
Technology and Project execution
enterprise and solution
architecture delivery
1 in 3 IT Talent & 32%

Hiring for
Risk and capabilities culture workforce
security enablement
41% 38% 23%

Creating a culture Creating a culture Creating a culture
of teamwork and of operational of continuous
44%
collaboration excellence learning
Communicate
nan ial im a t
of IT to the
business
1 in 4 Leadership Technology
Technology competencies solutions & 43%
operations and in uence investments Cybersecurity
execution
Relationships
to focus on are 40%
with the COO Legacy and core
and CEO modernization
25
SHIFTING FROM TRUSTED OPERATOR its appetite for transformation through technology-
TO CHANGE INSTIGATOR led innovation or wants to improve employee or
customer engagement through digital capabilities.
Trusted operators need to step into the change This transition requires CIOs to significantly change
instigator pattern when an organization increases how they allocate their time across key areas. For
Figure 14. From trusted operator to change instigator
Potential triggers for change

Business success hinges on
a complex, customer-facing,
technology-enabled
transformation
Business Shift in business
mandate expectations
Drive change 11% of From reducing IT cost
through business trusted operators to improving business
transformation to want to shift to processes and driving
support end-customer- change instigators large implementations
related digital or change initiatives
initiatives
IT Leadership Talent & Technology

capabilities competencies culture solutions &
in uence investments
Develop vision Communicate Leverage outside Increase

and strategy effe ti ely talent, including investments in
ecosystem cloud computing,
partners analytics,
Foster talent n en e and digital
and IT culture internal
focused on stakeholders Foster IT culture
digital that understands Build technology
business drivers, platforms to
Attract and external market, engage with
Engage ecosystem retain talent and customer customers
partners expectations
Develop culture
of accountability
Key considerations and challenges

• ire retain an en a e te nolo y staff • Build relationships with other business
leaders, especially those involved in large business transformation projects
• Encourage a culture of calculated risk-taking and focus on outcomes
26
“I think being a strong change leader is one of the key attributes of

any CIO. The CIO role has fundamentally changed from one that was
execution and operations focused to now being focused on building a
technology-enabled business strategy partnership. That said, IT teams
have to be focused on both delivery and operational excellence. The
primary role of the CIO is an influential partner with the business
leaders for how technology moves the business forward.”
— Steve Betts, senior vice president and CIO, Health Care Service Corporation
example, trusted operators spend 47 percent of CIOs we spoke to underscored the importance of
their time leading operational activities, while talent, “You can have the best plan, you can have all
change instigators spend only 18 percent of their of these pieces, but if you don’t have the talent to get
time on operations. On the other hand, change the job done, who cares? It’s like professional sports.
instigators spend roughly 41 percent of their time You can have the best strategy in the world, but if
leading change efforts. you don’t have the talent to drive it, you’re done,
you’re out of it. The reason I’ve been successful, and
More than any other pattern type, trusted operators
why my team is successful, is because talent I have
reported reducing costs as their organization’s top
on the team drives everything.”
business priority. In contrast, change instigators
identified their organization’s top business priority
SHIFTING FROM TRUSTED OPERATOR
as fostering innovation. Reallocating time and
focus from managing operations and execution
TO BUSINESS CO-CREATOR
to driving change and innovation may prove a When technology becomes a competitive
difficult transition for trusted operators. Such a differentiator, the organization needs a business
shift will possibly require developing and grooming co-creator. The journey to a business co-creator will
talent, enhancing personal competencies in require trusted operators to change their focus from
communications and stakeholder influence, and achieving and maintaining operational excellence to
building a culture and IT capabilities that support articulating and driving a strategic vision. However,
change and innovation. Trusted operators looking it’s unlikely a CIO can devote a significant amount
to drive technology-led business change will likely of time on strategy if his or her operational house is
need to find ways to increase their cloud, analytics, not in order. In our interviews, we found that many
and digital investments and use these investments CIOs earned their place as a business co-creator only
to offer better technology platforms for their end after establishing a solid track record of delivery or
customers. reducing IT operational expenses substantially over
In the journey from trusted operator to change multiple budget cycles. Our analysis suggests that
instigator, one of the keys is to strategically infuse this trajectory is an aspiration for many CIOs—56
talent and motivate the existing staff to shift percent of trusted operators identified that they
focus from operational excellence to business would like to be business co-creators.
transformation—an evolution that requires CIOs To become a business co-creator, trusted operators
to encourage a culture of calculated risk taking and should spend substantially more time on developing,
a focus on outcome. One of the change instigator shaping, and influencing business strategy. Business
27
co-creators estimated spending 39 percent of their
“It’s very hard to move to [a time on these activities. A business co-creator’s

ability to lead strategic alignment and partner with
business co-creator] if you don’t the business to support market growth is essential
to the role. The business co-creators we surveyed
believe it’s OK to make a mistake reported setting technology vision as their strongest
here and there.” competency (62 percent). They hold themselves

responsible for developing a culture of high
— Bill Braun, CIO, Chevron Corporation performance and have a strong comprehension of
Figure 15. From trusted operator to business co-creator

Acquisitions or rapid growth into
new markets where alignment
is needed between
business and IT
Technology-enabled 56% of From reducing IT cost
business strategy trusted operators and maintaining IT
want to shift to systems to driving
business co-creators business innovation
and top-line
growth

Build IT Set technology Acquire talent Increase

capabilities vision with skills investment
in strategic in analytics, in business
alignment to customer, innovation
business growth Develop and digital and analytics
mandates culture of high
performance
Focus on Design products
Foster innovation diversity in and customer
and disruption Understand thinking, style, solutions
market and and people
disruptive
Enhance business forces Design and
governance Create a culture deliver integrated
capabilities where IT talent customer
n en e understands experiences
stakeholders market forces

• Build relationships with internal and external stakeholders
• Fill skills gaps within the IT organization
28
“You have to always be on a lookout for the innovative technologies

that are transforming companies and in some cases industries. When
you have a really good understanding of the business, not just the
pain points, you can see opportunities that can give our business a
competitive advantage through the implementation of technology.
The art of the possible is endless . . . from improving agility and
efficiency all the way to digital transformation. Now is the right time to
deliver extraordinary IT outcomes. It should never be technology for
the sake of technology; it’s all about improvement of the business. We
have to look at transformation examples inside and outside of oil and
gas industry.”
— Zhanna Golodryga, senior vice president and CIO, Hess Corporation
the market and disruptive business forces. Trusted and IT system efficiency to fostering innovation and
operators, in contrast, are less likely to point to any driving growth through digital capabilities—which
of these leadership competencies as strengths. may be the hardest journey to navigate.
Compared to trusted operators—who often belong

to organizations that are operationally focused and Change instigator: Enabling
risk-averse—business co-creators more than any
other pattern belong to organizations that greatly
business transformation
prioritize innovation. Trusted operators who need and customer value
to transition to a business co-creator role should
Approximately 11 percent of CIOs surveyed are
delegate operational and tactical activities and
currently change instigators, who help their
invest their time in learning and understanding
organizations navigate complex, technology-
the business—which requires them to first develop
enabled business transformations and the resulting
and maintain a reliable and secure IT environment.
shifts in business processes, technology, and
They should also spend time understanding and
culture. Change instigators often actively look for
communicating the ROI of innovative technology
ways to enhance the role of technology in their
investments to the business. Forty percent of
organizations.
business co-creators report having an excellent
ability to articulate and solicit buy-in of technology As expected, a significant majority of change
investments and value, compared to only 22 percent instigators surveyed believe that the business
of trusted operators. expects them to improve business processes (72
percent) and deliver digital capabilities (61 percent)
A business co-creator’s success is judged by their
by driving large implementations (52 percent).
contribution to the top line more than by their
Change instigators are more likely to leverage
impact on the bottom line. In the shift from trusted
their ecosystem partners to help them navigate the
operator to business co-creator, the primary
complex environment they manage—over a third (36
expectations of the CIO change from cost reduction
29
CHANGE INSTIGATOR
This pattern effectively steers their organizations through complex, multifaceted technology-enabled
business transformation efforts. This often re uires changes in business processes, enabling technologies,
and most importantly, shifts in IT culture and the established way of doing things. Change instigators
spend much of their time, naturally, initiating change, and ensuring technology infrastructure is in
place to support this change. Data points represent number of survey respondents that selected each
option based on their pattern type.
48% 36% 65%

Vision and Ecosystems Hiring for
strategy and partners analytics
42% IT Talent & 45%

Hiring for
Talent and capabilities culture program
culture management
43%
1 in 2
Hiring for 1 in 4
Creating a culture
systems thinking Creating a culture
of understanding
and enterprise of accountability
68% of the market
architecture
n en in
internal
stakeholders
Leadership Technology
59% competencies solutions & 63%
Communication in uence investments Digital
Relationships
51% to focus on are 60% 47%
Attracting and with the CFO, Analytics Cloud computing
retaining talent CEO, and CHRO
30
percent) believe that leveraging ecosystem partners Most change instigators (59 percent) expect to
is a core capability essential to their success, more remain in that pattern in the future. Thirty-nine
than any other pattern type. percent want to make the journey toward the
Figure 16. From change instigator to trusted operator

Delivery challenges for a large,
global implementation coupled
with an IT budget cut

E ient an 2% of From driving large
effe ti e T change instigators implementations
operations, delivery, want to shift to to reducing IT cost
and systems trusted operators and improving
performance

Improve project Comprehend and Hire for skills Increase

execution and IT communicate in workforce investment in
solution delivery nan ial im a t enablement cybersecurity
of IT to the
business
Increase Rely on in-house
security and risk vs. external
management Further develop teams to execute
capabilities relationship technology needs
with COO
Promote
continuous
learning and
capability
mastery

• Build technical credibility and relationships within IT, not just with business leaders
• Adjust to shift from leading to supporting change and strategic planning
• Gain a deep understanding of IT’s commitments to the business • Fine-tune IT’s
executional capabilities • May need to shift investments from business transformation
an inno ation to ens re in rastr t re relia ility e ien y an sta ility
31
business co-creator pattern type, and only 2 percent implementations, shrinking IT budgets, and other
said that they want to become trusted operators. operational challenges, CIOs may need to address
core IT operational areas before tackling other
SHIFTING FROM CHANGE INSTIGATOR issues—which requires them to shift from change
TO TRUSTED OPERATOR instigators to trusted operators. Other times, new
CIOs are brought into an organization to specifically
Because of the potential for security breaches, fill the change instigator role as a transformation
delivery challenges in large technology agent—but inherit decades of uncoordinated and
Figure 17. From change instigator to business co-creator

Aligning business and IT strategy
post large transformational
system implementation

Technology-enabled 39% of From driving large
business strategy change instigators implementations to
want to shift to strategically driving
business co-creators top-line growth

Ensure strategic Strengthen Develop strong Invest in business

alignment strategic lieutenants innovation
alignment and to take on
governance operational work
Support competencies Expect emerging
innovation technologies to
and disruption Rely on si ni antly
Develop business relationships impact business
understanding to in en e
Value business and skills in IT business strategy
acumen over Focus on
technical product design
expertise Further develop Hire for and customer
relationships analytics and experience
with the COO digital expertise
and CMO

• Delegate some business transformation work to others to free up time to focus on
strategic activities • En o ra e staff to o rotations in ot er siness n tions ask t em
to lea ross n tional initiati es an oa an i e t em on so ter lea ers i skills
32
“I want IT to be like the air you breathe, that you take for granted,
because every minute [the business] is thinking and talking about IT is
a minute they’re not talking to our customers.”
— Ken Braud, senior vice president and CIO, Halliburton
decentralized technology decisions that have become business co-creators must delegate some of
created messy and complex IT environments their business transformation work to others to free
requiring them to put on a trusted operator hat. up capacity to focus on strategic activities.
Change instigators that need to make the journey While change instigators spend 40 percent of their
to the trusted operator role should spend the bulk time driving change initiatives, business co-creators
of their energies in ensuring smooth operational spend the same amount time contributing to
performance. Trusted operators spend 47 percent business strategy. In our interviews, many business
of their time on operation and execution-related co-creators said that strong lieutenants and teams
activities, while change instigators only spend 18 took over day-to-day operations, freeing up CIOs
percent. to focus on enabling business strategy. Change
instigators already invest significant focus on talent,
This change in priorities also means focusing on
so providing greater leadership opportunities to
cost and efficiency as major drivers of IT value.
their staff is a natural extension. Possibly because of
This shift does not mean that the CIO should not
their involvement with and influence over business
contribute to change efforts or business strategy,
strategy, business co-creators also control a greater
but the expectation of a trusted operator is to
portion—80 percent—of the IT budget, compared to
support—not lead—change and strategic planning.
change instigators.
Two out of three trusted operators (67 percent)
selected maintenance and support of IT systems
as a core expectation. Although only 2 percent of Business co-creator:
change instigators identified trusted operator as
their desired future state, we suspect the reason for
Driving business strategy
this shift is almost always a result of an event like a through IT and innovation
security breach or change in the CIO.
Thirty-four percent of global CIOs are currently
business co-creators. They have a knack for
SHIFTING FROM CHANGE INSTIGATOR
embedding IT into the fabric of the business, and
TO BUSINESS CO-CREATOR
they work to establish their credibility and build
It was not unanticipated to find that 39 percent of relationships across the organization to drive
change instigators believed their business needs influence. One of their primary goals is to fuse IT
would require them to take on business co-creator investments with business strategy.
as their future pattern type. Many CIOs told us Business co-creators are distinctive in other
that driving and successfully completing a large ways: 62 percent believe that innovation is a core
transformational change allowed them to build business expectation, more than any other pattern
influence and credibility within their organizations— type, and 50 percent believe that innovation and
an essential attribute for a CIO shifting between these disruption are core organizational capabilities that
two pattern types. Change instigators intending to they need to develop. They also are more likely to
33
BUSINESS CO-CREATOR
This pattern focuses their time on business strategy, while balancing their efforts to provide enabling
technologies and leading innovation initiatives. They work to establish their credibility and build
relationships across the organization to drive in uence. usiness co-creators tend to have diverse
backgrounds and successful track records of working in multiple business areas, including products,
services, or even business models. Data points represent number of survey respondents that selected
each option based on their pattern type.
75% 50%
Strategic Innovation and
alignment disruption
IT Talent & 65%

capabilities culture Hiring for
analytics
52%
1 in 2 1 in 3
Hiring for
Creating a culture Creating a culture
customer
of understanding of embracing
and digital
of the market ambiguity
69% experience
Technology
vision
Leadership Technology
42% competencies solutions & 17%
Culture of high Emerging
performance in uence investments technologies
Relationships
1 in 4 to focus on are
Comprehension with the CEO,
of markets COO, and CMO
34
be in organizations that prioritize performance and SHIFTING FROM BUSINESS

growth over cost. CO-CREATOR TO TRUSTED OPERATOR
An overwhelming majority—90 percent—indicate Only 2 percent of business co-creators anticipate
that business needs will require them to continue that future business needs would require them to
to act as a business co-creator. Only 2 percent said become trusted operators. Indeed, the transition
they would need to navigate toward the trusted usually goes the other way: In our conversations
operator role, while 8 percent stated a need to shift with CIOs who were relatively new to the business
to change instigator.
Figure 18. From business co-creator to trusted operator

Security breach or IT delivery
challenges as part
of a merger

Building and 2% of From strategically
maintainin e ient business co-creators driving top-line growth
an effe ti e want to shift to to reducing IT cost
IT systems trusted operators and improving
performance

Improve project Develop Hire for skills Invest in

execution and IT operations in cloud and legacy and
solution delivery and project distributed core technology
execution skill set systems modernization
Enhance
enterprise Shift focus Foster culture
architecture from building focused on
and technology broad external execution
standards relationships delivery and
to managing operational
IT performance excellence
Increase and operations
security and risk
management
capabilities

• Gain a deep understanding of IT’s commitments to the business • Hire a strong
operational lieutenant with expertise in driving operational excellence
35
“My team’s job is to keep the car running smoothly; keep it on the
center line. My job is to look ahead and see where we’re going.”
— David Songco, CIO, National Institute of Child Health and Human Development
“This isn’t little league; everybody doesn’t get a trophy just for
participating. At the end of the day, there’s a scoreboard. You don’t
get a pat on the back just because you try hard, you have to get
the results.”
— Brad Hildestad, executive vice president and CIO, COUNTRY Financial
co-creator pattern, we found that many initially SHIFTING FROM BUSINESS

took on the role of trusted operator, building the CO-CREATOR TO CHANGE INSTIGATOR
IT organization’s skills and talent to operate the IT
environment effectively and efficiently. However, When business success hinges on a complex,
in the event that the business is impacted by an multiyear, technology-enabled business
inefficient or unstable IT environment, large system transformation, the organization requires a change
outages, data breaches, or other systemic challenges, instigator. Eight percent of business co-creators
the CIO must immediately reprioritize and respond indicated that they ideally want to be change
by shoring up impacted systems. This does not mean, instigators. This need typically arises when a large
of course, that CIOs in this situation should halt business transformation is on the horizon or already
all other activities. Trusted operators do not focus underway—or when the technology organization
only on IT operations; they have to simultaneously needs a major shake-up in leadership, capabilities,
keep engaging with peers on business strategy or technology investments. A change instigator CIO
and managing any large transformational projects is expected to disrupt the status quo and steer the
underway. But under certain circumstances, the organization toward calmer waters.
CIO’s first priority is to invest in operating an
To make the transition to change instigator, business
efficient, secure, and reliable IT environment.
co-creators should double their time allocation on
Business co-creators tend to spend 40 percent of their business transformation-related activities, from
time on business strategy, while trusted operators 18 percent to 34 percent, and cut the time they
spend almost half of their time on operations and spend on change initiatives, from 38 percent to
execution. This significant change would require 20 percent. More than the other types, change
business co-creators to gain a deep understanding instigators report that they are expected to improve
and appreciation for the complexities of operating business processes (72 percent), drive digital
an IT environment. A business co-creator making activities (61 percent), and lead large technology
the move to trusted operator may want to hire a implementations (52 percent). Business co-creators
strong operational lieutenant with expertise and moving to the change instigator pattern type should
prior experience in driving operational excellence. reorient themselves and their organizations to
measuring project outcomes, maintaining agility,
and delivering supporting transformations to meet
these expectations.
36
Figure 19. From business co-creator to change instigator: Potential triggers for change

Technology organization needs
a major shake-up to meet
digital mandates

Digital disruption to 8% of From strategically
drive customer value business co-creators driving top-line growth
want to shift to to driving large
change instigators implementations

Improve Develop and Hire for program Invest in business

enterprise communicate management, innovation and
architecture technology vision analytics, and cloud computing
and technology enterprise
standards architecture
n en e Leverage
stakeholders emerging
Lead digital to buy into Develop culture technologies
disruption transformation of accountability to si ni antly
impact business
Develop talent Implement

and engage with culture to Focus on
strategic partners measure product design
to drive change performance and and customer
reward outcomes experience

• Measure and keep the IT organizations focused on project outcomes,
agility, and delivering supporting transformations
The bottom line: Change according to shifting business needs. In fact, it is

probable that the 55 percent of CIOs who think that
is the only constant their current pattern is appropriate for the future
are mistaken. It is also important to keep in mind
We cannot stress enough this absolutely critical
that patterns are not absolute. In other words,
fact when it comes to CIO patterns: They are not
business co-creators do not necessarily perform as
permanent, but instead are “transitory states” that
that pattern type 100 percent of the time. In fact,
change the CIO’s focus, activities, and relationships
business co-creators spend close to 40 percent of
37
their time managing operations and delivering within their organization, CIOs need to drive the
enabling technologies. business understanding of the latest and greatest
technology, influence organizational leadership
The forward-thinking CIO will often fulfill current
to use technology to support business needs, and
business expectations, look ahead to future business
advocate for appropriate technology deployments.
priorities, and then chart their course to the pattern
Each CIO should think of himself or herself as a
that best fits what the business will require next.
business leader and start setting their course based
These are proactive activities: Business leaders
on an understanding of both present and future
will not necessarily tell you where to go. As leaders
business priorities.
38
Chapter 4: Shaping your legacy

by mapping the digital agenda
E
VEN as business needs change and they navi- with the customer—the center of the story. Using
gate among pattern types in response, shape- digital, we interacted with customers as individuals
shifting CIOs must take charge of their legacies and not as a sample. This was a very natural first
by driving the organization’s digital transformation. step for digital.
Given the increased emphasis on customers as a
Now, as digital has matured, it may be best defined
business priority, digital transformation appears
to include a spectrum of objectives and supporting
to be dominating the boardroom agenda—even
emerging technologies that drive precision and
though it’s often not clear what “digital” actually
intimacy of information about behaviors, desires,
means. Most definitions of digital are shallow, and
and operational performance. Customers are not
the expectations for the journey to a fully digital en-
the only focus; digital is expanding to include
terprise are optimistic. For many it means tinkering
employees, partners, business processes, products/
with the customer experience, but digital is much
offerings, and even broader competitive dynamics
more than that. From what we understand, the
in and across industry boundaries. By this definition,
source of the gaps in the digital space is driven by
digital manifests itself into predictive analytics and
hype and disparity in expectation, perspective, and
machine learning, IoT, robotics, cloud, cyber, and
knowledge. CIOs can anticipate and address these
“mixed reality” (augmented and virtual reality).
gaps and transform their businesses into leading
Digital is shorthand for these technologies, and for
digital organizations—and in the process, shape
how they are combining to revolutionize experience,
their own legacies.
reshape how work gets done, and reimagine broader
business growth. It is about all these technologies
Digital re-defined collectively, in various dimensions, with the speed
to harness and innovate mechanisms. Digital allows
Early forays into digital tended to coalesce around us to rethink how we engage and do business, and
a customer-focused stack, dealing with the Web, because of its precision, we can rethink and reshape
mobile, social, commerce, and content management. business.
These mechanisms helped improve engagement
39
“Much of what we’re doing to attract and retain new customers,

while innovating our products and services, focuses on the digitization
process. Our customer experience is evolving from traditional face-
to-face agent contact as the reality of dealing with Millennials and
Gen Z is in knowing how they operate, how they like to purchase, and
how their methods differ from our customers of the past. We need to
provide that ‘Amazon-like’ experience to make it easy to work with us
via online channels. To attract and retain a strong customer base, we
need to provide channels with which younger consumers are
most comfortable.”
— Julia Davis, senior vice president and CIO, Aflac, Inc.
Three areas of opportunity experiences that transcend products, offerings,

and channels that are centered on simplicity,
Digital has become a rallying cry for a wide variety utility, and authenticity. This requires integrat-
of opportunities—all of which are in play in many ing the entire business to demonstrate value at
organizations. Each organization likely has a every customer touch point.
different focus and a different set of digital priorities.
• Digital at the core: Digital can change how
Even within a company, different executives are
work gets done. In the same way that it can im-
likely to prioritize the digital embodiment closest
prove the customer experience, it can make the
to their individual purviews. A good starting point
employee experience more interesting, efficient,
is to standardize verbiage, priorities, and in-flight
and intuitive. But it is not just about augment-
investments. The digital agenda can and should
ing and improving the employee experience—it
drive toward multiple outcomes, but overlapping
is also about automating more of the underlying
initiatives can cause redundancy of spend, dilution
workload. This also includes systemic chang-
of resources, and complexity in managing the
es—an exceptional front-end strategy must be
inevitable dependencies back to legacy systems,
supported by an exceptional back office, which
services, and data. Digital typically manifests in one
requires new expertise, processes, and systems,
of the following three categories:
and potentially a new operating model.
• Customer experience: Growing competition
• Business transformation: This is the broad-
and consumer power have eroded traditional
est opportunity for digital. How can digital tech-
product-based advantages, forcing companies to
nologies be used to extend the core business and
shift to a new battlefield—customer experience.
business model, enter new markets, and mone-
Digital allows an unprecedented understanding
tize assets in different ways? Enabling increased
of the behavior, preferences, and influence of an
connectivity, addressing growing competition
individual customer. Digital allows companies
and consumer power, and disrupting others be-
to create personalized, predictive, and dynamic
fore you are disrupted all require new engage-
40
ments, new products, new business models and To help make those ambitions real, here are three
organizations, and new ecosystems. considerations for CIOs looking to shape their
organizations’ digital agenda.
Impedance mismatch: Connect ideas and solutions across the
Prepare for digital disruption enterprise. Left to their own devices, functional
leaders will likely tackle each of the three
In a recent study conducted by Deloitte and the opportunities in independent ways, resulting in
MIT Sloan Management Review, 87 percent of suboptimal investments and precluding broader
executives responded that they believed digital adoption patterns. For example, the manufacturing
technologies will disrupt their industry. Only group using the IoT for efficiency within the
44 percent of those same executives said their production line may not consider that the same IoT
organization is adequately preparing for these infrastructure can be used to monitor how products
looming digital trends.1 are being used in the market and to understand
customer behaviors that can drive new products.
In that dichotomy, CIOs can find both great threat CIOs can help broker and cross-pollinate ideas, and
and great opportunity. On the downside, inadequate use the collective slate of business priorities to guide
preparation for digital disruption could be digital platform and underlying core modernization
interpreted as an indictment of the CIO and broader efforts. As a business co-creator, addressing this
IT organization. Digital represents a broad range mismatch could be a huge opportunity for a CIO.
of domains and ambitions, but all share a strong
technology underpinning. Shouldn’t the executive Lead IT enablement. CIOs will need to
in charge of technology be leading the charge? understand how to orient and organize the skill
sets needed to support broader IT operating and
Most organizations find themselves in a much more delivery models and the internal opportunities
nuanced environment. Each of the non-CIO leaders these entail. This can be challenging if available
is focused on some part of digital. The CMO centers IT resources are accustomed to legacy enterprise
on omnichannel customer engagement, the COO silos, processes, transaction execution, and yearly
on robotic process automation and applying IoT waterfall budget cycles. IT departments are in a
to the supply chain, the CFO around analytics and period of transformation, evolving their operating,
blockchain-based inter-company transfers, and so delivery, and organizational models. In hand, the
on. The CIO, however, is positioned to visualize the entire IT stack is being modernized—infrastructure,
digital “big picture” and help guide investments applications, data, and even the scope, skills, and
that build the right mix of new capabilities, new capabilities of IT’s team members. Modernization
architectures, and new delivery models to avoid efforts can be a way to achieve efficiency and cost
redundancy of spend on siloed or, even worse, savings, but CIOs should recognize these are
conflicting solutions. Platforms focused on digital not on the business’s radar. In fact, less than half
content, digital identity, data aggregation and of the survey respondents say that simplifying
analysis, integration, and orchestration can become IT infrastructure and applications is an explicit
powerful building blocks that amplify and accelerate business priority (46 percent). Regardless, as a
all digital initiatives. Common approaches to trusted operator, a CIO has tremendous opportunity
security, reliability, scalability, extensibility, to initiate broader change within the business of IT.
and maintainability can help bake enterprise-
grade considerations into early prototypes and Explore new partnerships. There’s no such
experiments, short-circuiting the time it will take thing as “too small to matter” when thinking about
to harden and expand digital efforts that need to be new potential partners, players, and spenders.
scaled and managed in production. How do you scan beyond traditional tech partners
to drive new ideas and to source or acquire new
capabilities? How do you build out the capabilities
41
with your partners on digital? Some organizations of digital’s comprehensive potential reach across the
want a short tech solution, not a full-blown digital organization, he or she can actually do more than
disruption. But how much of it is done in-house? anticipate—they can shape the direction. CIOs can
Should you take advantage of advancements forge the path forward—not by land-grabbing all
happening outside and team with other smaller facets of digital from individual executive sponsors,
partners? As a change instigator, a CIO has the but by playing the role of conductor and enabler,
opportunity to think beyond traditional partners. rolling the disparate initiatives into a shared vision
and pragmatically executing pieces with an eye
toward the strategic endgame. Today’s CIOs should
The bottom line: CIOs can accept this potential and execute on it for even
shape the path forward greater legacy outcomes—not just for themselves
and their IT teams, but for the business overall.
Digital presents a challenging and exciting time for
CIOs as they navigate business needs around digital
technologies. But since the CIO has a unique purview
ENDNOTES
1. G. C. Kane, D. Palmer, A. N. Phillips, D. Kiron and N. Buckley, “Aligning the organization for its digital future,” MIT
Sloan Management Review and Deloitte University Press, July 2016.
42

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Navigating legacy: Charting the course to business value

Figure 1. How we analyzed nature vs. nurture

Not knowing ANSWERS Knowing Direct COMMUNICATION Diplomatic

Competition ATMOSPHERE Harmony Outgoing INTERACTION Quiet

Avoidant VIEW TOWARD RISK Tolerant Big picture OUTLOOK Details

Numbers EXPRESSION Words Realistic APPROACH Creative

WORKING STYLE ATTRIBUTES Tolerates CONFRONTATION Avoids

Takes charge GROUP SETTING Team player Deliberate DECISIONS Quick

Structured MEETINGS Brainstorm Adapts easily NEW ENVIRONMENTS Takes time

Essential CONSENSUS Nonessential Cutting edge NEW TECHNOLOGY Slow to adopt

ro essionals COLLEAGUES Friends Objective WORKING WITH OTHERS Emotions

Fluid WORK STYLE Mechanical Outgoing NEW PEOPLE Quiet

Strategic alignment Innovation and disruption

Vision and strategy Governance and compliance

Talent and culture Risk and security

Technology and architecture Ecosystems and partners

Analytics and insight

LEADERSHIP COMPETENCIES Technology vision

Communication n en e internal stake ol ers

omm ni ate nan ial im a t o T Operations and execution

Deliver technology initiatives Leverage external partners

on i t resol tion Attract and retain talent

lt re o i er orman e om re ension o markets

Refer to the appendix, questions 7, 8, 9, 10, 22, and 23.

The happy conclusion: CIOs’ ability to create

SEVENTY-FIVE PERCENT OF CIOS

Globally, CIOs as a group are surprisingly similar in

Overall, none of the personality traits most common

We originally assumed that certain personality

Figure 3. CIOs can drive value regardless of personal nature

Trusted operator Change instigator Business co-creator Mean Standard deviation

PERSONAL STYLE ATTRIBUTES OVERALL Expressive EMOTION* Contained

Not knowing ANSWERS Knowing Direct COMMUNICATION Diplomatic

Competition ATMOSPHERE Harmony Outgoing INTERACTION* Quiet

Avoidant VIEW TOWARD RISK Tolerant Big picture OUTLOOK* Details

Numbers EXPRESSION Words Realistic APPROACH Creative

WORKING STYLE ATTRIBUTES OVERALL Tolerates CONFRONTATION Avoids

Takes charge GROUP SETTING Team player Deliberate DECISIONS Quick

Structured MEETINGS Brainstorm Adapts easily NEW ENVIRONMENTS Takes time

Essential CONSENSUS Nonessential Cutting edge NEW TECHNOLOGY Slow to adopt

Professionals COLLEAGUES Friends Objective WORKING WITH OTHERS Emotions

Fluid WORK STYLE Mechanical Outgoing NEW PEOPLE Quiet

Refer to the appendix, questions 7 and 8.

tended to differ from other CxOs in their greater

Figure 4. Compared to CxOs...

CIOs are more: CIOs are less:

Visual Risk averse

Source: Deloitte 2016–2017 CIO survey. Deloitte University Press | dupress.deloitte.com

Figure 5. To e T a a ilities essential to s ess

Trusted operator Change instigator Business co-creator

Refer to the appendix, question 22.

sion does not have to be complex or expansive; it

“I call it win with the basics.

• Vision and strategy. Nearly 50 percent of our

“Spend a lot less time on technology. Spend a lot more time on

Figure 6. IT capabilities gaps

The good news is that CIOs of any pattern type are

building the right team and setting a strategic

We also found differences in how CIOs of different

in chapter 3 as we look at how CIOs navigate the 43%

journey between pattern types.

Astonishingly, all three of these competencies are

“Adaptability is really essential to building the top five capabilities that