Technology
A New Star at C Level
Mark Polansky
05/03/2004

As the 21st century unfolds, we are seeing an important new presence in the top executive ranks: the chief information officer (CIO), a title that did not even exist until about 15 years ago. The CIO’s position in the corporate structure has risen from the tactical/operational level to the strategic/management level as the intrinsic economic value of information has become ever more crucial to our bottom lines. More to the point, the ideal CIO for these technology-driven times is a visionary who also has the savvy to measure both the impact and returns that each new technological implementation brings.

Corporate governance and regulatory compliance keep CIOs up at night.
In my executive search practice at Korn/Ferry, CEOs looking for new CIOs always tell me that what they really need is a leader. I know to look for the kind of executive who can project such infectious enthusiasm throughout the organization as to make employees at every level eager to adapt the new technologies that are changing the way every industry does business. This past fall we ran a research project in which we conducted a series of interviews with more than 50 CIOs at major corporations in a wide spectrum of industries to see how they perceive their roles. We found that across the board, CIOs today dismiss the parochial image of the IT department as a maintenance shop for digital hardware, and see it instead as an integral part of operations that supports the entire strategy of the company.

A valuable insight about the CIO’s relationship with other C-level executives comes to us from Jeff Spar, senior vice president and CIO at the Readers Digest Association: “The days of the CIO reporting to the CFO are gone at companies that truly value the impact IT can deliver. The CFO focus is on generating value through cost management and financial processes, while the CIO delivers value by leveraging IT against the company’s ‘sweet spots’ to generate value. Both should work directly for the CEO to maximize shareholder value and business impact.”


We found that the number one concern that keeps a CIO up at night is not technological challenges, but corporate governance and regulatory compliance. The CEO and CFO sign off on financial statements, but at the end of the day, it is the CIO, the executive responsible for producing the data, who is accountable if the company should ever be found in noncompliance, not only with the Sarbanes-Oxley Act, but also with the U.S. Patriot Act and the Health Insurance Portability and Accountability Act, as well as a host of regulatory issues having to do with privacy and intellectual property protection.

At the same time, other business leaders are thirsty for business intelligence, which is just the kind of service that a CIO is best qualified to oversee. The traditional IT department furnishes decision makers with historical data. In the consumer products sector, for example, that meant tracking past consumer buying data, whereas today CIOs can serve up invaluable business intelligence such as forecasting changes in consumer habits and retail operations. The 21st Century CIO can provide senior management with useful information on what their industry at large and what their competitors are doing, using available software products to thoroughly research markets and create actionable business insights. Powerful analytic tools can sift through mountains of data to spot emerging trends and patterns.


Most large corporations in almost every industry now realize the importance of having technology labs where information systems staff evaluate new technologies, they report to the CIO, who has the job of determining how each new innovation might change daily operations or the customer experience. At consumer products companies right now, CIOs are addressing the challenge of adopting radio frequency identification, which involves inserting a tiny tracking chip in cases of inventory. Wal-Mart is leading a mandate that suppliers incorporate this technology to automate their inventory management in much the same way that EZ Pass has automated toll collection.

Such intelligence will require significantly larger systems for collecting, managing and analyzing data. Powerful analytic tools will sift through mountains of data to spot emerging trends and patterns. Over the next few years, the CIO will evolve rapidly from a supplier of information to a provider of the kind of insight that drives business value. 

Mark Polansky is the information technology practice leader for North America at Korn/ Ferry International.