CIO’s Journey to the Board
A CEO perspective and a peer assessment
[Part II of Microsoft’s ongoing study on the evolving role of CIO in India]
The information contained in this document represents the current view of Microsoft Corporation on the issues
discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it
should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the
accuracy of any information presented after the date of publication.
This White Paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT. Complying with all applicable
copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this
document may be reproduced, stored in or introduced into a retrieval system, or tran
transmitted
smitted in any form or by
any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the
express written permission of Microsoft Corporation.
Microsoft may have patents, patent applications, trademarks, copyrigh
copyrights,
ts, or other intellectual property rights
covering subject matter in this document. Except as expressly provided in any written license agreement from
Microsoft, the furnishing of this document does not give you any license to these patents, trademarks,
copyrights,
pyrights, or other intellectual property
Unless otherwise noted, the example companies, organisations, products, domain names, e-mail
e
addresses,
logos, people, places and events depicted herein are fictitious, and no association with any real company,
organisation,
anisation, product, domain name, email address, logo, person, place or event is intended or should be
inferred.
For more information on this report or to receive future reports from Executive Circle Leadership Series please
contact: [email protected]
2
Table of contents
Executive Summary
3
Introduction
4
Methodology and the survey universe
5
The organisation’s readiness for CIO leadership
6
The CIO’s ‘Board Readiness’
8
The CIO’s contribution to the CEO’s partners table
10
Towards getting ‘Board Ready’
11
Next steps
14
Appendix: Respondent companies list
15
3
Executive Summary
The “CI
“CIO’s Board Readiness Survey” sought to assess where CIOs in
India are in their journey to the top echelons of the corporate hierarchy.
hierarchy It is
a continuation of a previous survey entitled “The CIO Leadership Journey:
A promising start”. These surveys form part of Microsoft’s on-going
on
study
on the evolving role of the CIO in IIndia.
While the earlier survey yielded many insights, it still left some key
questions unanswered. To resolve these questions,
questions Microsoft – in
partnership with The CTO Forum – conducted the current survey.
Respondents to this survey were drawn from CEOs, CFOs and HR Heads.
Heads
The survey assessed organisations’ readiness for CIO leadership, CIO’s
‘willingness’ versus ‘readiness’ for a seat at the Board and their
contributions to the CEO ‘partners’ table’. Finally, all respondents were
asked to rate eight top ‘‘must
must have’ leadership qualities for a senior
leadership position. CIOs were then benchmarked on these ‘must have’
attributes.
Key
ey findings of the survey were:
•
Only 46% of the C-level
level executives (CXOs) surveyed believe
that organisations in India are ‘ready’
y’ or ‘somewhat ready’ for
CIO leadership. The corresponding
sponding figures for CFOs and COOs
CO
were 99% and 95%.
•
But they also assert that CIOs are well on their way to the
Board. More than 60% of the CXOs surveyed believe that CIOs
are ‘either ready’ or ‘somewhat ready’’ for a presence on
o the Board.
•
The survey revealed that among CXOs, CFOs were the most
skeptical of the CIO’s readiness to join the board.
board Only 12% of
CFOs think that CIOs in India are ‘Board ready’! The
corresponding figures for HR Heads and CEOs were
we 50% and
23%.
•
While CIOs are clearly members of the ‘CEO’s partners table’,
they still lag behind others in terms of bringing value to the
CEO ‘partners table’.
•
CIOs were found wanting in three of the ‘must have’ attributes
for a senior leadership position i.e. insights into a company’s
business, the ability to influence peers and the ability to manage
change and lead business transformation.
In conclusion
conclusion, CIOs in India, like their C-level
level peers are making their way
to the Board. But to be truly ready for a seat on the Board, they must
strengthen their leadership skills. They need to develop business insights,
deepen their ability to influence peers and develop the capacity to manage
change and lead business transformation.
4
Introduction
Evolution of
organisational structures
The CEO, who some decades ago was the ‘be-all
all and end-all’
end
of a
business, feels the need for a ‘partners’ table’.. Beginning with the CFO,
Marketing Heads and HR Heads, we believe that in India too, much like the
develo
developed world, CIOs are making their way to top leadership positions.
positions
But h
how ready are organisations? How
w ready and willing are these CIOs?
CI
How do CIOs compare with their C-level
level peers in this journey to the
Board?
A brief recap of the
previous survey
In an attempt to answer these questions and to track the CIO’s
CIO leadership
journey to the Board
Board, Microsoft previously conducted a self- assessment
survey among CIOs in India. The findings were insightful. The survey
revealed that organisations in India are ready to consider CIOs for top
leadership positions, albeit in a limited manner. It also revealed that only a
few CIOs were ready for the Board. Furthermore,
more, CIOs identified eight
reasons why organisations in India would consider them for top leadership
positions and rated themselves on these leadership qualities which are
considered to be ‘must haves’’ for top management positions.
The CXO Survey sought
to resolve key questions
that emerged from the
CIO Survey
But, as with any self assessment survey, the findings were partial and non
conclusive. To bridge these gaps and address the key questions that
emerged, Microsoft – in partnership with The CTO Forum – conducted the
current survey.
Respondents to the survey included CEOs, CFOs and HR Heads.
Heads They
were asked to examine the CIO’s ‘Board Readiness’ relative to their other
C-level
level peers.
5
Methodology and the Survey Universe
The survey was conducted by The CTO Forum and The CIO Institute in partnership with Microsoft. The
results are based on over 75 individual responses comprising CEOs, CFOs and HR Heads with a
break-up
up as given in the chart below (Please refer to the appendix
x for the complete respondent
company list).
Respondent companies by sector
Respondents
Engineering
Electronics Consumer Telecom
&
3%
Durables
4%
Constructio
3%
Healthcare
n
3%
5%
Textile
Diversified
1%
5%
CEO
BFSI
6%
CFO
HR Heads
20%
IT&ITeS
22%
Media
8%
21%
Consulting
8%
Automotive
8%
59%
PSU &
others
14%
Pharma &
Chemicals
10%
The findings in this report are based on responses to a highly interactive questionnaire. The survey
population included a broad cross
cross-section of C-level executives spanning over 15 different industries
across India.. Our sample comprised large
large, medium-size and small companies. Majority of them are
privately held companies. Interview
nterviews were also conducted with a few selected respondents. This
provided tremendous
ous opportunities for both qualitative and quantitative analysis.
6
The organisation’s readiness for CIO leadership
The survey considered ‘the Board’ as comprising the top leaders in the
corporate hierarchy
hierarchy. Based on this assumption, respondents were asked to
choo
choose from multiple options to evaluate an organisation’s readiness for
CIO leadership.
Are organisations in India ready to consider the following
CXOs for top ‘leadership’ roles?
(percentage of respondents who chose from multiple options)
CIOs
If we consider the CXO’s
journey to the Board as a
100m race, CFOs lead the
contest while CIOs have
just covered 11m
HR Heads
CMOs
COOs
CFOs
10 13
7
“The Board”
(defined as top
leadership positions
in an organisation)
85 86
56
46
34
34 35
29
21
12
17
4
Yes
No
0
To a certain extent
1
6
0
1
Don't know
86% of our respondents believe that organisations in India are ready for
CFO leadership. This re
re-establishes the widely-held
held view of the CFO’s prepre
eminence in the organisation. Similarly, as the operations of a company
expand and increased competition resu
results
lts in new marketing strategies,
more is demanded from COOs and CMOs. As they deliver beyond their
traditional responsibilities, their roles are transformed along with their
positions in the organisation. As a result, 85% and 56%
56 of our respondents
believe that organisations in India are also ready for COO and CMO
leadership, respectively.
More than 40% think that
organisations in India are
‘somewhat ready’ for a
CIO leadership
Interestingly 46% of the CXOs surveyed state that organisations in India
are somewhat (i.e. 12% ‘yes’ plus 34% ‘yes to a certain extent’) ready for
CIO leadership. The corresponding figure from the previous survey was
96%.
Organisation’s readiness for
CIO leadership
CIO self-assessment
The CIO’s self –
perception was different
from peer perception
which is more cautious
Yes
To a certain extent
No
Don't know
Organisation’s readiness for CIO
leadership
CXO assessment
Yes
No
To a certain extent
Don't know
0%
8%
12%
37%
34%
59%
46%
4%
7
While gaps like this are common when comparing self-assessment
self
with
peer assessment, the size of the gap raises interesting questions. So what
explains this 50% gap in what the CIOs consider themselves to be, as
opposed to their C
C-level peers?
Based on subjective responses and insights from selected interviews, we
believe that the gap in self
self-assessment versus peer-assessment
assessment exists due
to the following reasons:
a) CIOs believe that as technology permeates the organisation, it
places them in an excellent position
osition to understand core business
processes and hence enables them to drive value in different
business units and the organisation.
b) Their C-level peers acknowledge this, but think that CIOs still need
to develop inter-personal skills such as people management. They
also believe that they lack product, finance and market expertise.
8
The CIO’s ‘Board Readiness’
Similar to ‘the organisation’s readiness question’, CXOs
CXO were asked to rate
their peer
peers’ readiness for a seat at the Board. Their assessments were
based on current responsibilities – traditional and CXO-plus
CXO
role – of a
CIO/HR Head/CMO/COO/CFO in their organisations.
Responsibilities/areas where CXOs play a significant role
(Respondents chose from multiple options; all figures in percentages)
CIOs
HR Heads
CMOs
86
65
33
72
59
39
81
88
71
65
59
52
39 42
33
25 29
23
14
41
45
52 51
28
10
Board
CFOs were ahead
followed by COOs and
CMOs
CFOs
Responsibilities where CIOs play an equally
important role
Responsibilities where CIOs
along with HR Heads and CMOs
are yet to play a significant role
Responsibilities where
CXOs play a significant
role
COOs
CEO
Management or
Executive Com
BU Head
Advisory council
As expected CFOs lead the pack, followed by COOs and CMOs. 72%
7
of
the CXOs surveyed believed that CFOs were already on the Board. The
corresponding figures for COOs and CMOs were 65% and 39%
respectively.
Respondents also believe that CIOs are well on their way to the Board.
While 6% believe that CIOs are ‘already on
n the Board’ another 61% (i.e.
25% ‘ready’ and 35% ‘ready in a limited manner’)) assert that CIOs are well
on their way to the Board
CXOs Board Readiness
(percentage of respondents who chose from four options)
Already on Board
32
20
Ready
Ready in a limited manner
8
1
12
30
35
35
61% believe that CIOs are
well on their way to the
Board
4
12
Not Ready
35
44
36
23
26
23
27
40
51
6
CIOs
HR Heads
CMOs
COOs
CFOs
A closer examination of these results reveals that 50% of HR Heads and
23% of CEOs believe that CIOs are ‘ready’ for a seat on the Board. But
clearly the CFOs – with only 12% stating that CIOs are Board Ready – are
more demanding than their peers in terms of what they expect from a CIO.
9
Percentage of CXO respondents saying<
They are ready
They are not ready
50%
44%
HR
35%
Clearly, the CFOs have
great expectations<
23%
CFO
CEO
12%
CEO
8%
CFO
HR
10
The CIO’s contribution
ontribution to the ‘partners’ table’
table
Organisational structures
need to evolve to adequately
respond to today’s changing
needs
To thrive in today’s new business landscape marked by fundamental
technological change, organisational structures need to evolve from their
traditional
itional hierarchical management models
s to enable businesses to
adequately respond to changing needs. New organisational structures are
needed because finding solution
solutions requires continuous collaboration and
exchange of ideas between peers.
At the top management level too, decision
decision-making needs
need to be based on
enhanced peer interaction, where ideas between different CXOs compete
on an equal footing. This results in more informed decisions. Over time,
organisational structures have evolved to leverage the wisdom of all its
leaders in the most effective way.
CMOs were believed to
contribute the most to the
partner’s table
To understand this better and to assess the contribution of different CXOs
to the ‘partner’s table’, CEOs were asked to rate the significance of their CC
level peers’ contrib
contribution.
ution. In a departure to earlier responses, CMOs were
now at the top, followed by CFOs and COOs.
While CIOs are now established members of this ‘partners
partners’ table’, they fall
behind the others in terms of the value they bring to the table.
Contribution to the CEO’s "partners’ table"
(CEOs were asked to rate their CXO’s contribution on a scale of 1 to7;
where 7=very significant contribution and 1=insignificant contribution)
CMOs
While CIOs are clearly
members of the ‘partners’
table’, they are still lagging
behind the rest in terms of
value addition!
COOs
5.4
5.6
HR Heads
COOs
HR Heads
CIOs
6.2
6.3
CFOs
CMOs
4.3
CIOs
11
CFOs
Towards Getting ‘Board Ready’
Preparing CIOs for ‘leadership roles’
The following table shows findings from o
our earlier survey,
survey and highlights
the primary reasons why CIOs felt ready to assume senior leadership
positions
positions.
CIOs' reasons to consider themselves for senior leadership positions
Rating on a scale of 1 to 7 where 1=not significant and 7=critical
reason
Experience of managing large teams
Bring a specialist perspective
The Reds, Oranges and
Greens in a CIO’s journey to
top leadership positions
Help preserve and secure information…
Strong capabilities & leadership skills
Play an important role in managing risk
Help cope with dynamic environment
Have an enterprise-wide view
IT has strategic role for business
4.8
4.9
5.0
5.1
5.2
5.4
5.5
5.7
Can leverage/align IT with business …
5.9
In the same spirit
spirit,, the current survey asked CXOs to rate the must-have
must
attributes for senior leadership. All eight attributes were rated ‘important’.
But amongst them, insights into the company’s business, leadership and
ability to develop and manage talent, and the capacity
capaci to manage change
and lead business transformation were rated as most important.
‘Must have’ attributes for senior leadership
(Respondents rated the following qualities on a scale of 1 to 7 where
7=most important; 4=important; 1=good to have)
Insights into company’s business
Must-have attributes for
senior leadership
positions
6.35
Leadership and ability to develop and
manage senior talent
Ability to manage change and lead
business transformation
6.21
6.00
Ability to influence peers/top management
5.73
Large team management skill
5.60
Global mindset
5.56
Ability to lead operations and execution
Ability to develop and execute a clear
succession plan
5.17
5.02
To measure the CIOs’ performance, CXOs were asked to assess and rate
CIOs on these qualities. Compared to the CIOs’ self
self--assessment on these
qualities, the current survey revealed that CIOs have a substantial distance
12
to cover in their leadership journey.
CIOs’ qualities benchmarked against ‘must have’ qualities for top
leadership positions
(Respondents rated CIOs on the following qualities on a scale of 1 to 7
where 7= excellent; 4=average; 1=poor)
Must Have
CIOs average score
Insights into company’s business
6.4
3.1
Leadership and ability to develop and manage
senior talent
Ability to manage change and lead business
transformation
6.2
2.8
6.0
3.1
Ability to influence peers/top management
5.7
3.2
Large team management skill
5.6
2.9
Global mindset
5.6
3.1
Ability to lead operations and execution
5.2
3.2
Ability to develop and execute a clear
succession plan
5.0
3.0
Similarly the survey asked CEOs to assess CIOs against their peers on the
must
must-have
have attributes. Unlike the CXO response, the CEO response
showed much greater promise.
CEOs rated CXOs qualities on a scale of 1 to 7 where 7= excellent; 4=average; 1=poor
CIOs average score
HR Heads average score
5.2
CMOs average score
5.2
5.2
5.0
4.9
4.8
4.4
4.4
4.4
4.0 4.0
4.0
3.9
4.4
4.3
4.2
4.0
4.8
4.6
4.6
4.6
CFOs average score
4.4
4.0
4.0
3.7
3.4
3.4
4.0
3.9
3.7
3.5
3.1
Insights into
company’s
business
13
Leadership and Large team
ability to
management
skill
develop and
manage senior
talent
Ability lead
Ability to
Ability to
operations and manage change
influence
execution
and lead
peers/top
business
management
transformation
Global mindset
Ability to
develop and
execute a clear
succession plan
Impediments in a CIO’s path to top leadership
A CEO perspective:
As per CEO responses, the 10 most common impediments in a CIO’s path
to the Board are:
1. Inadequate business understanding
2. Lack of product/market expertise
3. Inability to influence top management
4. Still inward looking
5. Lack long term holistic view of business
6. High application of technical jargon in daily business dealings
7. Lack the ability to understand future technological challenges
8. Lack global view of business
9. Lack insights into the financial aspects of business
10. Need to learn how to speak business first
14
Next steps:
Microsoft is committed to walking
ing the leadership journey with the CIO. Based on these findings,
findings we
outline key next steps, where we promise to partner you.
•
A ‘pocket MBA’ for better insights into a company’s business
The increasingly strategic role of IT has placed CIOs in an excellent position to understand core
business processes across functions. This has enabled many CIOs to provide savvy ideas about
new business applications. These savvy ideas emanate from the current cross functional
responsibilities of a CIO. But ffor these ideas to generate real business values,
values CIOs need to have
better insights into a company
company’s business. An executive MBA course that focuses on ‘cross
functional management skills
skills’ would be a valuable add-on
on to the CIO’s already impressive track
records. These courses could
ould include case studies on ‘daily business issues’ that confront different
business unit heads. It should also include ssimulation projects where CIOs assume leadership
responsibilities of other business heads.
•
Learning how to influence peers/counterparts
As revealed from the subjective responses to the survey, CIOs who seek a more enhanced
leadership role face many challenges. They understand that they alone can’t drive changes in
functions under the control of other executives. They are also aware of the fact that more IT
leadership is demanded from them. To meet the new demands on their rrole,
ole, CIOs must be able to
‘negotiate and influence’ their way through large and complex organisational structures. But the
technical nature of their tradition
traditional role places lesser focus on developing
develop
softer skills like
influencing peers and counterparts
counterparts. But as they make the transitions and become business
leaders, they will need to make focused effort on ‘softer skills’ like communication, resolving
conflicts and having tough conversations. Seminars and workshop on these skills will help CIOs
who are stepping up to this leadership challenge.
•
Programmes and coaching on how to lead business transformation
As
s CIOs in India take on hybrid roles, they need to develop the skills needed to lead business
transformation in today’s dynamic and vvolatile world. CIOs need to familiarise themselves with
changes in business environment (internal and external), and understand these
the dynamics to lead
and transform businesses when required. As their roles evolve, they need to have a better
understanding of the external factors that impact businesses. Programmes and coaching on these
factors have been found effective in other parts of the world. The same could be emulated.
15
Appendix: List of respondent companies
1.
Eastman Chemicals
41. Quippo telecom infrastructure
2.
Novartis
42. Mania Infotainment Pvt Ltd
3.
Zee Turner
43. Apollo Tyres
4.
Grow Talent
44. Rites Ltd
5.
Mudra Communications
45. M/S JHS Svendgaard Lab Mott Macdonald
6.
HPCL
46. DCM Shriram Consolidated
7.
Evalueserve
47. Voltas
8.
D Link
48. Havells Sylvania
9.
Hero Mindmine
49. Rediff.com
10. IBM India
50. Dabur Pharma
11. Binani
51. Bennett Coleman & Co
12. AC Nielson
52. Aditya Birla Retail
13. Axis Risk consulting
53. Phoenix Lamps
14. Nutri-Health
Health Systems Pvt Ltd
54. Sasken communications
15. East India Hotels
55. Ciber
16. Sona Group
56. Datamatics
17. TCI XPS Air & Courier
57. BPTP
18. Agnity
58. India Gypsum
19. Thompson press
59. Lucent Polaris software
20. Sunil Healthcare
60. Saint Gobain
21. WS Industries
zeler Automotive Profiles India
61. Metzeler
22. Jayanti Group
62. NDPL
23. Paharpur Business
ess Centre & Software Tech
63. JMA India
Incubator Park
24. Sunitron Exports Pvt Ltd
65. P&G
25. Anil Agencies Pvt Ltd
66. JMA India
26. Geotrackers
67. Annik Systems
27. Ramco systems
68. Grant Thornton
28. Engineering Projects
69. Artech Infosystems Pvt Ltd
Lt
29. Artin Dynamics
70. IFFCO Tokio
30. Ultra Motors India
71. HSBC
31. Parabolic Drugs
72. Ipca Laboratories
32. JMA India
73. Biocon
33. NDPL
74. Mahindra & Mahindra
34. Intec Group
75. Chimes Aviation Pvt Ltd
35. Times infotainment
36. Shalimar Group
37. Holostik India
38. Yes Bank
39. Grant Thornton
40. Network Programs
16
64. Technova Global