During Q3 of 2024, Piccadilly One conducted a survey where we asked for feedback on the reporting lines of CIOs based in the UK. Over the coming weeks our Director, Simon Elkinson dissects the findings. Here is Part 6 of the series where additional insights from CIOs on reporting lines and Board membership are revealed.
CIOs provided nuanced perspectives on the role of IT leadership, its relationship with the organisation’s structure, and the importance of reporting lines. Here are the key themes from their responses:
Role of the IT and Digital Agenda
CIOs emphasised that the IT reporting structure should be determined by the company's digital and technology agenda. If IT is central to the business's transformation, it makes more sense for the CIO to report to the CEO. In contrast, if IT is viewed as more operational or a cost centre, reporting to the CFO or COO might be more appropriate.
Importance of the Individual Relationship
Several CIOs highlighted that success in the role often depends on the relationship with the person they report to, rather than the formal reporting structure. A strong, emotionally intelligent CIO can work well with both CEOs and CFOs, as long as they build trust and respect. The key is understanding and navigating the personalities involved.
Board Membership and Its Relevance
Opinions varied on whether the CIO needs a seat on the board. Some CIOs argued that Board membership is essential, especially in businesses where technology plays a strategic role. In these cases, having the CIO on the board ensures that technology, cybersecurity, and digital transformation are integral to the company's strategic discussions. However, others noted that board membership might not be necessary if the CIO is already part of the Executive Committee (ExCo) and has sufficient influence.
Context-Dependent Reporting Structures
CIOs agreed that the ideal reporting structure depends heavily on the company's culture, size, and industry. In technology-driven companies, the CIO is more likely to report to the CEO and have a strategic role. In contrast, in more operational or cost-focused businesses, reporting to the CFO or COO might be more common. The maturity and vision of the business often dictate the CIO's reporting line.
Evolving Role of the CIO
Some CIOs shared that their reporting lines evolved as the business recognised the value of technology. For example, a CIO might start reporting to the CFO but, over time, as the company matures digitally, they may transition to reporting to the CEO or even joining The Board.
CIO's Strategic Value
Several CIOs emphasised that the CIO role is as important as that of the CFO or HR Director, especially given the pervasive nature of technology in modern businesses. IT is an enabler of business transformation, and therefore, it is critical for CIOs to be part of high-level strategic discussions, regardless of their direct reporting line.
Navigating Organisational Dynamics
Many CIOs noted the importance of understanding the dynamics of the leadership team and organisational structure when considering a role. Success depends on the CIO's ability to navigate these relationships and make IT a strategic priority, regardless of where they sit in the hierarchy.
Challenges with CFO Reporting
A common sentiment among CIOs was that reporting to the CFO can make the role more challenging, as it may add delays in decision-making and limit the CIO's strategic influence. Some expressed a preference for reporting directly to the CEO to avoid the added layer of communication through the CFO. However, in some cases, a strong working relationship with the CFO can mitigate these challenges, especially if the CFO is open to giving the CIO autonomy.
Importance of Emotional Intelligence
Emotional intelligence was frequently mentioned as a crucial skill for CIOs. The ability to communicate effectively, build relationships, and understand the strategic needs of the business is key to the success of any CIO, regardless of the formal reporting line.
The Value of Board-Level Insight
Having the CIO on The Board brings a level of technological insight that can be critical for the company’s strategic positioning, especially in areas like digital innovation, cybersecurity, and IT-driven business processes. Without this representation, critical IT investments might not be fully understood or prioritised by the board.
Industry-Specific Considerations
The CIO’s role and reporting line can vary significantly based on the industry. In digital businesses or sectors where technology is central to operations, the CIO is likely to play a more prominent role. In other industries, the CIO’s influence may be less, and reporting to the CFO or COO may suffice.
Reporting Line Flexibility
Some CIOs noted that their reporting line wasn’t a "deal breaker" as long as they had access to the CEO and were involved in Board-level discussions when needed. This flexibility is especially true in businesses going through significant change, where reporting lines may shift based on current organisational needs.
Strategic vs. Operational Focus
CIOs pointed out that while operationally focused companies might view IT as a support function, businesses with a strategic focus on digital transformation are more likely to elevate the CIO to a Board-level or CEO reporting position. For CIOs working in businesses heavily reliant on technology, the strategic nature of their role often necessitates more visibility and influence.
CIO as a People-Centric Role
Ultimately, many CIOs stressed that their success lies in their ability to understand the people within the organisation, not just the technical aspects of IT. Building relationships with key stakeholders, communicating effectively, and aligning IT with business outcomes are essential to ensuring that the CIO role is impactful.
In summary, the CIO’s reporting line, whether to the CEO, CFO, or COO, largely depends on the company's culture, industry, and digital strategy. However, successful CIOs are those who can navigate organisational dynamics, build strong relationships, and position IT as a critical enabler of business transformation, regardless of where they sit in the hierarchy. Emotional intelligence, communication skills, and strategic insight are essential qualities for any CIO, enabling them to influence and drive change effectively.
Piccadilly One helps organisations hire CIOs. We Put People Above Technology placing the number one technology position within an organisation and that person's direct reports.
To discuss your next CIO hire or, if you're a CIO, your next direct report hire, contact our Director and Founder Simon Elkinson
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