The impact of an entrepreneurial CIO is greatest when the need for productivity leverage is greatest, as in the current economic environment, according to Gartner. Analysts say that, by 2012, the companies with the top 25% of earnings growth will have an entrepreneurial CIO.
Gartner maintains that the distinctive feature of the entrepreneurial CIO is the proactive willingness and courage to take the high-level risks also undertaken by the business, to provide new or breakaway competitive advantages that translate directly into revenue, financial results and market share. It is this willingness to apply the highest level of creativity available within the organisation to do things in a fundamentally different way that establishes new sources of shareholder value, while also setting new levels for IT productivity. It comes with the understanding that the business may fail in the attempt, but also that it will surely fail or, at best, attain mediocre performance, if it does not act.
“One of the biggest dilemmas facing organisations as we head towards 2010 is how CEOs and CIOs can execute entrepreneurial tasks in the current risk-averse environment,” says Jorge Lopez, vice-president and distinguished analyst at Gartner. “As shareholders see the recession recede in their day-to-day actions, they will drive for revenue and earnings growth, and they will expect CEOs and CIOs to perform to heightened expectations.”
Lopez advises organisations to check that they have the right CIO for a return to growth. He said that the right combination of vision, risk-taking and persuasiveness is needed to fill the requirements for the job.
Gartner believes that the entrepreneurial CIO is the person who, working jointly with an entrepreneurial CEO or business unit executive, marshals the resources under the command of the IT organisation, as well as creatively linking to resources outside of IT, to define and capture new and growing business opportunities. The primary focus of the entrepreneurial CIO is on new-business impact, and that impact is felt in three major ways by the business:
* Velocity of change – the ability to influence the velocity of change through the structure of the business, so that a change in strategy can be implemented at a rate that outperforms all other competitors, and, therefore, also draws revenue at an earlier time and at a rapid pace. Improvements in this area lead to gaining competitive advantage quickly in new markets with new offerings.
* Strategic leverage and extension – capabilities that extend strategy for the enterprise to new markets, new industries and new uses, and that lead to growth in revenue against entrenched and new competition.
* Operational efficiencies – efficiencies that improve operations to gain breakaway competitive advantage that further increase the rate of revenue and earnings growth. Gaining an improvement that is a factor of ten or more is key to establishing true competitive advantage in the area of operational efficiencies.
Gartner's own CEO research has established each year for the past six years that more than 60% of CEOs see their IT organisations as a key constraint to the changes they need. It is the ability of the entrepreneurial CIO to deploy resources and architecture within the IT organisation that makes it a partner that is synchronised with the entrepreneurial objectives of the business.
“The entrepreneurial business and CEO need an entrepreneurial CIO to come up with and make the substantial changes required to capture new business and industry opportunities,” says Lopez. “The most valuable CIOs will be those who can provide this crucial value in a difficult economic environment.”