Why do we persevere with the myth that organizational ‘outcomes’ reflect a CIOs capability?

In assessing individual CIOs, CEOs persist in attributing many firm level outcomes to the capabilities of their CIOs.

My research reveals that CEOs (and many other members of the top management team, or TMT) continue to assume that a CIOs capability is directly reflected in:

• Market Performance

  • Perceived shareholder value e.g. market reactions to CIO appointments and/ or upturns in IT investment, etc.

• Organizational Performance:

  • Business performance (e.g. changes in business ‘productivity’), minimal disruption (e.g. rapid business assimilation of new IT products and infrastructure) or even business innovation (e.g. successful provision of new, analytical and first to market capabilities (e.g. new systems informing continual changes and aiding R&D activities in new product introduction processes), etc.
  • IT performance (e.g. the provision of critically important resources (for sustained competitive advantage) and/ or, at the operational level, the maintenance of service levels).
  • Financial performance (e.g. costs, revenues, asset value, etc.).

• Business-IT ‘Alignment’

  • E.g. effective governance, collaborative (resource) planning, etc.

• Compliance

  • E.g. with global/ national standards and legislation

However, my research shows that:

• Firm level outcomes are often inconsistently defined, misunderstood, or poorly communicated; and in many cases are either highly subjective or deemed ‘intangible’.
• Additionally, firm level outcomes arise as a result of multiple (layered) sources of causation, making it impossible to attribute a single cause to any given outcome[i]. In other words, how can we ignore the relevance of multiple resources on firm performance whilst attributing firm level outcomes to a single individual?
• Even if a small number of causes can be isolated, research has yet to reveal evidence of singular, direct relationships between individual CIOs and firm level outcomes.

And what of the effects of increasing levels of digital maturity, or increasingly dynamic business environments on expectations for firm outcomes? In other words, how can CIOs hope to evidence capability if the goals of the game, or stakeholder expectations, keep changing?

If firm level outcomes no longer provide a useful means to truly assess a CIOs capabilities, then what’s the alternative?

The answer resides in the combination of two concepts: ‘effectiveness’[ii] and ‘role-making’[iii].

At the level of the individual, in our case the CIO, effectiveness is really an expression of whether a CIOs stakeholder agrees that the CIO is actually doing what is expected of them. Whilst this ignores the question of whether the stakeholder’s expectation for the CIO is correct or not, it does provide a baseline for a conversation about what both parties expect of the CIO. This brings us onto our second concept, role-making.

In everyday life, rightly or wrongly, we assign each other ‘roles’ with the expectation that we can each enact the role assigned to us.

Consider role expectations between a newly married couple: each party will have some form of conceptual view of what they expect from someone fulfilling the role of ‘husband’ or ‘wife’. Over time, as each party refines their understanding of their (pre-defined) expectations for both roles, each will trade (and compromise) those expectations to (hopefully!) reach a consensual view, forming, a cohesive social norm. This dynamic process, of exchanging and adjusting expectations for each other’s role  is termed role-making and those who are successful at this, I suggest, should be deemed as being effective.

So, does CIO role effectiveness help reduce opaqueness about a CIOs capability?

Through research and practice, I have found that effective role-making can indeed be used to represent a new means for CIOs and their stakeholders to work together to agree about what each expects of the CIO’s role.

Importantly, given the increasing levels of dynamism in today’s digitally maturing business environments, I view this ongoing process as a new way to:

• Identify what’s expected of the CIO, today i.e. a new way of defining the CIOs role (think Job spec.)
• Monitor rapidly changing, evolving expectations from a widening group of CIO stakeholders
• Address differences in opinion about what various stakeholders expect of the individual enacting the role of CIO; and
• Create a new, dynamic learning culture for the exec team as they gauge and check each other’s emerging/ evolving expectations for the CIOs role

For more information about my research on CIO role making and more effective boards, register to download our summary papers on CIO effectiveness, CIO Recruitment and Executive Learning , check out our blogs or visit our shop for case studies, booklets and more!

[i] The difficulty in identifying the relevance of the contribution of any single resource to Sustained Competitive Advantage (SCA) is described as ‘causal ambiguity’ (Collis, 1994)  and represents the risk of an ‘infinite regress’ (Kraaijenbrink et al., 2010) for those seeking to identify (and assess) higher orders of resource capability within an organisation

[ii] According to management theory, effectiveness can be described as the ‘…extent to which what managers actually do matches with what they are supposed to do,’ (p.88) (Hales, 1986)

[iii] This process, dependent on the objectives and characteristics of the individuals and the effects of their environments has been referred to either as role reciprocity (Gouldner, 1960) or Role-Making (Turner, 1962)

Image by Maike und Björn Bröskamp from Pixabay  (‘friendship-2366955_1280’)