As the function becomes strategic, chief officers proliferate
By Russ Banham
Chief Executive magazine’s StrategicCIO360
David Elges is the Chief Information Officer for the City of Boston. He’s also the city’s Chief Technology Officer and Chief Innovation Officer. Reporting to him as the head of Boston’s IT function are the Chief Data Officer, Chief Digital Officer and Chief Information Security Officer.
Also reporting to Elges are the Chief Technology Officer, Chief Enterprise Applications Officer, Chief of Broadband and Cable Officer, and a Chief of Staff to, as Elges said, “manage all those chiefs.”
As the chief “chief,” Elges directly reports to Boston’s Mayor Kim Janey. “I’m the strategic guy focused on where we’re going, how we’ll get there and how that process will evolve,” he said. “It used to be that the CIO was a tech person exclusively, but nowadays you need to be that as well as have business chops. You have to be a leader who understands where technology can help as the organization evolves.”
The City of Boston is not alone among organizations with an IT function that has stockpiled so many chiefs that one can’t help but wonder, umm, why so many chiefs? No one disputes there’s room for each role—someone needs to head up digital transformation, data analytics and cybersecurity, but why call them all “Chiefs”? There’s one Chief Financial Officer and one Chief Operating officer. Shouldn’t that title be exclusively reserved for the CIO?
“Technology has become more pervasive, important and complicated, making the whole notion of one technology leader with the mental capacity to know everything—every opportunity afforded by technology—unrealistic,” said Lou DiLorenzo, a Principal at Deloitte and head of the management consulting firm’s CIO practice. “Once organizations started delineating these opportunities, they designated people to provide clarity around them.”
Okay, we get that but why call them “Chiefs?” Steve Van Kuiken, Senior Partner at McKinsey & Co., and Global Leader of Technology at the management consulting firm, took a swing at an answer. “The proliferation of the `Chief’ title in IT is driven by the expanding scope of what used to be solely the CIO’s or the CTO’s role,” Van Kuiken said. “The number of chiefs reflects the breadth and complexity of technology in relation to business and management.”
Both respected tech strategy consultants make compelling points (without necessarily answering the question). The lines between business operations and technology—two separate functions not long ago—indeed have blurred to near-invisibility. Operations in many businesses are technology. Digitized production systems connect manufacturing operations. Front office functions like customer sales and service, and back-office functions like finance and accounting, all rely on technology to get work done.
Still, why so many chiefs? No other function comes close. Why not have a Director of cybersecurity or a Vice President of digital? “Actually, we have titles similar to that and a few deputy chiefs,” said Elges. “We began using the `Chief’ title based on the complexity, the ask and the volume of work. In a city our size, the scale of responsibilities in these areas is substantial. You work your way up to `Chief’ status.”
Just a Couple Chiefs Will Do
Many midsize and smaller organizations at the outset of their digital transformation have far fewer chiefs presiding over their respective IT fiefdoms. Even a few large public companies keep the number to a minimum, such as Fresenius Medical Care, a global provider of kidney dialysis services at 4,000 clinics worldwide serving 350,000 patients annually.
Anjana Harve is the Global CIO at the company, which tallies some 17.8 billion euros in revenues worldwide (it operates in North America, Asia-Pacific and Latin America). Other than the company’s Chief Information Security Officer (CISO), Harve is the only “Chief” in the IT function, which she leads. “All the regions report to me,” she said.
Like other large enterprises, Fresenius is in the thick of a digital transformation, an ongoing journey that began with digitizing its patient data and financial data. The company has now migrated to the second stage of this journey, using data analytics software, applications and techniques to help physicians make more informed and insightful patient treatment decisions, while decreasing operating costs.
“We’re a very patient-focused company and are looking at ways to unlock the value from our patient data, which is voluminous,” Harve said. “I do have someone here focused on data analytics, but we don’t call that person Chief Data Officer. We also have someone focused on patients’ digital experiences with us, but again we don’t use the word `Chief’ to describe this leadership.”
Neither does Maxion Wheels, a Germany-based leading global manufacturer of steel and aluminum wheels for passenger, commercial and specialty vehicles. Esteban Remecz is Maxion’s CIO. He said he is also the CISO, Chief Technology Officer (CTO), Chief Data Officer and Chief Digital Officer, although he doesn’t carry the titles. “There are no other chiefs here but me but we’re thinking about recruiting a CISO,” he said.
Maxion Wheels is not a small company; its stock trades on the Brazilian Stock Exchange and its revenues are in the $2.3 billion annual range. With guidance from Remecz, Maxion has invested in becoming a digitized Smart Factory. The data generated by manufacturing equipment is collected in the cloud and subsequently analyzed by the company’s Data Analytics Service Center to improve manufacturing efficiency, predictive maintenance and productivity.
That’s just one part of Maxion’s digital transformation, which Remecz leads. “In drawing up the roadmap, we started by digitizing our data across all operations and functions,” he said. “We then built on this foundation to build out the analytics. We could have appointed a Chief Digital Officer or a Chief Data Officer to take on the responsibilities but didn’t feel they required separate leadership. I wear the various hats.”
Leading the Way
From an etymological standpoint, “chief” is an old word, originating from the Latin “caput,” for head, in 700 BC or thereabouts. Caput also is the derivation for the Italian word “capo,” as in capo di tutti capi, the “head of all heads” in the Mafia. With apologies to Boston, Elges is the city’s capo di tutti capi of IT.
What do the other capi do? Well, Boston’s CTO is focused on its massive technological infrastructure—the servers, data centers, storage networks, cloud computing resources—“basically the hardcore back-end environment that everything runs on,” Elges said.
An equally demanding job is Boston’s CISO, in charge of securing this technology infrastructure. The Chief Digital Officer, on the other hand, is entrusted with overseeing the city’s external digital communications—the social media equivalent to a traditional press office. The other CDO, Chief Data Officer, manages data science and analytics tools, whereas the Chief of Enterprise Applications oversees core technology applications like the ERP system. The Chief of Broadband and Cable, a new position, is entrusted with rolling out 5G broadband connectivity.
As for the city’s capo di tutti capi of IT, Elges is the “transformation strategist,” he said, deciding what the future technology infrastructure will look like, explaining its value to Mayor Janey and other city leaders, getting the budget right and working with the other “Chiefs” reporting to him to “make it happen,” he said.
This reporting structure is not uncommon, said Naufal Khan, McKinsey Senior Partner and Global Leader of Technology Strategy and Management. “Given the complexity of technology, our central view is that it is helpful and important for there to be one overall leader with an integrated view of the organization who other technology leaders report to,” Khan said. “Generally, this person is the Chief Information Officer, even though the role involves much, much more than `information.’”
Van Kuiken concurred with the semantics, pointing out that some organizations are dropping the “I” from IT and calling the function simply Technology. “We’ve also noticed some clients with multiple `chiefs’ bringing it all back as just one “Chief” in the CIO, and others combining different roles, like a Chief Data and Information Officer,” he said.
That’s the case at ABM Industries, a publicly traded facility management provider with 140,000 employees and $6.5 billion in annual revenue, where Melanie Kirkwood Ruiz has one title combining two responsibilities, Chief Information Officer and Chief Technology Officer. “That’s officially my title,” said Ruiz.
She is not a CTO in the traditional sense, however. “In the past, the CTO role was the person who ran the infrastructure and the underlying foundational technologies, whereas in my case and more commonly it’s seen as the chief innovation person, using emergent technologies to generate operating efficiencies and enhanced customer experiences.”
DiLorenzo from Deloitte also cited the evolution of the CTO role. “It’s an interesting title with some overlap,” he said. “With some clients the title is to describe a company’s tech visionary, an evangelist for lack of a better word who’s brought in to focus on new products and customer-facing technology, whereas at others it’s reserved for the head of technology R&D, especially companies selling
technology or the R&D,” he said. “That’s not to suggest the CIO can’t do all this.”
Ruiz’s dual leadership title encompasses the administration of back-office IT systems and the oversight of important client-facing technology. As a service provider, ABM needs its technology to be able to access some customer IT systems, and vice versa. As clients’ IT systems become more innovative, ABM’s technology must keep pace, she said.
Ruiz’s role is strategic, in the sense that she must ensure the company has the technology framework and tools to help bring its strategic initiatives to fruition. “I’ve got a seat at the table and am involved in everything, since almost every initiative is tech-oriented,” she said. “IT is not just a back-office function and hasn’t been for a while. Not since the CIO was given the mandate to digitally transform the organization.”
Certainly, the different ways of doing the same things are appropriate for different organizations. What matters is not what something is called, but what it is. Down the line, some IT chiefs, in fact, may eventually become as obsolete as typesetters and switchboard operators in the 20th century. Chief Transformation Officer is a case in point. “The role is designed to be temporal,” DiLorenzo said.
Alternatively, the CISO is expected to stand the test of time, for reasons that should be obvious. Although many CISOs report to the CIO, with a dotted line to the CEO, others report directly to the CEO and the board of directors on the organization’s cyber risk readiness, DiLorenzo said.
For the time being, expect continuing title diversification. “It’s really dealer’s choice, based on an organization’s size, breadth and scope and the signals it wants to send,” he said. “There’s really no one way, no perfect set of titles or consistency. The important thing is the amalgamation of skill sets.”
As for the capo di tutti capi of IT, the CIO is part-strategic leader, part-technology leader and part-organizational leader, but is really more than the sum of these parts. As Khan puts it, “The best CIOs are in line to become CEOs.”
Not that Elges has any intention to become Boston’s next Mayor. “I love what I do,” he said. “It’s exhilarating to be the person whose vision is fixed on the rate of change in the digital and data spaces and the rapid evolution of technology. One minute you’re working on mainframes and the next you’re having conversations on AI and 5G. I’m running a marathon at a sprinter’s pace.”
Russ Banham is a Pulitzer-nominated business journalist and best-selling author.