One of the compelling developments in the transition from a COVID footing to battening down for turbulent economic times has been the evolving role of CIOs, especially on leading on enterprise transformation. As a long-time student of such technology-driven change I have been fascinated by how CIOs can partner with CFOs as key change agents. Companies are finding a new normal as pandemic disruption gives way to a constricting economy, and emerging alliances between those two c-suite members are serving as leverage points for accelerating change.
The budgeting and planning process has emerged as a key arena for this revolution – all the more so with the specter of recession looming. CIOs are partnering with CFOs to fundamentally transform their organizations’ cultures, rebooting the way we work in this new hybrid world to make it more inclusive, collaborative, agile and bottom-up – and often improving customers’ experience with new products and simplified buying experiences. And the specter of an economic downturn only makes these relationships more powerful.
Importantly, their experiences hold lessons – a road map for CIOs who have not yet forged alliances with their CFOs.
CIOs often have the c-suite’s largest budgets, constantly navigate the interdependencies between other divisions and functions and are digital transformation’s architects and sherpas, giving them crucial experience applicable to the whole enterprise. “The CIO’s position as the hub bringing all the business to life well-positions them for transformation,” observed Yvette Smith, CIO at F5. Whatsmore, the unprecedented pace of digitization during the pandemic has only underscored how effectively technology can transform businesses.
We’ve learned that we can move past 20th century notions of collaboration, for example – that we don’t need to be physically co-located all the time to brainstorm, plan or execute. Our research institute, GoForwardToWork.com, has captured many of these lessons since the pandemic hit, including the fact that we have only started tapping this transformation’s potential. Too often we’ve ported in-person routines into the virtual world rather than embracing the new ways of operating. Starting collaboration asynchronously, for example, is not only more efficient but also permits a broader range of voices to be heard.
Embracing this new way of work is critical for the planning and budgeting process because it lets leaders drill deeper and leverage those closer to the front-lines regarding which initiatives will provide maximum return. That’s why CFOs are natural partners in this process: They have an interest in remaking business planning to gain greater visibility into where and when key decisions are being made and affording greater agility in terms of connecting with and facilitating them. Leveraging these technologies allows CIOs and CFOs to develop a more agile planning process, one more like a running, organic conversation than the traditional static, top-down model. The ability to plan, analyze and act in real time is a game changer in these unprecedented times.
American Airlines’ CIO and CFO, for example, recently worked together to map a new funding model and product structure and introduce an objectives-and-key-results planning architecture. In 2020, Unilever redesigned its planning process to crowdsource ideas from senior managers below the executive team, allowing them to engage the top 300 leaders in the planning process, permitting them to better identify growth opportunities, leading to a half-dozen strategic priorities and also to greater mission alignment throughout the organization.
But what if you’re a CIO who hasn’t yet figured out how to partner with your CFO to power transformation? We convened a CIO roundtable to discuss these budding partnerships and how to facilitate them. Three key lessons emerged:
“Getting to that next level of relationship with the CFO is really about not just understanding their initiatives and priorities but understanding – and helping them understand – how technological investments have a broader impact and can make a difference to our bottom line,” said Greg Moore, CIO of KB Home. When that meant explaining to his CFO how a four-year transition from on-premises data centers to a cloud-based system, Moore took an educational approach, demonstrating “the different values that we could bring to the business by transforming and moving to this cloud infrastructure.”
As Angela Yochem, Novant Health’s Chief Transformation and Digital Officer, put it: “We need to encourage our CFOs to take a deep dive into understanding the technology estate that powers their business.”
And critically, we have found in our work with teams from the c-suite on down, education leads to empathy – which leads to getting stuff done.
Too often, CIO-CFO relationships are purely transactional – you need something, so you ask for it, possibly striking a deal to get it. But real partnerships require a deeper connection. “It always starts with empathy and understanding what the frictions are with those individuals and working on them to develop that strong relationship,” explained Joseph Cevetello, Santa Monica, California’s CIO.
Speak the CFO’s language: Couch your educational efforts, for example, in terms of value to the company. By focusing on that rather than cost, you can invite the CFO to co-create a methodology to identify and quantify that value creation in the business plan.
Building that kind of rapport requires intentionality. “Conversation leads to opportunity, opportunity leads to impact,” Yochem noted. But you shouldn’t rely solely on random water cooler-driven connections. “You have to spend the time,” said Chapman University CIO Helen Norris. “It’s the currency.”
Lead on transformation
The roles of both technology and the CIO have dramatically changed in recent years, a process which the pandemic catalyzed but didn’t originate. “CIOs are now transformational, as opposed to being in charge of a cost-center,” said Technicolor’s Girish Naganathan. “They are strategy enablers rather than cost controllers.”
Own that change and ensure others understand it, especially the CFO. Not everyone has grasped that fundamental evolution so CIOs need to demonstrate it – while acknowledging that it also brings challenges. “Both CIOs and CFOs today are inherently different than they were five years ago in terms of competencies,” said EY’s Sarah Francis. “Leaning into that in terms of the vulnerability, we have seen, is huge.”
It’s an opportunity to both build empathy and educate – and demonstrate both that CIOs deserve a seat at the planning table and that they are natural partners for CFOs.
Such emerging CIO-CFO alliances hold the potential for building the sort of nimble, inclusive and bottom-up business cultures which are critical in the emerging world of work. Now CIOs must follow these strategies to solidify these partnerships and launch that future.