C-suite changes

Ambitious IT pros seek COO role

Businessman selecting a group of people.
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To effect truly strategic and visionary change, motivated tech leaders are looking at operations rather than IT.

Cynthia Hamburger spent years climbing the corporate IT ladder, including a stint as a CIO at Dun & Bradstreet, yet when she was offered the CIO post at Learning Ally, she politely declined.

It wasn't Learning Ally's nonprofit business model or smaller stature that was the turnoff, and she clearly spied opportunity for technology-driven change at the company, which provides audiobooks and services for people with learning disabilities.

The problem, as Hamburger saw it, was that the CIO role was too narrow to drive the scope of what needed to be accomplished. It was only when the company agreed to create a combined CIO/COO post that Hamburger was game to get on board.

"When I was first offered the position as CIO, I had no interest," says Hamburger, who stepped into her official role in April 2013. "When they started to add in the operational side ... it became much more interesting. This was a 65-year-old company in need of a technical reinvention. I had to have [responsibility] for enough of the business that I could control my destiny and really start the transformation process."

With technology now the cornerstone of most companies' operations, there is a growing cross-industry push to connect the oversight of IT with operations. In some cases, like at Learning Ally, the answer is a blended CIO/COO position. At other companies, the CIO is now reporting to the COO or to a hands-on CEO instead of the CFO, which had been the prevalent organizational structure in recent years due to the focus on cost cutting.

The 2013 IT Trends Survey conducted by the Society for Information Management confirms some movement as to where the CIO fits in the overall executive management suite. The study, of 650 senior IT leaders, found that 44.7% of CIOs are now reporting directly to the CEO, up from prior years, with 14.4% answering to the COO, and 27.1% under the jurisdiction of the CFO, a decline from years past.

While the actual reporting structure will vary according to a company's business goals, culture and executive skill sets, the common theme to the reshuffling of the management deck is to break down organizational silos and other barriers preventing technology from driving innovation and delivering a competitive edge.

"IT and business operations have converged in the enterprise to the point where you can't have one without the other," says Cory Chaplin, director of technology solutions for West Monroe Partners, a management and technology consulting firm. "It used to be that IT was a support function, making sure people had phones and computers. Now IT is in charge of everything from e-commerce applications to mobility. Since those things are the business ... it makes sense to have more overlapping roles."

The case for CIO/COO alignment

Having a closer CIO/COO connection, whether in the form of a new reporting structure or a combined role, makes particular sense in a couple of scenarios. Companies with a strategic mandate to effect operational efficiencies or those divesting assets as a result of a merger or acquisition stand to gain significantly from tighter alignment between these two roles, says Tim Stanley, a former CIO and COO and now president of Tekexecs, an executive advisory and consulting company.

Companies that have also made a significant operational investment in technology and have heavy lifting to do in the areas of IT deployment and change management would also be well served by fostering a tighter relationship between the two posts and their respective organizations, which historically have been run separately, he adds.

"The COO is often a ringleader and the accountable party to pull stuff together across areas, and IT by definition is the connective tissue and an enabler for getting stuff done," Stanley explains.

Richard Thomas, CIO at Quintiles, which helps drug and medical device companies through the process of clinical trials, says his direct reporting relationship with the COO was invaluable during a period of heavy transition back in the mid-2000s.

In addition to keeping up with the rapid-fire pace of change in the healthcare sector, Quintiles was transforming to become a global company, Thomas explains. That process involved leveraging a range of technology initiatives, including clinical systems, modern email and collaboration platforms and an ERP upgrade to enable new global processes.

At the time, the Quintiles CEO and company founder played more of an external-facing role, according to Thomas. The COO was a natural candidate to oversee IT since he had visibility across the organization and could control the pace at which things changed. "Working with the COO in such a tight partnership meant tradeoff decisions could be made in real time and with complete clarity on what the future would look like," Thomas says.

Trending: "CIO-plus" roles

In many cases, when IT and operations do converge, it's not a case of a traditional COO taking the reins of IT, but rather of an elite CIO stepping up. That's part of a broader trend to award the senior IT role more responsibility -- what some management consultants are calling "CIO-plus."

"The great CIOs are becoming more of an operator and view their role like a COO, thinking more broadly and recognizing their strategic perch in the corporate structure," says Peter High, president of Metis Strategy LLC, a boutique strategy and management consulting firm. "They are more likely to have an intimate understanding of other areas like human resources and the supply chain that arguably no other leader has, so it's logical for them to take that next step to COO."

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