One of the recurring questions I hear often from CEOs, CFOs, COOs and occasionally the HR Director of small to medium size companies is: What is the difference between a CIO and an IT Director/Manager? This question is almost always followed by: And how do I know which one I need? This blog post will focus on providing some insight into what the differences are between these two roles. Part 2 of this blog will address the second question of determining which one your company needs.
Like any organizational or HR question, it is hard to pin down an exact answer that defines the difference between a CIO and an IT Director/Manager. A quick search on the subject shows that the answers are all over the board; opinions vary so widely that I anticipate if you asked ten people, you may well get twelve different views.
The other difficulty here is that job titles tend to be greatly varied, and are often not a true indicator of whether or not the company has adopted a true CIO position within their organization. I have found that, regardless of title, companies tend to fall into either the “IT Director/Manager” model or the “CIO” model. Their behaviors and the way they look at IT, rather than the job titles they use, will position them into one of these models.
Behavior #1: Tactical versus Strategic Focus
One of the most common differentiators is that the “IT Director/Manager” model tends to focus more on the tactical aspects of IT, whereas a “CIO” model tends to focus much more on the strategic. One role focuses more on daily operations; “keeping the lights on,” making sure everyone has a laptop, email gets delivered, and the Intranet is up. Whereas the other focuses more on long-term objectives; “growing the business” by making IT a key differentiator in the marketplace, or establishing a nimble application infrastructure that cost-effectively scales to swings in demand.
Behavior #2: Departmental or Enterprise Function
Organizations which have adopted a “CIO” model often refer to IT as an enterprise function and see it as a true line of business that provides empowering services to all other lines of business. These organizations often see a much deeper involvement by their CIO in areas like business planning, marketing and business development, and often have business specific goals embedded into the IT group’s (and the CIO’s) performance plans. Organizations with the “IT Director/Manager” model frequently think of IT as a department whose role is delivering support services for the organization. These organizations view IT as a “cost center” and do very little to equate that cost with business opportunities or product margins within other lines of business.
Behavior #3: IT Spend versus IT Investment
The very terminology around IT budget often will indicate which model the organization is following. Organizations in the “IT Director/Manager” model typically view the IT budget as “IT spend.” They see these as dollars that must be spent to keep the servers up and the business running. “CIO” based organizations tend to view the IT budget as an investment in the company. They realize that dollars available to invest are limited, and look for the best places to invest those dollars to help grow the business. Further, companies with the “IT Director/Manager” model often have no concept of allocating the IT spend across the various line of business or services offered. Companies with a “CIO” model will understand how their IT spend is allocated across business lines or products due to the fact that they see a direct correlation between the investment in IT and margins within their other business lines.
Behavior #4: Manager vs Leader
We are all familiar with the old adage “managers focus on doing things right, and leaders focus on doing the right things.” Both of the models of the we are discussing require a balance of managing and leading, but the differentiator can be found by looking at how the models approach that balance. Since it is focused on the more tactical goal of running the business, the “IT Director/Manager” model tends to favors the manager side of doing things right and deemphasizes the leadership side of the balance. On the other hand, the “CIO” model favors the leadership side of doing the right things and deemphasizes the manager side of the balance. This allows the CIO to focus more on enterprise, strategic efforts, while delegating much of the day-to-day management to his/her staff. Of course a healthy mix of managing and leading is needed in both models, and you often find individuals in the “IT Director/Manager” roles who are excellent leaders. But the primary job focus, and the performance measures, often tend to be very much aligned to the “IT Directors” as managers and “CIOs” as leaders.
These are the key behavior differentiators that I have found, and while there are more that may be found when scrutinizing these two models, I believe that the behavior differences highlighted above tend to be the most common indicator of whether a company uses the “IT Director” model or the “CIO” model. Looking at these behavioral traits, one can often determine which model is used regardless of job title or organizational structure.
So, how do you know which one your company needs? Well, that question is very much related to where your company is in its evolutionary cycle. We will dive into that question in the next blog posting.
What do you think the key differences are between the “IT Director/Manager” model and the “CIO” model? Please share your thoughts, comments and questions below.