The CIO as Strategy Officer- Again

Yesterday's Wall Street Journal contained an article discussing a new trend toward involving CIOs in company strategy deliberations and formulations. Included in this is an old holy grail of technology/operations management- the commercialization of internal IT operations as a business development function to produce revenue.

"Companies are requiring CIOs to be more thoughtful about strategy," Reynold Lewke, a recruiting partner at Egon Zehnder, is quoted in the article.

You have to read to the end of the piece to get the real message, however. Louie Erlich, formerly just CIO of Chevron, now also VP for Strategy and Services, is quoted as saying,

"The CIO title is misused, frankly. If all a CIO does is oversee tech systems, they should be named a tech manager. A CIO should be enabling a business to grow."

Mr. Erlich's statements seems eminently sensible. It also points up the likelihood that, for several decades now, "CIOs" have, in fact, been over-elevated, misnamed technology and operations managers who have not had a clue as to how to integrate their functions into the support of corporate growth and development strategies.

I saw the first run of that movie at Chase Manhattan Bank some years ago, and it wasn't pretty then. The hoped-for commercializations of internal operations never materialized. Managers were more comfortable with technology, and building walls around their fief, than they were venturing out to support and facilitate business development. That's why so much financial services innovation tends to occur in monoline startups, be they credit card, mortgage banking, hedge funds, or private equity firms.

I suspect that the moral of this story is to watch for some quasi-spectacular failures as corporations try to market their own IT groups' interpretations of how to assemble systems which their vendors are already marketing, right beside them, to other customers.

Erlich's focus on truly broadening the scope of "information" used to facilitate Chevron's strategy sounds reasonable and may potentially lead to more profitable growth and consistently superior total return performance. Trying to commercialize internal IT doesn't.