Why is it still so difficult for CIOs to make strategic contributions to their organizations? For more than a decade, CIOs have been urged to become more strategic. A 1999 CEO survey conducted by the London School of Economics, for example, claimed the following:

Despite CEO disappointment with past results, 48 percent of the CEOs say IT will play a prominent role in defining corporate strategy in the future. Over 54 percent of the CEOs surveyed said they had high expectations for IT’s ability to contribute to such things as a company’s competitive advantage.

And yet even with the ongoing focus on those goals, the dream of CIOs becoming strategic remains elusive. Few are able to attain it, and therefore, few derive the related benefits.

Could it be that more than a decade after the London School survey, a new definition of “strategic CIO” is needed? It might be appropriate to ask, for instance: Given the short life cycles of technology as well as the rapid pace of change, is long-term strategy still important at most businesses today? Would it be better, instead, to remain fully adaptive and flexible?

My response is: Of course, CIOs and all business executives need to be adaptive and flexible, but at the same time, these characteristics suggest that we have a course of action, i.e., a strategic direction, that we are deviating from. Otherwise, we are not learning and making course corrections toward some desired destination, but rather, we stand to totally lose our way as we adjust to every external twist and turn in our environment.

Strategy in Action

One of the best examples I have seen of a strategic IT executive was at a Fortune 150-size company in the western U.S. This individual was successful in bringing the entire executive team of the company together for a two-day off-site meeting to develop an enterprise IT strategy. By the end of this event, the executive team had identified and prioritized 12 IT projects that linked directly to corporate business goals. Most of these project ideas came from business executives and were newly developed in the session. In the months following, the IT executive was promoted to CIO and his IT budget was doubled. And even more significantly, the corporation went on to have its best year ever.

For most of its history, IT has been an operational and functional resource — not a strategic one. In the current environment, it’s more important than ever for IT organizations to shift their efforts to the strategic level, i.e., the goals of the enterprise, because this is the area of maximum value-add. In the example just cited, the operating and functional executives became convinced of the greater value of IT by assigning greater priority to it as a contributor to enterprise goals, not just by satisfying the needs of the individual business units.

Another argument in favor of IT’s focusing on the strategic level comes from viewing the enterprise as a system whose success depends on the interaction of its parts. The esteemed management writer and former dean of the Wharton School, Russell Ackoff, had explained the concept this way:

The performance of a system depends on how its parts interact, not on how they act taken separately. Therefore, when the performance of [the separate] parts are improved, it does not follow that the performance of the system as a whole will improve. In fact, in many cases, it will get worse. … The properties to be desired of the parts of a system should be derived from the properties desired of the whole, not conversely.

A Holistic Approach

In other words, using IT to improve the performance of individual business functions will not necessarily improve the performance of the whole enterprise. In fact, it may make it worse. That doesn’t mean that IT should ignore the requests coming from the business units, but as highlighted in the example of the Fortune 150 company, if we can show that the greater value of IT lies in using it to achieve enterprise goals, the operational and functional requests will increasingly have to be weighed against those choices.

Here are a few specific steps to consider in making this happen:

1. Start by being clear about your enterprise goals. Are they really long-term desired outcomes, or as so often happens, are they really means to achieving desired outcomes? If IT serves as a strategic means to another strategic means, the resulting performance can only be suboptimal.

2. How can IT creatively contribute to enterprise goals? This step will take some work. How does IT contribute to top-line growth? (See my earlier Smart Enterprise Exchange blog on this topic here.) How does IT help the company achieve greater market share? Is there some way that IT can help your customers derive greater value from the enterprise?

3. Proactively propose and market IT’s ability to make a significant contribution at the strategic level of the firm. As I noted in the previous blog, IT needs to learn from marketing how to package, communicate and promote our unique ability to do this.

Strategy is ultimately about choices. If the IT organization can accomplish the three steps noted here, the enterprise will be choosing the greater value that IT can provide for the enterprise instead of asking IT to continue its nonstrategic operational role into the future.

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Peter S. DeLisi is President of Organizational Synergies and Academic Dean, Information Technology Leadership Program, Santa Clara University.

Organizational  Synergies is a strategy consulting firm located in Fremont, Calif.  Previously, Pete spent 16years at Digital Equipment Corp.---eight of  those years as a consultant to large, Fortune 500-size customers.

He has been published in the Sloan Management Review, Harvard Business  Review, Business Horizons and Journal of Management Inquiry. He is also an internationally recognized speaker.