Nick Carr's essay blog
September 04, 2004
A hundred years ago, one of the most strategically important jobs in big companies was the manager of electricity. The incorporation of electric motors into all manner of machines and tools was transforming industry, and the companies that led the way in factory electrification often gained formidable competitive advantages. Because the technology was new and untested, an understanding of its business application was a rare and valuable talent.
But the reign of the chief electricity officer was brief. As electricity became a utility, a shared resource essential to business operations but inconsequential to competitive differentiation, it no longer required a separate staff to watch over it. It became a routine and largely invisible element of operations, marketing, product development, purchasing, and other traditional functions. Chief electricity officers disappeared, their work complete.
We are now seeing the same process play out with information technology. Once strange and expensive, computers are now mundane and cheap. Companies use only a small fraction of the processing power they have on hand, and their investments in many key software applications have reached the point of diminishing returns. The benefits from buying and installing the latest upgrade are increasingly outweighed by the costs. Information technology is becoming a commonplace element of operations and management, and as that happens the strategic importance of the chief information officer inevitably diminishes.
Max Hopper, the legendary American Airlines IT executive, saw the writing on the wall back in 1990. Information technology, he wrote then, would come to “be thought of more like electricity or the telephone network than as a decisive source of organizational advantage. In this world, a company trumpeting the appointment of a new chief information officer will seem as anachronistic as a company today naming a new vice president for water and gas. People like me will have succeeded when we have worked ourselves out of our jobs. Only then will our organizations be capable of embracing the true promise of information technology.”
The ultimate goal of IT executives, in other words, is to make IT invisible—and their own positions unnecessary. As with electricity, IT is fated to become a basic component of traditional business functions rather than a specialized resource requiring its own managerial bureaucracy.
That doesn’t mean that CIOs are going to disappear any time soon. Information technology may be commonplace in business, but it’s a long way from being invisible. The high failure rate of major IT projects—estimated to be somewhere between 70 and 90 percent—testifies to the continuing difficulty companies have in harnessing the power of this complex and rapidly advancing technology. CIOs will continue to play a crucial role in helping their companies make their systems reliable, predictable, efficient—and ultimately invisible.
It’s an important role, but it’s not a strategic role. The core challenge is not to gain your company an advantage through innovation at the technological level—IT advances spread too rapidly throughout industries to form the basis for durable advantages. Rather, it’s to apply rigorous, level-headed management to protect your company from being put at a disadvantage through misdirected investments, unsuccessful projects, and unreliable systems. The goal now is less to use IT creatively than to simply use it well.
There’s no shame in that. In fact, there may be considerable glory. The happy irony is that CIOs’ standing in the management hierarchy may well rise as they shift from being seen as transformation agents— would-be visionaries of the digital realm—to being accepted as skilled managers and valued business partners. Indeed, many of today’s most respected CIOs—people like General Motors’ Ralph Szygenda or Verizon’s Shaygan Kheradpir—are hard-headed pragmatists, skilled executives able to help their companies derive much more value from their information systems while spending much less to purchase and maintain them.
Let’s face it: The curse of exaggerated expectations has been a heavy burden for CIOs. In many cases, it has set them up to be the fall guys for sloppy strategic thinking—and led directly to their high rates of turnover. In business, visionaries tend to have much shorter tenures than good, strong managers.
Maybe now, in fact, we can finally get beyond all the abstract and largely fruitless discussions of “the CIO’s role.” There is no ideal CIO role. The appropriate role for a CIO varies from industry to industry and from company to company. Some companies don’t need chief information officers at all; for them, IT management is a routine matter of procurement and maintenance. Others need CIOs to act as trusted advisors to their CEOs; for them, IT forms the very heart of their business. And still others need IT directors who are exceptional middle managers, executives who can guide complex projects to on-time and on-budget conclusions.
In the final analysis, the fate of any senior executive is determined by that individual’s particular talent, insight, and performance. It’s the person, not the position, that matters. Great managers are strategic, whatever title they bear.
An earlier version of this article appeared in Optimize.