CIOs make the leap to business leadership

“I call it the internship that never ended,’’ says Levin, who eventually added CPA to his resume while working for the team.

When Boston’s Triple-A affiliate, then the Pawtucket Red Sox, changed hands in 2015, one of the new owners was looking for “a young accountant who also had an understanding of technology,” because the new ownership group was interested in building a new ballpark in Worcester, Mass., he recalls.

“That’s where being a CPA became quite handy,’’ Levin says, “because I could jump in from a finance perspective while leveraging my deep love of technology.”

This gave Levin a seat at the table to discuss financial issues, which he calls both a blessing and a curse. “We want to do some cool fan innovations, and then it’s, ‘Oh, what’s the cost implications?’” says Levin, who left the WooSox this January to take on his present gig at MLB. “But more often than not, I’m an innovator.”

MLB

The lines between IT and business roles are blurring, and it’s not as unusual to find people like Levin straddling both or IT leaders moving into pure business roles. The 2022 State of the CIO report finds that 84% of heads of IT characterize the CIO as a changemaker who increasingly leads business and technology initiatives. Seventy-six percent of their business counterparts agree, and 58% of lines of business respondents describe their CIO as a strategic advisor, up from 28% in 2021.

“The evolution of CIOs/CTOs is rapidly maturing into a strategic enterprise leader with critical knowledge across the technology ecosystem, which is core to company success,” says Craig Stephenson, managing director of the North America technology officers practice at Korn Ferry. “Some could argue that in the near future, when asked about succession, the executive with engineering, product, cloud, data, and security experience is certainly a succession candidate for roles beyond CIO and CTO. We are seeing this occur much more frequently.”

IT leaders who make the shift to business or business-IT hybrid roles frequently work in the tech industry, although that is already starting to change. “I can think of three CIO searches we worked on in the last year where the CEO, to whom the CIO would be reporting, would be looking for a successor out of the CIO function, which was different. We rarely hear that from CEOs,’’ says Dennis Baden, a partner at Heidrick & Struggles and global managing partner of the firm’s technology officers practice. All three were Fortune 500 companies, two in financial services and one in retail, he says.

Most of the evidence Stephenson has seen points to the fact that migrations tend to happen internally because tech leaders who transition to business roles are most often “known commodities.”

Even if IT leaders don’t make a full shift to the business side, more are finding themselves with revenue-generation responsibilities.

“It is likely a continuation of their current responsibilities, combined with several new challenges to further enable business value, enhance customer experience and the impact of integrated technology strategy across product, software, security, and engineering,’’ Stephenson says.

Shared responsibilities

That’s the case for Ryan Douglas, who recently transitioned to chief operations officer at ecommerce provider Digital River, after serving as CIO there for over 16 years. Yet, because the company has gotten rid of its data centers and consumes multiple public clouds, there is no longer a need for the traditional IT roles of maintaining data centers and procuring and maintaining hardware, Douglas says.

Digital River

Since Digital River is investing more in software, “we’ve pivoted the way we think about the company,’’ and are more focused on helping customers solve tech-driven problems, he says.

“So there’s a combination of an IT bent — building solutions — and an operational bent, to provide customer support services at the surface of technology,’’ Douglas says.

IT has become part of the company’s operations department and Douglas continues to oversee technology while adding customer-focused support services to his role.

The way Douglas sees it, IT “has always had one foot on the business side.” These days, technology permeates so many aspects of the business, he says, it makes sense to blur the lines between departments.

“IT supports point of sales in retail; in an internet delivery company, IT comes all the way to the surface to support customers,’’ he says. Douglas also believes IT leaders can move into business roles at non-tech companies just as seamlessly.

“Now, more than ever, that’s becoming a possibility because IT’s role is shifting,’’ he says. Whereas 10 years ago, technology was used to solve problems, as more companies digitally transform themselves, “business groups can go out and consume technology without an IT group,’’ he says.

Where does that leave IT? “My belief is IT is more consultative, and to be that you have to be more business-oriented and help other teams understand more about the technologies [they use] and the ramifications, but you’re not providing it anymore,” Douglas says. “Technology is naturally shifting to being more embedded in the business.”

Baden sees that happening too, saying that more of Heidrick & Struggles’ clients “are actually talking about getting rid of the IT function as an enterprise unit and federating it and fusing it into a line of business” that isn’t separate, “because IT is the business.

“Companies are looking for more tech-savvy business leaders and we’ll see more tech leaders moving to the business side as companies realize technology is driving a lot of their business outcomes,’’ Baden says.

He adds that this change is much more of a long-term proposition. “It would be pretty bold to dismantle an IT organization today. There aren’t any true examples of it happening in the Fortune 500.”

But just as moving to the cloud has occurred gradually over the past several years, in the next decade, Baden says, “we’ll see IT going away and being federated into the business.”

From CIO to CCO

Tim Quigley, chief client officer at CloudWave, has experience as both a client and a supplier of healthcare IT services. He previously served as CIO at Baptist Health Care in Pensacola, Fla., managing IT strategy and services for the health system.

CloudWave

Quigley was also senior vice president in the client delivery organization at Allscripts and served in leadership roles focused on delivering managed and professional services to healthcare organizations.

Spending his career working on both the vendor and client sides has given Quigley a “strong sense of what goes on,’’ he says. He decided to leave IT mainly because he didn’t want to have to move his family again and CloudWave afforded him the ability to service customers from anywhere.

“I also needed a little bit of variation,’’ he says. “One of the things I found personally was you keep running into same challenges over and over again, especially at hospitals; they’re not very big, and I found it a little more stimulating to work with multiple customers over the course of a year as opposed to one customer.”

CloudWave provides hosting and infrastructure services for mainly small, independent healthcare providers and hospitals struggling financially to attract and retain staff, especially in IT, Quigley says. “Being able to help those customers thrive and enable their delivery of care is incredibly rewarding.”

Having broad exposure throughout the healthcare industry, including time Quigley spent as a consultant, helped prepare him for a business role.

“It set me up with the ability to understand all the different areas that a hospital needs to be successful at to deliver care well,’’ he says.

From CIO to CEO to venture capitalist

Kevin Horner was the corporate CIO at Alcoa before becoming CEO of IT staffing company Mastech, whose board he sat on.

Mastech

“My goal was to run something,’’ he explains of the move, adding that “I found out I wasn’t going to get a shot at doing that at Alcoa.”

Early on, he says he learned a lot about cash. “I considered myself fairly financially astute running a services business inside Alcoa, but nobody spends time with you on balance sheets.”

Horner says he ran IT at Alcoa like an internal services business. “If you consumed services you paid for them — we charged everything back out on a per-unit basis and we didn’t butterknife it; we based it on internal cost drivers.”

He ran Mastech for about five years before leaving to become an operating partner at Three Rivers Capital, a boutique private equity firm in Pittsburgh. Horner says he has “never once” thought of being a CIO again.

“Once I started being on the business decision side, I never had a desire to going back to being staff,’’ he says.

Balancing innovation vs. cost proposition

Former Worcester Red Sox exec Levin says his finance hat came in handy when he was with the team because he was able to persuade and demonstrate from a financial standpoint why the tech innovations he introduced made sense for the long term.

For example, in 2021, the team launched a frictionless market at the new Polar Park. While he knows the pain of standing in lines at concession stands, from a financial perspective, Levin also knew that spells potential loss in food sales.

Still, “the benefit of being an early adopter is you’re able to launch an innovation, but the burden is it could be at its most expensive point early on,” he notes.

Team officials were able to build “strategic partnerships” to alleviate the cost, Levin says. “The sports industry is one that people tend to follow, so when something works, it’s easy to replicate.”

Before entering the market, fans need to download an app, and a series of overhead cameras inside embedded with AI and machine vision capture the items they want to purchase, so they can take them and walk out. “It eliminates the need to go up to a point of sale [system] or kiosk and it removes the friction aspect,’’ Levin says. He adds that rather than this eliminating jobs, cashiers now act as “ambassadors of our store to create a better experience for customers.”

Not every new technology got the greenlight during Levin’s tenure, though. Levin’s finance side was skeptical of certain innovative technologies he would like to deploy, instead vetoing them. “One thing I’d really love to do is enable fans from their mobile device to effectively use their camera as a mechanism for getting pictures onto video boards,’’ he says. But from a financial standpoint, “I’ve vetoed the concept.” That said, “at some point down the road, there’s a pathway to this.”

Skills IT needs to transition to the business side

To be any kind of effective leader, experts say, you need to be able to communicate. Levin says Red Sox Chairman Larry Lucchino gives every intern a copy of Strunk and White’s The Elements of Style.

“At the end of the day, you could be very technical or have an unbelievable mind, but if you’re not able to communicate that or write in an efficient way, it’s hard,’’ Levin says.

It’s also important to gain a good sense of the roles people play within the organization so you can get buy-in from your respective counterparts, he says.

IT leaders who want to make the transition also must understand what it means to run a business — from marketing to finance to operations — and they need to have a talent strategy, according to Christie Struckman, a Gartner vice president analyst, who conducted a 2019 study on CIOs who transition to other C-suite positions.

It’s not enough to just have business acumen, you also need business centricity, Struckman says. CIOs/CTOs learn how to manage complexity because of their environment, but they need to be able to link strategy to execution, she says.

Some of the CIOs Struckman interviewed for her study who made the transition, said their advice is to use IT as the business within a business. Also, don’t shy away from the financials and spend time with procurement and sourcing because that’s part of understanding the business, she says.

The study also revealed three things CIOs should not do. The first is: Don’t be risk-averse, which is a different approach because IT is about figuring out where to take risks so the business can innovate to enable the strategy, Struckman says.

Further, “don’t be an island,” she says. “The message was, ‘I should have worked harder on the partnering relationships,’” and spending time going on sales calls or with marketing to understand where they differentiate value, she says.

“So it’s not just working with your peer business leaders but … getting out of your space,’’ she says. “The acumen you learn from those conversations helps when you move to a role outside IT.”

Finally, don’t undervalue yourself. “No one wants to admit that … but when you’re sitting at the table and having a conversation, don’t say, ‘From a tech perspective,’’’ Struckman says. “You’re basically saying, ‘I don’t understand anything else, but here’s what it means from a tech perspective.’ It’s qualifying your language; that’s undervaluing yourself. If you only contribute from a tech component you’re staying in your box.”