The Shared Agenda for CIOs and CFOs
Why Do CFOs and CIOs have difficulty collaborating?
Over the years, much has been written on the relationship between the CFO and the CIO, and for the most part, we hear the same tired themes. You know the ones like, “My CFO just doesn’t understand technology and I don’t have the time to teach.” Or from the CFO’s perspective, “Our CIO uses a lot of technical jargon and doesn’t really understand the business.”
While we can learn about the mindset of CFOs and CIOs through these statements, focusing at this level really misses the point. Raising understanding and improving communication are important, but focusing on how to set and achieve powerful, shared goals elevates the question to, “How Can CFOs and CIOs work together to dramatically impact the business?”
In my years as an executive recruiter and coach, I’ve focused on the CFO and CIO markets for nearly three decades, and when the discussion shifts from reporting relationships and budgets to transformation and change, that’s when it gets exciting. When the CEO, CFO, and CIO truly don’t care about the reporting relationships, but instead focus on how they’ll win in a fast-paced competitive world, that’s when great things happen.
How Can CFOs and CIOs partner to win?
I like to think about the “table stakes” required to create a winning environment. This starts with the vision and strategy for the business and it has to come from the CEO. If a company doesn’t have a strong CEO and clear strategy for the business, even the best CFOs and CIOs are going to struggle. The next piece of the puzzle is the company’s culture and how leaders are expected to communicate and engage across the business. If a company doesn’t value transparency, constructive conflict, accountability, and clear decision making, once again, good luck.
While the table stakes may be universally accepted, the reality is that most businesses are making progress and are somewhere on the journey. In reality, we all are, and that’s where the first and most important requirement comes in; honesty. When CFOs admit they don’t have the answers and ask questions to learn about technology, CIOs can step in and teach. Likewise, when CIOs admit they may not fully understand the business and its key financial levers, CFOs can inform and provide data. Of course, experience, style and personality are important factors in creating relationships, but honesty is an absolute.
How Can CFOs and CIOs create shared goals?
After the table stakes have been established in a company, and the CFO and CIO have created a relationship based on honesty and respect, creating a powerful set of shared goals is the key. In any business, the company must effectively allocate resources and capital to maximize its potential. And now, arguably in every business, the company must effectively leverage technology to drive innovation and compete. At the heart of these two basic truths, the CFO and CIO should be perfectly aligned.
But as many of us know, the CFO’s agenda can be over influenced by short-term cost control pressures, and CIO’s agenda may lack grounding in fundamental ROI data. This is when the CIO begins to lose confidence in the CFO’s desire to support innovation, and the CFO gets frustrated that the CIO likes to chase the next shiny object. As a result, the CFO must effectively communicate the financial issues and opportunities for the business, and embrace change. The CIO must also understand the company’s financial constraints and strive to measure the ROI on the key pillars of the company’s IT strategy. As the CIO learns more about the financial levers in the business, and the CFO understands the return expectations associated with the CIO’s plans, that’s when the lights go on.
After all the years of talking about how to improve the relationship between the CFO and CIO, it’s time to move the dialogue to the next level. As stated in a recent Forbes Insight Report, 96% of C-level executives say that CFO/CIO collaboration is critical, and 89% say there are significant barriers that prevent it. The barriers are often cited as the CIO’s reporting relationship, the CFO’s focus on controlling costs, or CIO’s unrealistic agenda, but my experience suggests it’s about the table stakes, honesty, and the power of shared goals. If the CFO and CIO share a common set of goals aligned with the company’s strategy, grounded in financial metrics, and directly linked to the vision and inspiration for how the company is going to win, collaboration is easy!