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The Non-Technologist CIO
I don't question that companies like State Street have had success with this formula, but it's clearly not the only way to go. At VoiceCon Fall this past year, Karen Dean director of global telecom for Black & Decker, described how her staff was able to get directly involved in development of a crucial product feature for the toolmaker (video is here; you have to register but at least we don't make you pay). Karen admitted quite frankly that her staff was leery of the project at first, but success bred added confidence.
I think it's really foolish and short-sighted to assume that IT doesn't understand the business or can't represent itself effectively to the rest of the organization. Maybe that's the case in a given enterprise; the IT culture may have developed in such a way, in which case maybe you are better off with a non-technical CIO. But I think it's just as likely that you have people with leadership potential within the IT organization who can think in larger terms, and I think this possibility is at least worth exploring before you put someone in charge who comes from outside the IT culture.
On the other hand, you can't necessarily assume that a non-IT person will be hostile to the technologists and their vision. It's very likely to be just the opposite. Any leader wants to earn the trust of the people working for her. What it comes down to is that picking a non-technical CIO is just one of many potential ways of ensuring that technology aligns with business goals in your enterprise.
We're going to take this to the next level at VoiceCon Orlando 2008 next March, with a CIO roundtable where we hope to get these executives talking about where IT fits in their business.