CFOs and chief information officers don’t always see eye to eye, even on vital matters like risk management and cost control. But there may be more common ground between them than is typically thought.
That is important, because identifying areas of agreement can create a platform for more-open discussion of conflict areas, says Judith Glaser, CEO of Benchmark Communications, which works with businesses to improve relationships between sales forces and customers, managers and employees, and other linked stakeholder groups.
Recently Glaser has been looking into communications between CFOs and CIOs. Based on their similar views on some key facets of their relationship, she sees plenty of hope for creating deeper levels of understanding between them. But doing so requires overcoming a big barrier: that “old attitudes or interpretations about one another keep coming up even when people are making progress.”
For example, during a recent seminar hosted by CFO Conferences, several finance chiefs said, both in private discussions and in open sessions, that they’re often exasperated by CIOs’ lack of attention to business fundamentals and prudent risk management. “They’re always coming up with capital-intensive programs that are essentially faith-based initiatives,” said one CFO. “The projects are not well supported with metrics, but they want to run off and take the risk.”
CIOs, for their part, may view finance leaders as excessively conservative and out of touch with the big picture; namely, the potential for technology investments to transform a company. To many CFOs, IT is just “a mystery,” one CIO said at the conference.
Finance and IT executives rarely discuss such conflicts with one another, according to Glaser; instead, they tend to “get together with their cohorts and complain” about the other group. That is true for many business relationships, she adds. It’s why she prefers to use a survey format that asks groups to rate aspects of their relationships with other groups, rather than rate specific attributes and behaviors of another group. The approach is designed to allow the true areas of alignment and misalignment to emerge.
Glaser recently developed such a survey for CFO in collaboration with Liminal Group, a partnership of executive coaches and organizational consultants she belongs to. The 57 CFOs, 12 CIOs, and 43 other assorted finance and IT executives who participated were asked to rate their level of agreement with 27 statements on a scale of 1 (lowest) to 7 (highest). Each rating was assigned a value, from 0 for a 1 rating to 100 for a 7 rating, to create a mean response to each statement on a 100-point scale.
The low number of participating CIOs means their answers cannot be generalized to all IT executives. Still, Glaser says the results corroborate views she’s developed from having coached “dozens” of CFOs and CIOs over the years.
One striking finding was that the IT side has a rosier view of the relationship than the finance side does. The highest mean score for any statement was the 92 the CIOs gave to “We have a high level of respect for each other.” CFOs selected the same statement as the one they most agreed with, but the mean score was only 80.
At the other end of the spectrum, the lowest CIO score was 72 for “We jointly address the obstacles to the execution of our technology strategy.” On the CFO side, the least-agreed-with statement — “We have a high level of agreement on the resources needed to realize our strategic goals.” — garnered a score of just 61.
The fact that CFOs are more critical of the relationship underscores their attention to detail, says Glaser. “Being precise is in their nature, versus the big-picture nature of the CIO,” she says. “The CFO is probably going to scrutinize the relationship for perfection and therefore will have a higher standard for what ‘good’ looks like.”
Yet there was a significant degree of alignment in terms of the statements that received the respective groups’ higher scores. In addition to the mutual respect, both groups strongly agreed that they have a shared understanding of the current business environment, openly share information necessary to successfully execute technology strategies, and have a high level of trust in one another.
Both groups also gave low scores to some statements, including “We jointly address the obstacles to executing our technology strategies” and “We have a shared sense of urgency for implementing our technology strategies.” Those are areas that obviously need some work.
It’s not surprising, though, that the two groups had a number of markedly differing perceptions. The statement about agreeing on resources for strategic goals, which CFOs ranked dead last, came in at 13th out of the 27 statements in the CIOs’ view. Even more divergent were their assessments on whether they communicate sufficiently about the challenges to executing technology strategy: the IT execs gave that statement their 6th-highest score, while the finance chiefs ranked it 25th.
Statements to which CFOs gave high scores and CIOs low ones included “We have a high level of agreement on the approach to innovation needed to be competitive in the marketplace” and “We know what we need to do in our respective roles to implement our technology strategies.”
The key to easing the discord is gaining an appreciation for the areas of concurrence, according to Glaser. “What I try to do is first measure the agreements people have so they can celebrate successes around those, and then build on that by putting the conflicts on the table so they don’t become toxic,” she says. From there, perhaps, CFOs and CIOs can learn to make beautiful music together.