Article

What Today’s CIO Needs to Know

female business executive surrounded by digital dashboards
By Brad Smith

8 minutes

Execs are complementing their technical expertise with leadership competencies.

Today’s chief information officers don’t just manage IT. They play central roles in leading their credit unions—and must develop their executive skill set accordingly. 

The chief technology executive’s role continues to evolve from a focus on infrastructure—with the primary aim of making sure the trains run on time—to more consultative and collaborative responsibilities. As CUs come of age as technology companies that deliver financial services, CIOs serve as advisors to their boards of directors and function on an equal plane with executives leading lines of business. 

While the buck still stops with tech execs in ensuring that systems and networks are fully secured and performing properly, infrastructure management is table stakes today. CIOs are much more focused on connecting strategy with technology utilization. They’re spending more time co-leading strategic initiatives on digital delivery and consulting with CMOs, CFOs and COOs on the underlying technology that drives analytics and business intelligence. 

As technology increasingly powers finance, lending, payments, retail and marketing, CIOs have a highly visible seat at the strategic planning table as partners in implementing new solutions across the organization. This executive position has been in steady evolution over the past decade, and the pace of change in breadth of responsibilities has been accelerating, especially at large and midsize CUs. Toward that end, CIOs are pursuing a learning curriculum that encompasses these leadership skills.

Collaboration and Communication

The concept of management by walking around merits a refresh when applied to the expanding amount of time technology executives spend outside IT, meeting with business unit managers on project implementation, asking questions about their departments’ needs and providing big, bold leadership.

In the old days, operations managers would come to IT and say, “We need a widget. We either need approval to go find that widget, or we need your help to find or develop it.” Nowadays, IT and business unit leaders come out of strategic planning with broad, dramatic initiatives to transform the CU with better digital channels and steady improvements in the member experience across product lines. These executives engage in ongoing conversations to figure out their roles and the roles of their departments in driving these changes forward. 

The CIO takes a lead role in those discussions, in interactions with technology vendors whose products are integral to strategic execution, and in ensuring that employees buy into technology advances. Everyone needs to be thinking about how expectations for the member experience are evolving—and the chief tech exec is right in the middle of that as translator, collaborator and initiator.Those responsibilities entail staying current on what’s happening in the markets and in the vendor world, so the CIO can keep colleagues posted on what current and potential technology providers are offering and what advances competitors and fellow credit unions have launched. This advisory role encompasses listening to and working with other leaders to brainstorm, research and take direction from the board and executive team to plan and lead execution. Most technology executives have plenty of expertise with implementation, but taking a lead advisory role may constitute an emerging capability.

Effective CIOs groom their top managers to take on key responsibilities.
Brad Smith
Managing Director
Cornerstone Advisors

Chief Tinkerer and Explorer 

In the pursuit of business intelligence on the latest innovations that can be applied in member-facing and back-office operations, effective CIOs are tinkerers and explorers. They open accounts online with other credit unions and financial providers to find out firsthand how the member experience their credit unions provide compares to continually evolving market standards. 

For example, Capital One heavily promotes the ability to open an account online in five minutes or less and fund it immediately. On average across the credit union sector, the same tasks may take three days. That’s a significant difference. By monitoring the market and experimenting with other institutions’ offerings, the CIO is better equipped to guide the credit union to stretch outside its technology comfort zone and engage proactively with line-of-business leaders to identify and plug member service gaps.

IT may not own the credit union’s digital systems, but the CIO needs to be familiar with existing and potential vendors and capabilities. IT may not own every use case of data analytics, but the CIO needs to stay current on what’s going on with business intelligence and how that ties in with marketing and finance. IT may not own the marketing automation or CRM systems, but the CIO needs to be in the loop about how and how well those systems are working for the credit union. 

Once upon a time, the CIO may have been the only C-suite occupant who “spoke tech.” Today, the CIO is more likely to be working alongside a chief data officer, a marketing executive who is well versed in business analytics, and a tech-savvy CEO asking insightful questions about emerging fintechs and competitors’ innovations. In fact, technology is such an essential component of credit union operations that it’s less and less rare to see CIOs moving up to the chief executive role.

In this tech-infused environment, CIOs absolutely must be able to talk about application programming interfaces and the functionality and integration of automated systems, but they also need to spell out the business case for technology solutions and advocate for the role of technology in actualizing strategic goals. By doing so, the tech leader becomes part of strategic discussions early on instead of being invited to the table only after decisions have been made. 

Forecasting Abilities

To keep pace with both traditional competitors and emerging fintechs, credit union executive teams look to their IT leaders for predictions on the Next Big Thing. High-achieving CIOs are intellectually curious, lifelong learners. They head out to conferences—and not just those sponsored by existing vendors. They finagle invitations to conferences hosted by their vendors’ competitors, sign on for roundtables with other technology executives and wander the exhibit halls of fintech conventions. They are voracious readers of technology journals and the wider industry and business press that delve into the operational implications of digitalization, artificial intelligence and machine learning. They have a group of CIOs and COOs on speed dial so they can bounce ideas off their peers and learn from their experiences. And they commit to R&D by taking the new ideas gleaned from that research and testing them in their own IT shops and lines of business. 

To anticipate their CUs’ technology needs, these executives also check in regularly with their peers within the organization. They know exactly what’s on the wish lists of business unit leaders across digital and retail delivery, lending and payments. They share new use cases on mortgage origination systems and connect executives with prospective vendors and peers at other CUs. 

More broadly, well-informed CIOs take leadership of strategic conversations and provide regular updates on innovations worth watching. They invite consultants and guest speakers in for presentations on technology trends to prepare for strategic planning. They embrace their responsibilities to lead their credit unions toward emerging technologies. But this work requires discipline to carve out time for networking and exploration, which leads to one final set of leadership skills useful for today’s CIOs. 

IT Leadership Development and Delegation

Effective CIOs groom their top managers to take on key responsibilities. They foster a mature IT organization, so they don’t have to be at ground level, continually addressing operational problems. And they ensure their managers are engaged as part of their assigned roles and responsibilities with the opportunity to explore potential solutions for their CUs. With technology advancing on multiple fronts, the more eyes on the horizon the better. 

Leadership development entails the ability to identify which managers might be most capable of moving up the hierarchy. Some of the traits necessary for successful IT managers differ from competencies at the next level. Technology executives need to let go of their laser focus on systems, even if they put those systems in place and know them better than anyone. They need to be able to hand off those responsibilities and trust in their successors so they can move on to lead new initiatives. Not every manager can delegate effectively, nor do they necessarily want to take on broader responsibilities. By honing their leadership development competencies, CIOs can guide managers toward the career paths that suit them and the organization.  

Challenges and Rewards

In many ways, the work of credit union CIOs is more challenging—and rewarding—than that of technology executives in other organizations. Credit unions differ from other businesses and even from banks in the number of systems they rely on, which adds to the complexity of the tech leader’s role. When banking IT executives join credit unions, they are often surprised at how many more vendors and platforms are involved than in their previous organizations. CUs tend to be more willing to invest in member-facing technology than many like-size banks.

In smaller markets, it’s often hard to find experienced credit union IT leaders, so financial cooperatives may widen their talent search to executives in manufacturing, health care and other sectors. Those newcomers may find the credit union technology environment to be more diverse and complex, and they need to be able to handle the steep learning curve in coming up to speed on both the technology front and a daunting level of regulatory oversight. 

For example, tech executives who come from the health care industry may shrug off compliance questions in interviews, noting their experience in dealing with HIPAA regulations—only to recognize soon in their new positions the enormity of the challenge before them. 

For both experienced credit union CIOs and those new to the movement, developing such competencies as delegation, communication, collaboration, plus research and development capabilities can help them embrace their leadership roles as they seek out and share fresh ideas to keep their organizations on the forefront of member experience and operational efficiency. cues icon 

Brad Smith is a managing director with CUES Supplier member and strategic provider Cornerstone Advisors, Scottsdale, Arizona.

CUES Learning Portal