The rise of the chief transformation officer

The rise of the chief transformation officer unknown The rise of the chief transformation officer  CIO

As a new leadership role emerges to spearhead broad-scale business transformation, IT leaders continue to make a mark driving digital change — regardless of title.

CREDIT: INSTA_PHOTOS / SHUTTERSTOCK

Like so many IT leaders, Richard Wiedenbeck wears multiple hats. Yet unlike his peers, Wiedenbeck’s dual roles — the top technology executive as well as the transformation lead at Ameritas — are often at odds.

As chief technology officer, Wiedenbeck is driving automation and IT modernization to reduce complexity and technical debt. In his chief transformation officer (CTO) capacity, the current mission is to spearhead an enterprise transformation effort that takes aim at operational efficiency. To hit both marks, Wiedenbeck is intentional about separating the roles. He’s also made compromises on the digital agenda to advance larger enterprise transformation goals.

“I really do think about the two roles differently,” says Wiedenbeck, senior vice president and chief technology and transformation officer (CTTO) for the financial services and insurance company. “I don’t think of it as an extension of the CIO job, but rather as a separate role to ensure we achieve transformation. The good news is I can talk to myself to reset objectives.”

AMERITAS

Not every leader is ready or willing to self-referee complex trade-off discussions. But a growing number of companies are game for formalizing a position devoted to oversight of large-scale transformation efforts and sometimes that role is being filled by the CIO.

While transformation of business processes, revenue models, and organizational structure has been ongoing for some time, the past few years have seen accelerated change. The technology front has been particularly active as new digitally enabled services, experiences, and workflows went live to keep revenue flowing and businesses operational during the height and in the aftermath of the pandemic. Close to two-thirds (61%) of respondents to Foundry’s 2022 Digital Business research confirmed the global pandemic forced their organization to formulate and execute a digital-first strategy. By 2023, 93% of responding organizations said they have adopted or planned to adopt digital-first business strategies, continuing the transformation wave.

“It’s not that this work hasn’t been done before by anyone else, but because the change activity is so rapid now, companies feel the need to create a role that sits at the helm of that change activity,” says Angela Yochem, a multi-industry CxO, who recently served as chief transformation officer at a major health care provider. “Anything that is truly transforming the business, not just modernizing, streamlining, or optimizing it, probably requires someone to look after that significant change.”

Designating a formal chief transformation officer role to shepherd that work or making it the jurisdiction of another C-suite executive will depend on the company and the scope and duration of the transformation agenda. Because technology and digital business initiatives have been at the heart of accelerating change efforts these past few years, IT leaders have stepped into the role, many without the official title. Eighty-three percent of IT leader respondents to the 2023 State of the CIO study said the transformation aspects of the CIO role remain front and center, and 84% said they are more involved in leading digital transformation compared to other business leaders. More than half (61%) of those surveyed confirmed they now have business strategist responsibilities, function as a consultant and strategic advisor to the business, and define their role as changemaker, the latter cited by 85% of IT leader respondents.

“Given the outsized influence advanced technologies have on the evolution of business models, it makes sense for the CIO to also put the transformation hat on,” Yochem says. “If the nature of the transformation is more about expanding the addressable market, maybe it’s someone else entirely.”

ANGELA YOCHEM

The transformation chief’s charter

In Yochem’s case, prior to being appointed chief transformation officer, she served as chief digital officer for the health care provider with responsibilities for the technology, cybersecurity, and data groups, the digital health line of business along with a mandate to explore unconventional revenue opportunities. While she wasn’t directly vying for a CTO role, Yochem says she did deliberately steer her career towards business strategy and revenue responsibilities. That expanded remit and enhanced visibility made her a natural choice for spearheading enterprise transformation efforts.

“So much of the new growth and transformation of healthcare as an industry was happening in the spaces I happened to own; it made sense to combine the CTO and chief digital officer responsibilities,” she says.

Taking the official CTO mantle didn’t necessarily change Yochem’s charter or her day-to-day responsibilities. She says the title change was more about establishing the importance of the transformation agenda and eliminating any possible constraints that are typically associated with the CIO or tech-specific roles. “Part of what happens to CIOs is that some executives put them in a box and question why they would talk about something other than IT,” she explains. “The title change makes it culturally okay to have conversations outside of IT. Digital was the key to the transformation, and [the CTO role] was a statement about that.”

Wiedenbeck took the transformation reins in 2022 after spending more than a decade overseeing the IT organization and technology strategy for Ameritas, including as CIO. The company is in the midst of an enterprise overhaul to drive operational efficiency, not just from a technology perspective, but across business processes and organizational structure. Wiedenbeck, who had deep expertise in business strategy and operations, was tapped to be the transformation chief and he made the case to maintain both set of duties in a combined CTTO role instead of leaving the CIO post behind.

Wearing the transformation officer hat, Wiedenbeck plays the role of influencer, working all corners of the organization and the C-suite to make sure process changes, workforce culture, and the company’s digital readiness are aligned and moving forward to meet transformation objectives, which in this case is improving operational efficiency. As CIO, Wiedenbeck is committed to modernization and reducing technical debt. Sometimes the strategies are at odds.

“The automation Ameritas needs to drive optimization towards the future state may be less than perfect,” he admits. “It can’t be about absolutes — you have to balance the needs of the enterprise with the needs of IT.”

In addition to influence, transparency and accountability are critical to Wiedenbeck’s change management playbook. On his watch, the company established a change management office entirely focused on problem solving and advancing transformation efforts. The change management office, and the transformation officer part of Wiedenbeck’s mandate, is wholly focused on ensuring the broad transformation goals are advanced every step of the way. As part of this set of duties, Wiedenbeck spends his days clarifying objectives, affecting and aligning the scope of work, and helping people prioritize the decisions that ensure the transformation efforts are not only executed, but have lasting traction.

While most modern CIOs are adept at the technical domain and have polished their business savvy, understanding the process improvement domain, the reengineering of work patterns, and the people side of change management are what really set the transformation aspects of the CTTO apart from what’s required from the typical IT leader.

“The people, process, and technology moniker gets brushed over, but as transformation officer, you have to have competency in all three with enough depth to extract value out of the role,” Wiedenbeck says.

CIOs’ organic role in transformation

Some CIOs with robust transformation agendas have little interest in crossing over to a formal CTO role. Take Katrina Agusti, who as CIO at Carhartt has played an active part in leading transformation initiatives, including a rethinking of the go-to-market calendar, expansion of the distribution network, developing end-to-end customer journeys, and the shift towards more sustainable products and packaging. When the executive tasked with setting up a transformation office left the company several months back, Carhartt’s top executives reached out to Agusti to see whether she would stand up the office and have oversight of the efforts until they brought in a replacement.

CARHARTT

Agusti believes she was sought out for the transformation role because of her long tenure at the company (20 years) and her past achievements advancing business strategy and working with cross-functional teams on change management. As an IT chief, Agusti says she also shares a lot of the same competencies and characteristics as transformation leaders, including the ability to understand business direction, evaluate tradeoffs, assess organizational readiness, and broker difficult discussions between different functions.

“We in IT have led so many projects without the name of transformation, we’ve built the trust and credibility to take this on,” she says.

Even so, Agusti says she has no interest in serving as CTO long term, and doing both roles, in her view, does a disservice to the transformation office.

“This can’t be a side gig — it has to be a focus and I can’t do that consistently on my own due to other priorities,” she adds.

SAIC

While there’s certainly overlap between the functions, most CIOs see their responsibilities and career tracks as complementary to the CTO charter as opposed to direct conflict. For example, while the CTO focuses on organizational, market, and change management challenges, the CIO’s charter most often zeros in on the digital piece — a delineation that typically rules out any significant turf wars.

“I see the roles complementing each other if it’s set up correctly,” says Nathan Rogers, senior vice president and CIO infrastructure enablement at SAIC, a technology integrator. “Whether reporting to the same person or at the same level, if they’re strategically aligned, it’s a powerful combination.”

Sri Adusumilli, CIO at Truckpro, is accountable for all the digital aspects of transformation happening at the independent distributor of heavy-duty aftermarket truck parts and accessories, working in concert with the vice president of corporate initiatives who oversees the work from an organizational structure and cultural standpoint. Truckpro hasn’t appointed a formal CTO, and Adusumilli says he sees the role as more transient as there are limited large-scale transformation efforts a company will undergo in its lifetime.

“The CTO is a time-bound role,” he claims. “You don’t change your culture or your operating model every few years.”

TRUCKPRO

Regardless of whether he or any other IT leader aspires to hold the CTO title ultimately is irrelevant, Adusumilli contends, because CIOs are already doing the heavy lifting of orchestrating transformation.

“CIOs are already transformational executives if they’re doing their jobs,” he says. “I’m not looking to become a transformation officer because I believe I already am.”