Information Systems Leadership - IEEE Xplore

IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 53, NO. 2, MAY 2006

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Information Systems Leadership Elena Karahanna and Richard Thomas Watson

Abstract—Information system (IS) leadership is a critical area for many organizations because of their increasing dependence on ISs both for operational stability and for enablement of process innovation and business strategy. IS Leadership is distinctive from leadership in general because the Chief Information Officer (CIO) is expected to combine IS technical skills with an in-depth understanding of the organization across all functions from operational to strategic. Thus, unique leadership challenges arise due to the technology/business interface. The breadth of the IS Leadership role implies that IS Leadership research needs to cover a wide range of topics concerning the role and characteristics of the CIO, the CIO’s interface with the top management team, and the CIO’s organizational impact. This essay discusses the distinctive aspects of IS Leadership, identifies the dominant themes in prior IS Leadership research, and introduces five papers on IS Leadership in this issue. Index Terms—Corporate leadership, development of technology management strategies, global issues in technology management, leadership, strategic issues in technology management, top management team (TMT) composition and dynamics, TMT decisionmaking.

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RGANIZATIONS are increasingly dependent on information systems (ISs) for seamless operational stability, innovation of business processes, and enablement of business strategy. As such, IS Leadership is an important concern in deriving IS value. Yet, our understanding of effective IS Leadership practices is limited. In fact, there is a higher than average corporate dismissal rate and shorter tenure for IS leaders compared with other top executives [1], and Chief Information Officers (CIOs) and other C-level executives struggle to understand what defines CIO effectiveness [2], [3]. Profound changes in the industry are impacting the CIO role and the potential sources of CIO value [4]. Shifts in suppliers, components, and architectures, such as the trend toward outsourcing, and the move toward service-oriented architectures, web services, and open source software, present new challenges to the nature and activities of the IS function. Further, frequent product-market shifts require dynamic organizational responses, which are enabled by agile systems. It is unclear what these developments imply for IS Leadership in general and the role of the CIO in particular. As the agenda of a recent CIO Executive Summit1 in Atlanta (December 2005) indicates, such IS Leadership concerns are of significant importance to CIOs. The agenda focused on Manuscript received January 1, 2006. Review of this manuscript was arranged by Editor-in-Chief G. F. Farris. The authors are with the University of Georgia, Athens, GA 30602 USA (e-mail: [email protected]). Digital Object Identifier 10.1109/TEM.2006.872247 1http://www.cioexecutivesummit.com/Atlanta/agenda.php

the CIO’s role in delivering value to the enterprise, on measuring and communicating to business partners the value IT generates, on the changing IT landscape, and on the partnership between CIO and top executives (e.g., CIO’s partnership with business executives, how to govern collaboration and conduct relationships with the C-Suite, translating a technical problem into business issues). In addition, CIOs struggle with the balance between operational stability for seamless service delivery and innovation that drives new value streams for their organizations. Thus, there is a need for studies to elaborate upon and enhance our understanding of specific constructs, relationships, processes, structures, and mechanisms that underlie such IS Leadership concerns. Given the pervasiveness and strategic importance of the problems confronting IS leaders, it is surprising that leadership research has received relatively little attention in the IS field. Notwithstanding the difficulties in collecting data from top executives, one possible explanation is that IS Leadership is no different from other types of leadership. As such, and given the plethora of studies on leadership, there is no compelling reason to undertake IS Leadership research and the field can rely on guidance from general leadership research. In fact, as we discuss below, leadership studies, though informative, do not adequately address idiosyncratic leadership concerns deriving from unique aspects of IS. I. GENERAL LEADERSHIP RESEARCH Leadership has been the topic of much discussion in both the practitioner and academic press. Nonetheless, despite literally thousands of studies on the topic, there is no consensus on a definition—the term is still definitionally imprecise and overlaps conceptually with related terms. This led Stogdill [5] to conclude, after a review of the literature, that there are possibly as many definitions of leadership as individuals who tried to define it. As Yukl [6] suggests, Bennis’s [7] observation on the concept of leadership is as true today as it was half a century ago: “Always, it seems, the concept of leadership eludes us or turns up in another form to taunt us again with its slipperiness and complexity. So we have invented an endless proliferation of terms to deal with it and still the concept is not sufficiently defined.” ([7, p. 259]) Notwithstanding definitional ambiguity, the leadership literature has examined leadership from multiple theoretical lenses, at varying levels and units of analysis, and with an array of dependent variables. While earlier approaches focused on the leader per se and examined leader traits (e.g., [8]–[10]), later approaches examined behaviors of leaders (e.g., [11]–[13]; see Fleishman et al. [14] for a review), characteristics and behaviors of followers (e.g., [15]), situational contingencies (e.g., [16] and [17]), as well as leadership processes (e.g., [18] and [19]).

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Leadership has been examined at the individual, dyadic, group, organizational, industry, and national levels of analysis and a number of different types of leadership have been suggested ranging from charismatic to transactional, transformational, and strategic. It is not the intent of this paper to review the many facets of the leadership stream of research. Rather, this brief discussion is intended to provide the backdrop against which IS Leadership will be discussed. While clearly leadership in IS shares many similarities with leadership in other functional areas, the nature of IS also presents idiosyncratic challenges that require studies that examine IS Leadership in its own right. II. WHAT MAKES IS LEADERSHIP DISTINCTIVE? The idiosyncratic aspects of IS Leadership stem from the nature of ISs and the role of the Chief Information Officer (CIO) in the organization. Over the past two decades, business dependence on IS has grown both operationally, as well as strategically (e.g., [4]). Information systems are ubiquitous and pervasive across all organizational functions. Digitally enabled business processes, the backbone of commerce today, are critical for interactions with the full range of stakeholders. Information services are increasingly used to differentiate offerings (e.g., OnStar by GM) and digital information is a growing consumer product (e.g., iTunes and Google). As such, ISs are a critical resource for the day-to-day operations of the organization as a whole and for each individual functional area. As well, they can be an important catalyst for strategic differentiation and competitive advantage [20], [21], since ISs can be malleable in their configuration and use and as such they can create opportunities and options that can be used to leverage strategic advantage. As the leader of a technical function, the CIO needs to have an in-depth understanding of technology and its capabilities. The business dependence on IS requires that the CIO ensures seamless service delivery and operational stability. Further, CIOs are expected to be business partners who understand the business aspects of the organization (e.g., [22]–[26]). Given that IS permeates all business functions, the CIO ideally needs to also have a holistic understanding that crosses functional boundaries. The dual technical and business orientation and the imperative holistic cross-functional view of the organization pose unique challenges for CIOs. The technical orientation challenges communication of the value and functionality of the technology in nontechnical terms to business managers across the organization (e.g., [27]). Technology is the comfort zone for most CIOs, thus the transition to a business strategist is often difficult to make. In fact, a study by Westerman and Weill [26] shows that while CIO performance was rated positively by business executives on technical aspects, such as operations and infrastructure and architecture development, it was rated below average on business criteria such as relationship management, change management, financial management, and people management. Effective IS deployment is likely to occur in the presence of strategic alignment between IS capabilities and business strategy (e.g., [28]–[30]) which requires a shared understanding between the Chief Executive Office (CEO) and CIO on the role of IS (e.g., [27], [31], and [32]). Perhaps, a complicating factor

is that nonbusiness executives have discomfort with assessing and prioritizing IS investments, understanding IS capabilities, evaluating the performance of the IS function, and evaluating the CIO’s contribution (e.g., [24] and [26]). Thus, IS leaders in organizations face a unique set of processual, structural, and intellectual challenges and opportunities in providing seamless service, transparently integrating technology across the organization and across the collaborative space with clients and suppliers, finding the right IS configuration solutions that support business strategies, forging relationships across the organization, and acting as strategic partners. As we note later in this commentary, the complexity of the environment and the breadth of required skills means that IS executives need social, political, business, and IS intelligence. This range of intellectual competencies represents a complex mix of traits and experiences that takes years to accumulate and poses challenging requirements for a successful CIO career. The strategic and operational aspects of a CIO’s role are inherently in conflict and executing and delivering on all these may pose challenges particularly in cases of conflicting time horizons or motivating values [33]. The demanding scope has led to questions as to whether a single person has the competing competencies to excel in all aspects and to suggestions on dividing the CIO role into a technology leadership role (Chief Technology Officer) and a strategic leadership role (Chief Information Officer—[34]). While leadership theories, and specifically theories of strategic leadership, can provide broad theoretical perspectives to frame the phenomenon, studies focusing on IS Leadership are required to elaborate upon and enhance our understanding of specific constructs, relationships, processes, structures, and mechanisms that underlie unique IS concerns. III. A FOCUS ON IS STRATEGIC LEADERSHIP IS Leadership has been discussed at different levels of analysis: individual, group, organizational, and national. Though definitions of IS Leadership differ across these levels, a common theme is that IS Leadership sets directions, creates commitment, mobilizes institutional, political, psychological, and other resources, facilitates action, and adapts the IS unit to fit a changing environment such that it adds value and achieves shared objectives. Thus, it embodies the assumptions underlying most definitions of leadership: intentional influence to galvanize, guide, structure, and facilitate action [6]. Though leadership at all levels is important, this special issue primarily focuses on IS Leadership at the executive level (four of the five papers focus on the CIO), or what we call IS Strategic Leadership. Coined by Finkelstein and Hambrick [35], the term Strategic Leadership refers to leadership by executives who have overall responsibility for the enterprise. It entails substantive decision-making responsibilities in that the strategic choices they make can have profound effects on organizational performance. In support, they argue that cognitions of individual executives that result from unique experiences, abilities, and values result in different interpretations of stimuli and in different behaviors and choices. Further, executive choice is as much a cognitive as it is a political and social process. Executives are influenced, informed, and constrained by their internal and external environments. As such, strategic

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TABLE I DOMINANT THEMES OF PRIOR RESEARCH ON IS STRATEGIC LEADERSHIP (ADAPTED FROM PRESTON [36])

leadership lies at the intersection of cognitive, political, and social processes. CIOs are typically members of the upper echelons of the organization and are frequently members of the top management team. Given the ubiquity of ISs in the organizational landscape and their role in enabling business strategy, a CIO can influence strategic decision making. Indeed, exercising the strategic options afforded by IS requires a strategic partnership between the CIO and the top management team of the organization. Thus, IS Strategic Leadership is likely an apt term to describe leadership by the CIO. The importance of a focus on the CIO and the development of a theory of IS Strategic Leadership derives from both theoretical and pragmatic reasons. Theoretically, there has been little empirical research on IS Strategic Leadership, and our theoretical understanding of the nature of a CIO’s role, antecedents and consequents of CIO effectiveness, antecedents and consequents of the CIO’s relationship with the top management team, the role of CIO in IS strategic alignment, and the impact of CIO on the organizational performance is limited. Table I, adapted from Preston [36], shows some of the dominant themes in prior research on IS strategic leadership. A review of the literature on IS strategic leadership shows many descriptive studies or studies that provide anecdotal evidence on the phenomenon. Such studies have collectively enhanced our understanding of IS Strategic Leadership and raised important theoretical questions for research on the topic. While there has been progress on the theoretical front, more rigorous, theory-based research would provide insights of theoretical and practical relevance. Additional theoretical development in the area can identify key dependent and independent constructs, detail the underlying causal mechanisms, and clarify the relationships. The Special Issue on IS Leadership is a step in this direction. IV. THE CONTRIBUTIONS TO THIS SPECIAL ISSUE The spectrum of IS Leadership spans from IS project teams to global IS management, and in this series of five articles, we publish articles that cover the full range. Project team leadership is the driving engine of IS success. Irrespective of the quality of the IS strategic plan, it fails without skilled project management that turns plans into systems and implements them. Thus, this review of the five articles commences by considering the article on project team leadership.

Faraj and Sambamurthy [55] examine project team success from the perspective of people rather than methodologies and tools. They focus attention on two forms of team leadership, directive and empowering, and examine their interaction with the team’s professional experience and task uncertainty. The findings suggest that this interplay is complicated, and it is not easy to tease apart the effect of various factors. Nevertheless, Faraj and Sambamurthy are able to advance our knowledge of IS team leadership. For example, they indicate empowering leadership is appropriate in the presence of high team expertise and high task uncertainty, and they confirm the limits of directive IS project leadership. Any snapshot of a modern organization in action will freeze many groups in action at all levels, and one of the most influential of these teams is the top management team (TMT). The accepted wisdom is that to be effective CIOs need to be part of the TMT. There are many ways, however, in which someone can be part of the team and play a role in its deliberations. The ability of a CIO to participate effectively in the TMT is likely to be determined by what the CIO brings to the boardroom. Based on a survey of CIOs and TMTs in the healthcare industry, Smaltz et al. [44] report on the factors that contribute to CIO effectiveness and the six CIO roles. Not surprisingly, Smaltz et al. report that effective CIOs have strategic IS knowledge. You cannot play the game unless you know how to play your position. There are, however, more general management skills that CIOs need to have: business knowledge, interpersonal communication skills, and political savvy. The latter two skills are perennial must-haves for all executives, and indeed evolutionist conjecture, the Machiavellian hypothesis that the humans have developed sophisticated information processing capabilities because of the inherent complexity of human interaction [56]. If we broadly interpret Smaltz et al.’s findings, CIOs need four types of intelligence: political, social, business and IS. Furthermore, these fundamental skills need to be blended, and applied in a way to build trust between the CIO and TMT. As IS scholars, we need to learn more about IS intelligence. What is it? Can we measure it? A possible starting point is the work on Information Orientation [57]. The identification of six CIO roles (business strategist, integrator, relationship, architect, utility provider, information steward, and educator) echoes Mintzberg’s [58] foundational work on executive work and opens up several research opportu-

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nities. First, we need to learn how CIOs can effectively perform each of these roles. Different skills and modus operandi might be required for each role. Second, we need to learn how the execution of these roles is affected by national culture, and thus how they must be modified to fit cultural differences, which is the direction taken by Preston et al. [59], as discussed later in this editorial. Co-alignment of organizational and IS goals is generally viewed as critical for the success of both the organization and IS, particularly in the information intensive service economy of developed economies. A key factor in achieving alignment is the emergence of a shared understanding of the strategic direction between the IS leader and the TMT, which can be developed by knowledge exchange mechanisms and the relational similarity between the CIO and TMT [32]. Relational similarity, as used by Preston et al. in this issue, is based on common interests and experiences, and functional background. Another approach is to examine the cognitive coherency between TMT members and IS executives, which is the path taken by Tan and Gallupe [60]. Building on the contention that there are two foundations to alignment, social and intellectual [28], they direct their attention to the social dimension. Tan and Gallupe report a strong link between business and IS alignment and shared cognition between business and IS executives. High alignment corresponds to a coherency in the core beliefs of business and IS executives in that enterprise. They contend that a high level of shared cognition leads to more effective decision-making. Given the centrality of decision-making in modern organizations [61], this is an important outcome which raises the question of how firms can create high levels of shared cognition. Other research indicates that collective cognition is created by opportunities for executives to interact, and Tan and Gallupe discuss actions that enterprises can take to promote this intermingling. The success of these cognition development encounters will, we believe, be to some extent dependent on the capacity of the culture in which these interactions occur to facilitate a free exchange of ideas. Thus, some corporate and national cultures might inherently have advantages in this respect. Fortunately, in this series of papers on IS Leadership, we have an article [59] that explores the impact of national culture on IS Leadership. In the second age of globalization (the first was the British Empire), CIOs are important players because they create and manage the infrastructure that strings businesses, employees, and customers together to transact commerce. In order to create such infrastructures, CIOs need to translate a company’s strategic intent into appropriate IS investments in a timely manner. As we noted earlier, there is general agreement that to be effective a CIO needs to be part of the TMT. Furthermore, as a corporation builds its global infrastructure, the CIO with global responsibilities will interact with a number of national TMTs, as well as the corporate TMT. The global CIO will also need to be cognizant of how each of his local CIO counterparts fits into the local TMT. Thus, if we are to inform CIOs on how to be more effective members of the TMTs, we need to also advise them on cultural differences that might affect team membership and their role. The article by Preston et al. [59] is a first step in adding a cultural dimension to our knowledge of how TMTs develop a

shared understanding of the organizational role of IS. By integrating culture into their analysis, Preston et al. are moving in the direction of building a robust theory that can escape the parochialism the enchains so much of management theory [62] and causes expatriates to stumble so frequently when outside their native cultural zone. An important finding of the Preston et al. study is that in both France and the U.S., it is important for the CIO to manage expectations. This consistency across two cultures is reassuring because it potentially gives IS leaders something to grasp that they can apply widely. If we can discover more culturally invariant factors, and clearly we cannot make this generalization for managing expectations without further research in a range of cultures, we can educate CIOs in a core set of skills that can be widely applied in a global setting. A more challenging outcome, in terms of global CIO effectiveness, is to learn that there are few common behavior patterns and that the nomadic CIO has to learn a different set of behaviors for each TMT. The study finds that this might be the situation as the article indicates that differences in power distance between France and the U.S. affects the development of a shared understanding within the TMT. Thus, while CIOs learn that managing expectations is important across two cultures, the way they go about it should be adapted to reflect cultural differences. From our conversations with the authors, we know that the Preston et al. article is the first report of a range of cross-cultural tests of their theoretical model. The ultimate outcome of such a program of research can be a set of guidelines for global CIOs instructing them on how to adjust their behavior and expectations of others in different cultures based upon their home culture. Clearly, such a guidebook would be of considerable practical value to IS leaders, but there is much to be done before such precision can be achieved. This CIO guide could also incorporate knowledge about how to play different CIO roles in varying cultures (extending Preston et al.’s work to different cultures and industries). Indeed, the potential value of this line of IS Leadership research emphasizes the dearth of work in the area. We need to know much more before we can safely offer a set of generalizations that CIOs can deploy with reasonable success. Personal characteristics, as well as national culture, can influence the behavior of the CIO. We can aim to provide guidance for the CIO on how to behave in certain settings, but we also need to help CIOs learn how their innate beliefs and behaviors influence their effectiveness. We can think of this as the CIO angle on nature versus nurture. It is the nature of some CIOs, determined by their personality traits, to be more innovative in their deployment of IS [54]. The importance of Li et al.’s research is very clear. The CIO, and that person’s personality, can have a major influence on the IS unit, its role in the organization, and thus the performance of the organization. If an organization wants to be a leading edge adopter of IS, then it should limit its pool of possible CIOs to those who demonstrate openness and extraversion. Li et al. note these are characteristics that tend to be long lasting. Thus, an organization’s whose mission for IS changes might well find that it also needs to change its CIO. Li et al.’s findings extend a point mentioned earlier. The CIO needs political, social, business, and IS intelligence, but

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the CIO’s blend of these intelligences has to been combined with a personality that matches the organizational environment. An inherently multi-intelligent CIO might only act intelligently when in the right setting. We conclude our review of the five published articles by observing that they demonstrate that IS Leadership is more than general leadership because it requires an extra dimension, IS intelligence. Of course, one could state that all C-level executives need an extra dose of intelligence (e.g., the CFO needs financial intelligence), but our experiences, and perhaps our biases, suggest that IS intelligence is of a higher order because it is profoundly shaped by and shapes the operational stability and innovation capability of organizations in complex and dynamic environments. V. CONCLUSION We were fortunate to attract a set of papers that covers a broad tract of IS Leadership issues from several directions. Collectively, they provide a launching pad for future IS scholarship because they provide multiple theoretical foundations and identify gaps in the extant research. This is exactly the outcome that we sought when we proposed that the IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT have a special issue focused on IS Leadership. We believe that this important and critical dimension of IS success needs deeper and broader investigation because there is clear evidence of the paucity of IS Leadership knowledge. We thank the authors for helping us to realize our goal, and we urge readers to join the collective endeavor of building a body of IS Leadership knowledge to guide IS leaders to better decisions and performance. REFERENCES [1] J. Karimi, Y. Gupta, and T. Somers, “The congruence between a firm’s competitive strategy and information technology leader’s rank and role,” J. Manage. Inf. Syst., vol. 13, no. 1, pp. 63–88, 1996. [2] H. Liddell, C. Rustein, and J. Lynch, “Measuring CIO effectiveness,” Forrester Research, 2005. [3] B. Lieberman, CIO—A CEO’s Untapped Strategic Arsenal. Westport, CT: Halbrecht Lieberman. [4] J. W. Ross and D. F. Feeny, “The evolving role of the CIO,” in Framing the Domains of IT Management: Projecting the Future Through the Past, R. W. Zmud, Ed. Cincinnati, OH: Pinn Flex, 2000, pp. 385–402. [5] R. M. Stogdill, Handbook of Leadership; A Survey of Theory and Research. New York: Free Press, 1974, vol. viii, p. 613. [6] G. A. Yukl, Leadership in Organizations, 5th ed. Upper Saddle River, NJ: Prentice-Hall, 2002, vol. xix, p. 508. [7] W. G. Bennis, “Leadership theory and administrative behavior: The problem of authority,” Admin. Sci. Quart., vol. 4, pp. 259–260, 1959. [8] D. C. McClelland, Human Motivation. Glenview, IL: Scott, Foresman, 1985, vol. xii, p. 663. [9] B. M. Bass, R. M. Stogdill, and R. M. Stogdill, Bass & Stogdill’s Handbook of Leadership: Theory, Research, and Managerial Applications, 3rd ed. New York: Free Press, 1990. [10] S. T. Zaccaro, D. A. Kenny, and R. J. Foti, “Self-monitoring and trait-based variance in leadership: An investigation of leader flexibility across multiple group situations,” J. Appl. Psychology, vol. 76, no. 2, pp. 308–315, 1991. [11] R. M. Stogdill, O. S. Goode, and D. R. Day, “New leader behavior description subscales,” J. Psychology, vol. 54, pp. 259–269, 1962. [12] R. Likert, The Human Organization; Its Management and Value. New York: McGraw-Hill, 1967, vol. ix, p. 258. [13] V. Vroom and P. Yetton, Leadership and Decision-Making. Pittsburg, PA: Univ. Pittsburgh, 1973. [14] E. A. Fleishman, “Taxonomic efforts in the description of leader behaviors: A synthesis and functional interpretation,” Leadership Quart., vol. 2, no. 4, pp. 245–287, 1991.

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Elena Karahanna received the B.S. degree in computer science and the M.B.A. degree from Lehigh University, Bethlehem, PA, and the Ph.D. degree in management information systems from the University of Minnesota, Twin Cities, with specializations in organization theory and organizational communication. She is an Associate Professor of Management Information Systems (MIS) and Director of International Business Programs at the Terry College of Business, University of Georgia, Athens. Her work has been published in the IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, Management Science, MIS Quarterly, Organization Science, and elsewhere. Her current research interests include the acceptance of information technologies, IS Leadership, and cross-cultural issues. Dr. Karahanna currently serves as Senior Editor for MIS Quarterly and the Journal of AIS, and serves or has served on the Editorial Boards of Information Systems Research, the IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, the European Journal of Information Systems, and Computer Personnel.

Richard Thomas Watson received the B.Sc. and Dip. Computation degrees from the University of Western Australia, Perth, Australia, the M.B.A. degree from Monash University, Victoria, Australia, and the Ph.D. degree from the University of Minnesota, Twin Cities. He is the J. Rex Fuqua Distinguished Chair for Internet Strategy and Director of the Center for Information Systems Leadership at the Terry College of Business, University of Georgia, Athens. He worked for private and public companies before pursuing an academic career. He is the immediate Past President of the Association for Information Systems, the major academic society for IS faculty, and was Co-Conference Chair for the 2004 meeting of the International Conference on Information Systems, the preeminent IS conference. He has served as a Senior Editor for MIS Quarterly, the leading IS journal. He is a consulting Editor for Wiley, and a Visiting Professor at Agder University College, Norway and Fudan University, China. His most recent research focuses on IS Leadership, the business of open source, and net-based customer service systems.