enterprising, adj.: marked by imagination, initiative, and readiness to undertake new projects
entrepreneurial, adj.: willing to take risks in order to make a profit
-- Source: wordnet.princeton.edu
This week Gartner Inc. released research suggesting the best CIOs now are "entrepreneurial." That is, by 2012 the companies with the top 25 percent of earnings growth will have such a CIO.
So far, much has been said about the enterprising CIO: the one with vision, the one who gets out there and talks plain-English business with executives in other functions, the proactive CIO. As you can see from the definitions above, there is a big difference between enterprising and entrepreneurial. The latter definition notably includes risk-taking and profit. The analysts at Gartner also note this difference. According to a statement from the IT advisory firm, "the distinctive feature of the entrepreneurial CIO is the proactive willingness and courage to take the high-level risks also undertaken by the business, to provide new or breakaway competitive advantages that translate directly into revenue, financial results and market share [emphasis added]."
This is not to suggest that to be enterprising is in the past. After all, it takes an enterprising mind-a creative, proactive thinker-to be entrepreneurial. Think of it as "enterprising 2.0."An entrepreneurial CIO is an enterprising CIO that takes risks. As Gartner puts it, these CIOs have a "willingness to apply the highest level of creativity available...to do things in a fundamentally different way...setting new levels for IT productivity. It comes with the understanding that the business may fail in the attempt, but also that it will surely fail...if it does not act [emphasis added]." Those are fighting words in a risk-averse business environment practically traumatized by the recession.
Deborah Lovell, who just stepped down as president of the Association of Information Technology Professionals, agrees that this is a bold challenge. "CIOs have to understand that IT isn't just a cost center; it has to turn a profit," she tells me.
How many CIOs are up to this? Gartner says its CEO research for the past six years has shown-each year-that IT has been a constraint to the changes they need. "IT has to align with the rest of the business and be a trusted advisor to provide the right solutions that grow revenue," says Lovell.
Other findings from the Garner research: The chief focus of entrepreneurial CIOs is "new-business impact," which is manifested by:
- Velocity of change - the ability to influence the velocity of change through the structure of the business, so that a change in strategy can be implemented at a rate that outperforms all other competitors, and, therefore, also draws revenue at an earlier time and at a rapid pace. Improvements in this area lead to gaining competitive advantage quickly in new markets with new offerings.
- Strategic leverage and extension - capabilities that extend strategy for the enterprise to new markets, new industries and new uses, and that lead to growth in revenue against entrenched and new competition.
- Operational efficiencies - efficiencies that improve operations to gain breakaway competitive advantage that further increase the rate of revenue and earnings growth. Gaining an improvement that is a factor of 10 or more is key to establishing true competitive advantage in the area of operational efficiencies.