A company’s IT “stinks”, how much responsibility belongs to the CEO?

All good comments, I thank you for your input.

To make my point a little clearer:

1. I don't think Mark Hurd was commenting on the quality of the CIO's management skills, that's a separate issue, one which I've encountered many times. One CIO I replaced working for a $2 billion technology company was their Oracle Sales person immediately before becoming the CIO. Yep, there were some CIO management problems there. But, even in this case you have to ask yourself, "what was the CEO thinking?" The CEO, who was also the founder, was sent home by the board two months later.

2. The point I'd like to make is lets assume that the CIO and his/her staff are doing a superb management job; if the CEO isn't owning and leading the prioritization discussion, then typically the biggest bully, especially the CFO if the CIO reports there, gets resources based on organizational pull rather than corporate need.

I've fought this battle many times, even to the point where one CEO, one of the best I've ever met, threatened to terminate my contract if I suggested one more time that the new CIO ( I was the interim) should report directly to him.
I made the point one more time, didn't get sent home and he agreed to have the new CIO report to him. When we hired the new CIO, he had a completely clear priority list and reviewed it weekly with the officers committee. There was no place left for the bully's to hide.

It's not uncommon to find the CIO reporting to the head of "Shared Services". That's OK as long as the CIO is present at the priority discussions. Now the CEO can hold the Shared Services head responsible, but the CIO still has a clear path to follow.

I suppose that this all sounds to simple, well, getting there isn't. BUT, once that document listing the operating expenses followed by the development projects in priority order, followed by the projects in the queue is debated to conclusion and owned by the CEO, every client we've done it for agreed, the approach was invaluable.

More thoughts?

So, I believe that Mark Hurd is saying that the CEO can and should make the difference between successful IT and , well, some other kind.

I deal with director to C level employees on a regular basis regarding the IT environments. I am a complete advocate of what Mark Hurd was talking about. If the the CEO does not acknowledge that there is a huge convergance of busines and IT they are compeletly off the edge. In today's economic world IT means business. The CEO's of today have to understand the IT drives business not vice versa like the past. Much of a company's competitve advantages come from their processes, software, cutting edge technology etc... On average 60+ percent of all major capital expenditures within major thriving organizations is on IT.

A CEO needs to understand the advantage of more efficient equipment, cutting edge applications etc...and needs to align the business accordingly. Many of the companies I currently work with are starting to require IT departments to be responsible for actual business objectives and numbers rather than basic SLA's. This is something that has not been prominent in the past, but will be the standard in the future.

It's been my experience that two treatable psychological problems are the root cause of underperformance in IT organizations:

Cognitive bias, which inhibits the effectiveness of individual contributions, and
Passive-Aggressive Organizational Behavior, which suppresses effectiveness of collaborative performance.

Process, e.g.. certain aspects of "lean" Six Sigman, offers treatment for cognitive bias.

A particular management philosophy, Servant Leadership, can be used to mitigate Passive-Aggressive Organzational Behavior.

(More info here: http://psi-it.blogspot.com)

I really like Peter's response. Too often, the talk about accountability is just to assign blame, not resolve the issue.

There are instances where IT failures are the fault of IT. There are many times where the problem is an organizational one, and broader than any single department.

At the end of the day, it is up to senior management and the CEO to put processes and standards into place to quickly identify and address organizational problems, no matter where they originate.

As critical as IT is to most businesses, you'd think there'd be more attention to making sure it is working in the best interests of the entire organization, and that all other departments are likewise organizationally sound.

-ASB: http://xeesm.com/AndrewBaker
Providing Competitive Advantage through Effective IT Leadership

It is rarely the direct fault of the CIO. After all, he didn't get to be CIO by being a slacker. But, by taking the CIO position, he accepted responsibility for the department's successes and failures. He needs good people managing his teams to fix problems (and the support of the CEO). The dept. head will be blamed for department failures.

Yes, but only a few CEO realized this point and more fewer can admit it.

What's the background when Mark Hurd talking this opinion? HP's IT is over performing and HP's business is up now.

It may not be a fault of anyone in particular, more a case of aligning a common and agreed goal between the business leaders and IT. To be truly effective IT needs to be entrenched within the whole strategic and business change processes. A CIO should be part of the business leadership team. The important factor is that someone needs to own and drive this commonality within the organisation.