Food for thought: CIOs as venture capitalists

man with light bulb sign

At the 2013 ACT-IAC Executive Leadership Conference, federal CIO Steven VanRoekel told the room full of agency CIOs and other IT leaders that he wanted them to be bolder and more strategic.

"I want the CIO at FAA to wake up and go to bed thinking about flight safety and not wondering about email or where am I with commodity contracts," VanRoekel said.

In the seven months since, the federal IT community has said goodbye to many CIOs and other leaders in the space, and lawmakers can't seem to come to an agreement on legislation that would enhance CIO authority. It might be time for a new approach.

A new report from Deloitte, "Technology Trends 2014: Inspiring Disruption," argues that, given the landscape CIOs face today, they need a new mindset for how they manage portfolios and do business.

"More and more CIOs, faced with disruptive forces such as crowdsourcing, mobile only, big data, and cybersecurity, are shifting from a world of known problems into one filled with unknowns," the report says. "To make matters worse, organizational governance has become more complex as barriers for other parts of the business to enter the technical arena have fallen."

Enter the venture capitalist, a business leader that the report suggests CIOs should emulate.

The biggest difference between federal CIOs and venture capitalists is the way they approach and manage risk, Deloitte Global Chief Technology Officer Mark White said. Venture capitalists, of course, invest money across a relatively broad portfolio, making multiple bets. A few will succeed dramatically, some will succeed moderately, and others fail miserably.

CIOs are not nearly as risk-hungry. They don’t want a broad portfolio with a lot of variability, White said, but rather seek the most streamlined portfolio possible.

"Venture capitalists speak in the language of business, and not in the business of technology," White said. "CIOs speak technology."

Part of the reason for the different decision-making processes is motive: venture capitalists are motivated by profit, while CIOs, especially in government, are not. But according to White, that does not mean federal CIOs can’t act like it and adopt some best practices.

The report uses Cisco CIOs as an example. That firm's line-of-business CIOs are encouraged to drive more of their investment portfolio toward change and growth.

The "better, faster, cheaper" mindset is not just applied to the business of IT-- it's just as important to the business of the business, the Deloitte analysts said.

The authors acknowledged, however, that the challenges and barriers presented by government are far different than in the private sector.

The sheer scale of government projects, combined with long budget cycles, strict compliance and policy mandates, and a slow acquisition process make it difficult for agency CIOs to respond and adapt quickly to IT changes.

"Having a VC mind-set means deciding which projects to fund, as well as which are not in the budget or simply lack an appropriate ROI," the report said. "Today, many public sector CIOs lack that authority and budgetary control, but a few pioneers are leading the way. Funding innovation with acceptable risk is never easy and, ironically, never without risk."

About the Author

Colby Hochmuth is a former staff writer for FCW.


  • Congress
    U.S. Capitol (Photo by M DOGAN / Shutterstock)

    Funding bill clears Congress, heads for president's desk

    The $1.3 trillion spending package passed the House of Representatives on March 22 and the Senate in the early hours of March 23. President Trump is expected to sign the bill, securing government funding for the remainder of fiscal year 2018.

  • 2018 Fed 100

    The 2018 Federal 100

    This year's Fed 100 winners show just how much committed and talented individuals can accomplish in federal IT. Read their profiles to learn more!

  • Census
    How tech can save money for 2020 census

    Trump campaign taps census question as a fund-raising tool

    A fundraising email for the Trump-Pence reelection campaign is trying to get supporters behind a controversial change to the census -- asking respondents whether or not they are U.S. citizens.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.