Thirty years ago, before Internet companies such as Amazon, Google and Facebook were as ubiquitous as fireflies, midsized companies looked at information technology as a tool to run more efficiently and effectively. They weren’t thinking about building whole new digital products or services, much less whole new digital businesses. Instead, they focused on reengineering and optimizing the bricks-and-mortar business processes they had in place, using information technology to make them more efficient and effective.

Those days called for a certain kind of IT chief in midsized companies: to automate processes and run their data center. Today’s times call for a much different type of chief information officer in these firms. These are technology business leaders who work outside of their silo and collaborate across the enterprise to develop a strategic roadmap. They provide new ways of delivering value for the firm, either by creating digital products and new lines of services, or letting customers lead by purposeful support and intentional listening.

A great case in point is Andrea Markstrom, until recently the chief information officer of a 1,200 employee midsized law firm, Taft Stettinius & Hollister, and most recently at Schulte Roth and Zabel LLP. While at Taft, she spent 2 ½ years merging two firms, transforming the technology team into collaboration leaders, and building an innovation blueprint for co-creating with clients that deepens client relationships and drives revenue. Markstrom’s tenure provides guidance to every midsized company leadership team about the skills and remit of the CIO they should have in place, if not now then soon – before competitors do a digital end-run on them.

Disruption In Law Firms

Markstrom had been the CIO at larger law firms. Early in her career, she led technology groups for 15 years at Target Corp., the $106 billion discount retailer. While moving to Taft and Schulte, the focus had to change from leading as a technology CIO to now leading as a strategic, business CIO. The legal sector was being upended by digital technology and companies that used it better than the average law firm did. One was an outsourced providers of legal services called alternative legal service providers (ALSPs), which were taking on technology-intensive law firm work such as pouring through thousands of written documents in the “discovery” process (called e-discovery).

What’s more, the Big Four accounting firms (Deloitte, PwC, KPMG and EY) were expanding their legal services. And major corporations were creating bigger legal departments, bringing in work they used to farm out to law firms. And big companies were also reducing the number of law firms they worked with. The winning law firms had to show them how they were reducing overall legal costs and delivering value-added services.

With this backdrop, it was no wonder the need for a strategic business CIO role was imperative to advance, be the modern law firm, and compete with the outside legal service providers.

Her overall charge is to help firms use IT to increase revenue, enlighten partners about how the technology could transform their company, and reengineer work conducted within the silos of a law firm. That requires radically changing the way the firm’s law partners viewed technology – and the IT function. As she told me, “We need to be part of the discussion that our lawyers are having with their clients. We need to be involved in the discussions drive the firm’s strategy, and be an inclusive player at the table making decisions.”

That would take time and a plan. Walk the floor, meet with every single person at the firm, listen with the intent to understand and make a difference. Each practice group or individual at the firm has different needs. Each conversation has a takeaway that can be brought back to educate and empower the IT team to act. An example is law firm partners wanted to work more effectively with clients — making decisions in tandem rather than having endless series of phone calls and emailing documents back and forth. By having conversations with the lawyers, innovation began to happen. Listening to clients reaped incredible rewards by deepening relationships and defining new opportunities. Clients see the value. Says Markstrom: “Several clients have said they haven’t had a law firm make things more efficient in the ways they work together. They told us they were never asked by a law firm how it could solve their problems.”

The Impact: A Collaborative and Digitally Proficient Law Firm

Focusing on strategy, collaboration and diving into a business-led model vs. an IT silo has incredible impact. Markstrom cites a few examples from her 2 ½ years at Taft:

• Innovative tools and approaches that streamline and make work more efficient allowing people to focus on high value work
• New lines of business that drive revenue and customer retention
• A redefined IT organization that is a true value-added business partner

Key Principles for CIOs of Midsized Companies

So what can other midsized companies – law firms or any others — take away from Markstrom’s experiences in upgrading the CIO role? I think there are five:

Hire Tech Leaders Who are Leaders First

For sure, they must love information technology and be facile with it. But they must look at themselves as key contributors to the company’s strategy and its operations first. CIOs who think of the IT function as a cost center and provider of internal services only – not much different than the accounting, benefits administration, or corporate library – won’t be the strategic leaders that these companies need.

Ask Them for Big and Small Ideas

Big ideas would be those that digitize some aspect of the business and turn it into a purely digital offering, such as an automated NDA or real estate agreement. Small ideas would be for improving the current business – e.g., software that instantly identifies factory production bottlenecks. The message is, get out of the comfort zone and think about the ‘art of the possible’.

Give Them the Green Light on Automation

Midsized companies are often overwhelmed with paperwork and inefficient business processes: turning customer orders into invoices and payments, for example. They can employ dozens or even hundreds of people who essentially take down information, pass it to another department, which then passes to one more department. Such costly, inefficient, and often error-laden paper-pushing work needs to end. Give your new CIO the charter to root out manual work everywhere that should be automated. If layoffs bother you, then figure out where you can redeploy these people, and retrain them for higher-value jobs.

Tell Them to Automate Transactions with Customers and Suppliers

The best CIOs will tell you that one of the best ways to use IT is to automate transactions with customers and vendors. Those that reduce customers’ cost of doing business with your firm will be welcomed with open arms by those customers. And your key vendors will react the same way. In other words, stop thinking only about how IT can make your business more productive. Think about how you can make your customers and vendors more productive.

Require Them to be Educators, Not Fiefdom Protectors

Your managers who run marketing, sales, finance, manufacturing, product development, and so forth know their operations. What they usually don’t know is how IT could transform those operations. Only CIOs who can tactfully educate their peers about the possibilities can work well with them. CIOs who come off as arrogant know-it-alls will bounce off the very people who need to be coaxed into the digital world. Your IT chief needs to be a chief collaborator, not chief dictator.

Midsized firms are as vulnerable as Fortune 500 companies to the digital innovations of startups and long-existing enterprises. Having an innovative CIO who is regarded as a business leader on par with their counterparts in marketing, sales, service, manufacturing, finance and other key functions is a prerequisite to becoming a digital leader.