When companies announce technology deals both the company and the vendor are keen to describe the deal as a partnership and not a transaction. This is because a partnership sounds more strategic. There is hope that this relationship between the company and the vendor can create some long-lasting value or mutual gain, but the reality soon bites. The relationship soon changes from a partnership to transacting, which often leads to bickering and disappointment. Papers regularly report stories of long-term sourcing or services partnerships that are not renewed or are cut down in size. This makes us wonder if the vendor partnership is simply just a myth. Continue reading “Building effective vendor partnerships”
As I wrote in a previous article, strategy in many organisations just adorns bookshelves. However, a strategic plan is more than just a document. It is the shared understanding and common vision of the stakeholders along with the passion of IT leaders, which brings strategy to life. We can say the strategy is truly adopted, when people understand the strategic direction and make every day decisions (what, how and when) in context of the overall direction.
We all know that to get more value from Information Technology investments, IT projects, portfolios and priorities must be aligned to those of the business. IT strategic planning is often used as a tool to achieve this alignment and turn business needs into results. However, this is often not that easy! Although many organisations develop a strategic plan, they experience difficulties implementing the plan successfully. Similar to golf or chess, the rules are well known but performing consistently is still a challenge.
Here are a dozen secrets that will ensure your strategic plan is implemented successfully.
1. Understand and measure how IT will enable the business
These days, ‘business alignment’ has become a trite phrase. In the context of an IT strategic plan, understanding how IT can help improve the enterprise performance is critical. Can IT enable the business to bring products and services to market faster or more cheaply? Can IT change to meet the realities of new competition, restructures and other major business changes? It is not just the capabilities that must be aligned. IT expenditure and capital budget also need to be aligned with what the business can support.
IT strategic goals and performance measures should have a direct linkage with the enterprise performance goals. If improving customer service or satisfaction is an enterprise-wide performance measure, IT should demonstrate how it is supporting this goal. Although this sounds obvious, many the IT performance goals of many organisations have no obvious or automatic link to the organisation’s goals. The effort in linking IT’s goals to that of the organisation is worthwhile because it helps to define the value of IT spending, a critical step in defining the capital programming process and tracking the results of capital investments for IT.
2. Get executive sponsorship
If the strategic plan is not used by the executives or in decision making within IT, it will become redundant. Key stakeholders and executives need to be involved right from the beginning of the IT strategic planning process. A good start is to obtain the blessing of the chief executives in the form of a charter for strategic planning. Get the input of the executives about how the business is changing, what challenges they face and what they need from IT. Seek guidance on key priorities and investment areas.
Ultimately, the IT CIO / executive is a key to this sponsorship. Without the active involvement and sponsorship of the IT Executive, the plan will most likely fail.
3. Cast your net wide for input and ideas
Input to the strategic planning must come from a wide range of players. People in the field, call centres, product and service managers can help identify opportunities for improvement. Understanding what the industry/ competition is doing in their businesses can be valuable. I have found strategic planning managers in business units can be a valuable source of information. Smart IT leaders will stay alert for this type of in their day-to-day interactions so it does not become a major burden at the time of the strategic planning.
4. Obtain commitment to change
The primary purpose of a strategic plan is to define and execute change. Achieving change is never easy. It requires commitment from the leadership and also buy-in from people on the ground. Effective change management process requires the CIO and the IT leadership to demonstrate their commitment and take a lead role in the change management process.
5. Involve Stakeholders
Getting commitment to change starts at the time the strategy is formed. Giving key stakeholders an opportunity to provide input and feedback will increase their involvement and buy-in.
The first step in strategic planning often is the current state analysis (or where we are now?). Sharing the current state analysis with IT staff and other users and getting their thoughts on where IT could improve will unleash many new ideas and input. Asking people about their problems and ideas will increase their interest by making the strategy process more relevant to them. Keeping staff informed with regular updates and follow-ups, sometimes from their own managers and team leaders, will further maintain their interest. Remember that the plan is not only a factual document; it seeks to sell and motivate action.
6. Reality-check the plans
When the strategy is nearly ready getting key IT staff and managers to provide input on implementation timeframes and challenges would help ensure that the strategy is not a pie-in-the-sky but actually achievable. When the real size of the task and timeframes become apparent, steps can be taken to adjust the goals in order to ensure they remain challenging yet achievable.
7. Demonstrate flexibility during planning
Strategic perspectives evolve and develop as the strategic planning progresses and more discussions take place. Maintaining flexibility will allow IT to understand organisations imperatives and adopt strategy accordingly. This also avoids the risk of strategic plan becoming too ‘IT centric’. Keeping an open mind during the strategic planning process will help you identify omissions and unrealistic goals. Flexibility will result in a better plan as well as greater buy-in.
8. Prepare a holistic plan
The IT strategic plan should not just be about projects and portfolios. The plan needs to critically examine all aspects of IT management and IT capability within the organisation. Achieving the organisation’s goals often involves focussing on aspects such as the enterprise architecture, investment planning and governance, program management office, people planning and performance management practices. The inclusion of initiatives in this area would make the plan holistic and cover all critical aspects of IT.
9. Communicate, Communicate, Communicate
Completing your plan is just the first step in executing a process of strategic change. Once the plan is complete, launch it with a splash. Have sessions with all the IT staff including the executives and other key IT partners. Encourage IT managers to brief their staff on how the plan impacts them and what they can do to contribute. Regularly communicate progress and especially early successes. These will give everyone a sense of momentum and help to maintain focus. Regularly use staff meetings to talk about the plan and to explain how major IT projects and initiatives link to it.
10. Focus on progress measures
Good strategic plans include objectives and measures of progress as well as targets or milestones. These plans specify the actions or initiatives needed to achieve progress. The first step usually involves measuring the progress of the initiatives followed by the outcome measures (which usually lag the actions). Maintaining disciplined executive attention on completion of initiatives and targets is critical to achieving successful implementation.
11. Track and publish progress
One reason many plans fail is lack of execution. Once the planning is complete and the plan is approved, it sits on the shelf until the next time. Implementing rigorous progress monitoring and regularly publishing the results to the management team and the larger IT team is critical to the success. Better still is to link the manager KPI’s to the strategic plan outcomes.
12. Revisit and revise
All plans need to be refreshed periodically. Businesses are not static. Regulation, competition, technology or environmental changes necessitate plan adjustments. Most organisations have a strategic planning cycle. Revisiting the plan, checking progress and goals and adjusting as necessary in a formal and structured manner will keep the plan aligned to the business needs.
In order for strategy implementation to be successful it needs to be treated as a change program with the right sponsorship, stakeholder engagement and communications. Kogekar Consulting can help you develop and successfully implement your strategy.
In a recent issue of the McKinsey Quarterly, Stanford Professor Bob Sutton published an article that provides some advice to bosses at the top of organisations. Much of this advice is also relevant to CIOs and other IT leaders. Below is an edited extract from the article. Are you a good boss? Do you practice the things bob suggests?
Almost 95% of people who work have bosses or are bosses. The bosses set the tone, the rules and guide at close range. Bosses are important because for more than 75% of people employees, dealing with their direct boss is the most stressful part of their job. Those just below the boss in the pecking order constantly have to deal with the boss’ virtues, quirks and habits. A Swedish study indicated that men with bad bosses suffered 20-40% more heart attacks than those with good bosses.
Bosses matter but those that are higher up in the organisation matter the most. Whether they realise it or not, bosses cast long shadows. Their moves are observed constantly by their followers, who in turn will regularly magnify and mimic their moves. Often the subordinates know more about the boss and his/her habits than the boss him/herself. If the boss has an autocratic management style the subordinates tend to become autocratic. If the boss interrupts people when they are talking, the subordinates tend also to pick up this trait. The Executive’s actions (rather than words) reverberate through the rest of the organisation and can change or undermine the organisation’s culture. I have seen that within a year of the arrival of a new CEO, the culture of the organisation can change dramatically.
The best bosses stay in tune with the relentless attention given to them and are aware of power of the long shadow they cast. They use it to their advantage in setting the direction and showing that they are in charge. These bosses understand how others see them and adjust their behaviour accordingly. Effective bosses know how to take control and how to boost the performance of their organisation. The bosses who don’t know this find their tenures shortened.
The first and most important thing that new bosses should do is convince others that they are in charge. Those who fail at this first hurdle will find their jobs impossible. In today’s organisations, leaders often get more credit (and blame) for the organisations successes than they deserve. The reality is that bosses only influence 15% of performance but receive 50% or more credit for it. This is reflected in the large salaries some Chief Executives receive. However, perception is reality. The bosses who admit they don’t have much influence on performance outcomes would lose the confidence of the team that they lead.
Bob lists four ideas to improve the perception of control:
1. Express confidence even if you don’t feel it
In 2002, when Intel’s CEO Andy Grove was asked how leaders can act confident even when they have doubts he said, “Investments and decisions don’t wait for the picture to be clarified. You have to make then when you have to make them”. When leaders pump themselves and act confident, they start feeling confident. A leader’s confidence inspires their followers.
2. Don’t dither
Indecision, delay and waffling are hallmarks of a weak boss. If the boss makes quick decisions it creates the illusion that they are in charge. Others don’t mind if the boss changes his mind some time later as new information emerges. People don’t like the boss procrastinating before making each decision.
3. Get and give credit
As mentioned before, bosses tend to receive more credit when their people do good work. Smart bosses know this and can leverage this to their advantage. These bosses know people like to work for the winners so when mentioning accomplishments they give copious credit to others. The best bosses routinely give more credit to their team than they probably deserve because when they do this everyone wins. The boss gets the reflected credit and the team thinks the boss is truthful. Outsiders think that the boss is competent but also modest and generous.
4. Blame yourself
Just as bosses get most of the credit when things go right they get the lion’s share of the blame when things go wrong. When something bad happens, the boss is expected to know. Leaders who denounce others for their troubles come across as less than honest and powerless. By refusing to take responsibility they raise the question, “are you really in control?” Managers who accept the blame and responsibility are seen to be more powerful and competent than those who avoid the blame.
However, the key is not just to accept the blame and say sorry. Instead the boss should take immediate control of the situation, show that they have learned from their mistakes and announce new plans. When these plans are implemented the boss should make sure everyone understands that the improved results are due to the new plans.
Bosses can bully and force people into short term performance gains. But in the long term these are counter-productive and undermine worker creativity and morale. Bob suggests three strategies that the best bosses use to focus on boosting the performance of their people:
1. Provide safety
Good bosses encourage learning by creating a safety zone where people can talk about half-baked ideas without the fear of ridicule or punishment. Many organisations have a strong fear of failure. Creating psychological safety is the key to unleashing new ideas and creativity in the workplace. The absence of psychological safety in conjunction with fear of the boss can lead to negative consequences. When people fear reprisals, errors tend to be hidden and not admitted. Feedback and improvements stop which in many cases can result in more significant problems down the track.
2. Shield people
The best bosses shield their people from criticism or premature judgement from others that can undermine their work. Teams who enjoy such protection have the freedom to take risks and try new things. Good bosses provide their people with the resources and experts to do the work and air cover to get on with the job without unnecessary distractions and criticisms.
Good bosses are especially adept at protecting their people’s time, for example by eliminating unnecessary meetings or keeping them short. They also try to eliminate needless reviews and activities often initiated by outsiders so that the team can focus on the job at hand.
3. Make small gestures
The late Robert Townsend, CEO of Avis and author of the masterpiece Up the organisation, referred to the phrase “thank you” as a, “really neglected form of compensation”. It is a sad reality that too many projects end without acknowledgement and celebration. The best managers take the time to express their appreciation to their people even when the project has gone bad. When the stench of failure is in the air people need more support from the boss and from one another. Bosses with will and skill provide this support and allow their people to learn from the failure. However, more bosses unfortunately engage in the blame game than provide support.
Good bosses not only get more from their people, they also attract and keep better people. If you think the people who work for you are deadbeats or jerks, look in the mirror. Why don’t the best people want to work for you?
Of all the skills good bosses have, self-awareness is probably the most important. The best performers accurately judge both their strengths and their flaws. They make an effort to understand how their moods and quirks affect the performance of their team.
The best bosses will constantly ask themselves, “what does it feels to be working for me?”. If your people answered this question honestly, what would they say?
The 2009 Standish research shows that only 32% of IT projects are successful. Which means that the new capability is successfully “installed”. But the sad reality is that in a large number of cases this new capability is not used the way it was intended. Thus only a fraction of the desired benefits (or value) are realised. So when the CEO says, “show me the money” or the value the CIO is often caught short.
There are many reasons for this failure. There may be a lack of understanding about the true intent for the change. Competing agendas and conflicting priorities may dilute the focus. Then there is resistance from the people affected to adapt new behaviours and processes. A key reason is that organisations tend to put all the rigour and energy in the project “installation” and almost none for the benefits realisation post-installation.
Instead of the “installation” focus, the modern CIO needs to adopt a “realisation” or value mindset. With a realisation focus, CIOs ensure that project success is judged by the value created. This article suggests steps CIOs can take to instil a benefits management focus and show the “money”.
Organisations are good at figuring out what must be done to address their business challenges and capture the opportunities. IT organisations are getting better at delivering technology capabilities to address these challenges. A lot of energy and capital is invested in developing these technology solutions. The plans appear sound. Why is it then that the outcomes fall significantly short of the original ambitions? In today’s markets, CIOs and other leaders cannot afford to spend large amounts of money and risk their reputation just deploying projects, when the success now depends on their ability to manage the change and actually getting the returns on investment (ROI).
Figure 1 – Realisation mindset
Getting a sustainable ROI requires carefully managing benefits realisation as well as managing the human aspects of the change. The benefits management process provides the framework for blended investment programs that integrate technological change, organisational change and business process design within a common context.
The purpose of the benefits management plan is to identify and organise all activities such that the promised benefits are achieved. It consists of benefits identification, benefits planning, monitoring, realisation and review. A realisation mindset guides the entire project/ program execution. Surveys show that organisations without well-defined benefits planning processes are significantly worse at getting project ROI.
All major changes require shifts in the way people (staff, suppliers, competitors and customers) think, manage and act. These changes will not just happen by themselves. They must be planned and carefully managed. The bigger the change, the larger is the impact and the disruption and resistance to the change. If people don’t “buy-in”, the change is likely to fail. In technology enabled changes there is a tendency to focus on the technology side of the project and under-estimate the human change dimension.
Keeping track of the “money”– Benefits Management Process
A benefits management plan is a critical tool for focussing the mind on the value.. It has five stages.
Benefit Identification is about clarity around the intent of the change. Benefits identification determines project scope. The sponsors must be clear about what beneficial outcomes (or value) they want to obtain. Where the benefits will occur? When? Who will receive these? Who is responsible for the delivery of benefits? How the project outcomes link to the value?
Figure 2 – Benefits Management Process
- Benefits planning stage covers all steps needed to leverage the project outcomes to realise the desired value. (E.g. The project may deliver new technology capability, people need to be trained, new processes and structures may need to be implemented, product/ service features need to be changed, new marketing programs may need to be devised.) In planning evaluate the organisation’s capability to execute and capacity to absorb the change. Also consider the various risks and capability to govern and support the change.
- Benefits Monitoring covers many stages of the technology development / implementation process. It ensures that the benefits are not diminished during the project life cycle.
- Benefits realisation should be performed from the time changes begin to be implemented right through to routine operations stage. It would indicate if more actions are necessary to realise the benefit or whether further benefits are achievable.
- Benefits review captures on lessons learned.
Ten success factors for realising the value
- Active Sponsor – Effective management requires a single leader who is visibly committed to success and accountable for realising the benefits. Major changes need senior level executive leadership. Active leadership means selling ideas repeatedly and being there to overcome obstacles. The sponsor should be accountable.
- Clear Intent – There must be clarity about the reasons for the change. What “pain” this initiative will address? How well do key people share the intent? Is it aligned to the strategy? What would success look like? Is the “price to be paid (dollars, political, organisational)” justified? A lack of clear and shared intent at the beginning would invariably result in a weak or failed initiative.
- Business Case – There are many examples of weak business cases that have just sufficient funding for the technology solution. All the post implementation activities and resources are assumed to come from the “business as usual” budget. Without adequate funding and resources for change management in the business case, benefits realisation would be suboptimal.
- Full life-cycle governance – In business changes are to be expected. The business case will change when the circumstances change. At agreed project stages or upon discovering major variations, both the costs and benefits should be reassessed. If project costs are higher, ask if is it still viable? Should more benefits be found? Should the scope be reduced? Remember that the business benefits are the reason for the project and not technology installation.
- People – People are the greatest variable in a change. Systems are at times easier to change than people. Benefits realisation will depend on transforming the way people think and operate. Don’t underestimate the difficulties employees will have in learning to work with new systems that require new skills and new ways of thinking. Take the views of affected people into account early. Try and understand reasons for their resistance and develop action plans to address these. Align consequences and rewards with benefit realisation.
- Capacity for change – Do you really know your organisation’s capacity for change? Do you have executives who have a track record of leading the change? Are there are too many changes going on in the organisation? Be truthful with yourselves about what the capacity for change is and what is realistic and then plan accordingly.
- Relevant measurement – Measurements must clearly demonstrate how investments contribute to the beneficial outcomes. They must support decisions regarding progressive allocation of funding and resources via agreed “stage-gates”. Secondly, measurements help adjust the benefits path to changing environments. Techniques such as “results-chain” would help choose the right measurements.
- Clear accountability – Assign clear ownership to each of the measurable outcomes including project milestones and outcome measures.
- Independent governance – Importance of independent governance cannot be overstated. Investment governance board should ideally also monitor benefits realisation. This creates transparency around investment and the returns on investment, provides due diligence on the change initiative and holds sponsors accountable for the benefits. It also helps create peer pressure and reinforces good governance. Experience suggests leaving the entire governance to the sponsor alone is a mistake. Sponsors are known to downplay mistakes and to overstate success.
- Value Management Office (VMO) – A VMO serves two purposes; first it provides expert advice and tools to the sponsors for assessing value (validating business cases). Secondly, it helps monitor program progress, and provides rigorous value assessments to the investment governance board. A VMO, like a Project management office, would promote consistency in the approach as well as promoting transparency via reporting.
Benefits management is process is applicable to all initiatives and not just for technology. But changing the organisations mindset from installation to realisation is neither a quick nor an easy process. It requires an ongoing commitment from the top. This mindset enables a big picture view of capital investments and enhances ROI.
For more information on how to create a realisation mindset in your organisation please contact the author.
These days it is not difficult to find CIOs who are excellent communicators. Unfortunately, it is also very common to see many IT leaders who struggle to communicate well. Some IT leaders are very good at communicating technical information with their teams whilst others communicate well with business users. However, many IT leaders find it hard to communicate effectively with all the stakeholders in the business. I have thought about why this is the case and what IT leaders at all levels can do to improve their message delivery, be effective at leading and motivating their team and engaging with the business.
Many people working in IT start in technical or engineering areas where technical knowledge and skills are valued much more than communication skills. In these areas, peer group discussions are about technical issues and are usually full of jargon. Even when these people become team leaders, they have a technical team and a technical boss so the style of communication does not need to change. Those that have to deal with business users often struggle to get their message across or to elicit ‘real’ requirements.
The inability to communicate effectively reduces one’s own performance and damages the reputation of IT in the organisation. It can affect their relationship between IT staff and their peers. When lT leaders talk in jargon their message is lost, misunderstandings occur and they fail to win others over to their cause. Communication blunders can adversely impact an IT leader’s career by reinforcing a ‘geeky’ image. Executives think if an IT leader cannot express their ideas clearly that they should hire someone else who can.
Here are some tips on improving communications:
What is true for board communication (Winning the Board Game) also applies to communication with other people. Speak in simple jargon free language. Even among technical people, talking in simple terms is always more effective than talking in jargon. When talking with jargon you are assuming everyone has the same knowledge level as you. When listeners don’t understand the technical terms they lose the message you are trying to deliver. It is even worse when talking to the business because they will just stop listening altogether.
Don’t dazzle them, get buy-in
Some IT people want to impress others with their brilliant solutions or ideas. They are very confident that they know the very best way of doing something or solving a problem. What happens then is that they become so enthusiastic about their own thinking that they fail to get a commitment from the others. They don’t get the perspective of others or try to build a consensus. In fact, the enthusiasm and confidence of these people discourages others from raising questions or making suggestions. Although others seem dazzled by good ideas, this doesn’t mean they believe them or will become part of the solution development process. Failing to get agreement at the start of discussions can create delays later as people struggle to comprehend why this solution is being implemented and why other approaches will not work.
Asking questions ensures an understanding. It also encourages others to ask for clarifications, make suggestions and present other points of view. Asking meaningful questions and listening to the answers engages the audience, making them active participants. It can help show important information, insight or feedback. If you are presenting an idea or business case, asking questions facilitates understanding, which can lead to a agreement.
Don’t act like a sales person
New IT leaders try to motivate their teams or get them energised by behaving like sales people or sport captains by saying phrases like, “go get them” and “play to win”. IT staff are generally low-key and like facts and arguments, not rah-rah. Learn to speak with the audience in their language.
Similarly, using scare tactics to sell ideas does not work. IT Leaders talk about catastrophic consequences when discussing technical upgrades or investments. Most experienced business executives have heard these type of doomsday scenarios from IT before and find them unconvincing. Using rational, measured arguments and discussing options improves understanding along with the presenter’s credibility.
Too many facts spoil the pitch
Just as too little facts don’t make a good argument, too many facts can confuse instead of enlighten. Some leaders think they would be more credible if they have a fact heavy business case or presentation, especially for IT investments. Telling a story can be more powerful than a litany of facts, charts and analyses. In addition to the facts, others are looking for passion and commitment to get them to join you and support your cause.
Don’t get bogged down in technical problems
Although technical problems may be the most pressing issue on your mind or in your day, most other people don’t want to know about your technical problems. The jargon in talking about technical problems can be boring and/or may cause others to misunderstand and panic. As a leader, you are expected to handle these technical problems yourself or ask others how they could help. When leaders regularly talk about their technical problems others may think you can’t handle the job. If the problems are important be brief with the details, tell others the possible impacts on their business and what steps you have taken to resolve the problems without resorting to detailed step by step explanations.
Don’t forget your team
Many IT leaders focus their energy and communication on the upper tiers of management and business managers. While it is important to communicate effectively with management, remember your team needs to hear from you as well. Your team will have questions and concerns and will need direction from you. You need their agreement and support to meet your goals and do your role. Don’t forget this!
Don’t bypass other leaders
Many senior leaders believe they are better communicators than their managers and team leaders. While it is right for major company news or changes in direction to be communicated from up above, research indicates that communication to the team from their direct leader or supervisor is the most effective and most credible. Immediate supervisors know the on-ground realities and can address what is important to their staff. They can give specific direction. Employing the organisational hierarchy to cascade communications prevents mixed messages and conflicts from occurring. It also avoids the inadvertent undermining of subordinate managers.
Discussion or direction
In meetings, make sure it is clear when issues or items are being discussed and brainstormed. Many leaders don’t clarify when the discussion is over and a decision has been made, creating confusion within the team. If the team continues to discuss decisions after they are made, the leaders’ authority is undermined. In strict hierarchies, once the leader has an idea, the team feels it is disrespectful to challenge it. In this case, encouraging exploration and discussion needs to be very explicit. On the other hand, when a decision is reached, clarity in assigning responsibility and actions improves communication.
Making a written record of the decision in meeting minutes or in a follow-up memo further facilitates clear communication. A written record of the decisions made and the instructions given provides useful information for those who were not part of the meeting or the discussion. Written instructions create clarity and avoid confusion as different participants may have a different idea of what decision was reached.
Remember, improving communication is not a one step process. Communication continues to be a problem in all organisations. To become better at communicating requires practice and more practice.
In 2009 IBM published a study based on interviews of 2,500 CIOs from across the globe. They found:
“The voice of the CIO is being heard in new ways – as CIOs are increasingly recognized as full-fledged members of the senior executive team. Successful CIOs are much more actively engaged in setting strategy, enabling flexibility and change, and solving business problems, not just IT problems”.Many of the CIOs most important goals seemed to clash, e.g. how to be innovative whilst relentlessly cutting costs and how to introduce new services without causing disruption to the business. These conflicting goals make the CIO role a constant juggling act.
The juggling act
The IBM study found that successful CIOs are simultaneously juggling three pairs of activities at any one time.
Figure 1: The Juggling Act (IBM, 2009)
Juggling three roles
By integrating these three roles, visionary but pragmatist, value creator but cost-cutter and collaborative business leader and an inspiring IT leader; the CIO aims to :
- Make innovations real,
- Increase the ROI of IT and
- Expand the business impact.
Let’s look at each of these aims individually.
Making innovations real
Successful CIOs are active members of the executive team. They are always looking for ways in which technology and data can be used to improve products and services or open new market opportunities. They have a wide sphere of influence across the organisation and they encourage IT and business to co-create innovation opportunities. Visionaries also generate excitement from the business through ideas that differentiate the organization from others. They treat information as an asset and seek to leverage information for competitive advantage.
CIOs know that being visionaries and bringing new ideas is only part of the job. Keeping the wheels of the organisation turning smoothly and efficiently is a must. They recognise that faultless service delivery remains at the heart of their credibility and influence. Pragmatic CIOs understand what their organisations do well and effectively use third-party service providers to get results. They collaborate well within IT and with external partners to help make ideas a reality. These CIOs make it easy to work together and deliver results. To stretch as a Pragmatist, a CIO sets goals like achieving higher productivity and helping the organization become more flexible.
Raising ROI of IT
IBM found, “CIOs become Value Creators when they work with the business to enable superior customer experiences”. As more and more business is conducted via electronic means, customer interactions with business become easier and create value for the enterprise. Helping organisations leverage facts to gain new customer insights also leads to value creation opportunities. In some businesses, CIOs are leaders in establishing collaborative relationships with their high value customers / partners and finding ways to improve and enrich customer interactions.
While looking for new ways to create value, CIOs everywhere are continually finding ways to improve efficiency, streamline operations and cut costs where possible. Their mantra is to do more with less. CIOs drive centralisation of services and infrastructure to gain scale benefits. CIOs use standardisation, simplification and automation to cut more costs. Attacking business process inefficiencies and supporting IT solutions is another focus. Relentlessly focusing on cost cutting enables the CIOs to redeploy their departments’ efforts into creating more value opportunities.
Expanding the business impact
Successful CIOs act as true business partners. They work as collaborative business leaders in driving cultural change across organisations. “I help business leaders figure out what they want to do with technology, then I work on how to deliver it,” said a Defence and Security CIO in the United States. CIOs regularly meet with the board and executives and are fully across key business decisions and challenges. They understand changing future business models and remain alert to rapidly facilitating business model changes with enabling technology.
CIOs understand that while remaining engaged with the business leadership is important, maintaining IT expertise is also critical. They create an environment that helps the organisation to develop and apply IT expertise. CIOs encourage professional staff to learn and develop not only their IT skills but also their business acumen. Furthermore, many CIOs create IT centres of excellence to develop greater IT expertise. These centres can also create business technology innovation opportunities.
CIO profiles in high-growth and low-growth organizations differ
The 2009 IBM CIO study found that the profiles of CIOs who work in low-growth organisations were more like those of IT Managers. They were good at leading IT staff but weak in five other areas. On the other hand, CIOs in medium growth companies had a well-balanced profile across all six dimensions. High-growth company CIO profiles showed less emphasis on IT leadership skills but higher scores on every other dimension.
- An Insightful Visionary and an Able Pragmatist – The Insightful Visionary helps the business explore how technology can drive innovation, while the Able Pragmatist makes it possible to bring creative plans to life.
- A Savvy Value Creator and a Relentless Cost Cutter – The Savvy Value Creator devises better solutions by understanding customers’ needs, while the Relentless Cost Cutter stays vigilant about trimming expenses wherever possible.
- A Collaborative Business Leader and an Inspiring IT Manager – The Collaborative Business Leader thoroughly understands the business and builds strong partnerships internally and externally. The Inspiring IT Manager demonstrates personal IT expertise and advocates deeper skills across the IT organization.
Let’s look at these in detail.
A dozen tips for success
Not every CIO is strong on each one of the six dimensions above. The experiences of over 2,500 CIOs worldwide suggested some key actions to strengthen the areas where CIOs may not be doing enough.
Make innovation real:
- Champion business and technology integration
- Encourage innovation not just in the IT organization but in the broader group as well
- Make working together with IT easy
- Concentrate on core competencies and leverage suppliers where right
Raise the ROI of IT:
- Find way to reach customers in new ways
- Enhance integration between IT and business and transparency
- Standardize and centralize IT systems and technologies to economize
- Keep cost reduction a top priority.
Increase the business impact:
- Know the business well. Present and measure IT in business terms
- Get involved with business peers in non-IT projects
- Lead the IT forces and cultivate truly extraordinary IT talent
- Enhance the data and turn it into usable information for the business
The balancing act
Many CIOs understand the balancing act necessary in their roles and work with goals that seem to be the opposite of each other. In doing so, they show a deep understanding of their role as CIOs and a high level of sophistication. Consequently, these CIOs are able to focus on what matters most in their organisations.