Ten Steps For Improved CEO-CIO Relationships

Having agreed to eliminate the disconnect between corporate and technical management, what can CEOs do to bridge the gulf and really make technology work for the company?

The following is by no means a definitive list, but it represents a foundation for establishing and maintaining productive working relationships between business and IT managers. The ten steps are:

  • Keep all eyes on the prize.

  • Realign information technology as a team player.

  • Transform information technology methodologies.

  • Increase CIO participation in strategic planning sessions.

  • Overcome the techno-illiteracy crisis.

  • Foster an environment in which mistakes are welcome.

  • The facts are friendly: insist on the truth.

  • Without trust, everything is friction.

  •  Rank the information technology managers.

  • Have fun.

Keep all eyes on the prize
Many CEOs have been frustrated by the inability of CIOs to articulate strategic technical issues in the quantifiable and financial business terms that CEOs rely on. Worse yet, some CEOs have been repeatedly frustrated by the missed deadlines, blown budgets and lost business opportunities that have characterized their companies IT initiatives.

On the upper right hand corner of every whiteboard of every analyst and project manager in the IT department, the following two statements should be written:

  • IT has no other legitimate role than to support the business of the enterprise.

  • The answer to the question, ‘what is the objective of my company’ in 25 words or less. 

This will help everyone remember to challenge any assumption that IT is important on its own merits, apart from its contribution to the enterprise’s business objectives. It will also encourage everyone to pledge eternal vigilance against IT initiatives that are not strictly aligned with the clearly stated company objective.

Now these two statements do not exactly represent radical ideas, but for many IT people they are not easy to swallow. Many technical people still believe that their primary goal is care and feeding of corporate information systems. This impression must be corrected and there is no one to do it but the CEO. People may resist at first, but they will thank you for it later.

Realign information technology as a team player
Old paradigms die hard. The old paradigm of IT as an inflexible, reactive processor of customer requests must yield to a new attitude of involvement and teamwork. No longer should IT staff develop systems and solutions based on system requirements framed by analysts who are not directly working with the application. Instead, IT staff should be involved in customer applications as early as possible, visiting customer sites to learn firsthand what the requirements are and to educate end-users about their choices in meeting them.

A simple but effective way to realign IT is to shift ownership of IT projects and eliminate incentives that encourage empire-building and delays in delivering applications. The following principles address this shift:

  • IT projects should be owned by the customer groups whose requirements they address.

  • Incentives for the IT group must reward delivering applications as quickly as possible.

When end-users accept ownership of a project, the politics of developing systems magically improve. ‘Their’ systems suddenly becomes ‘our’ systems. Delays or sloppiness that users justified when the system was someone else’s responsibility are no longer tolerated when it is your own workgroup that you are inconveniencing. When users have a vested interest in completing the project, their approval process takes less time and their delivery schedules can be streamlined. If users realize that they will be the ones to live with any bugs or limitations, they make more time available to define requirements and review project progress. Finally, as users participate more in their ‘owned’ projects, they better understand their own requirements and the issues and constraints facing their IT partners. Subsequent projects flow more smoothly, reflecting the users’ growing participation in every area of the system development life cycle.

Transform information technology methodologies
If IT hopes to develop relevant and successful applications, it has to respond much faster than ever before to emerging business needs. The more volatile business requirements become, the more flexible and responsive IT needs to be.

Traditional methodologies simply will not meet rapidly changing business requirements. CIOs who grew up in technocentric data centers must learn the new paradigms for addressing business problems. CIOs who rose to their current positions from non-IT disciplines must familiarize themselves with both old and new complex technologies. In either case, each has a learning curve to climb in order to become conversant with new tools and techniques, to see if they have merit in helping to meet business objectives.

The ability to deliver results quickly has enormous implications. Once IT has attained this credibility, CEOs will realize that if they have a dream, IT can build it. Otherwise, when it takes two years to design and implement anything, a CEO’s dream is merely a fantasy.

Increase CIO participation in strategic planning sessions
At this point in business evolution, every organization has, no doubt, resolved the question of whether or not to have an individual take the title of Chief Information Officer (CIO). Some companies prefer Chief Technology Officer.

Other titles are VP, Management Information Systems or Chief Knowledge Officer. It does not matter.

What is important is asking the question–who is the senior individual responsible for thinking about enterprise IT issues? No organization can survive without a very capable individual acting in this capacity. The title is irrelevant. What is relevant is that this person be entrusted with all of the information processing for the company. Just as the Chief Financial Officer (CFO) is the chief executive in charge of the financial health of the business, the CIO is responsible for the millions of dollars already invested and the millions more that will be invested in IT.

The appointment of a CIO alone will not bring about realignment if the organization did not have it before. The role of CIO was created to bring together all disparate information resources under one chief. It only implicitly addresses some of the business needs by assigning the task of achieving those criteria to a high-level company officer who is linked to the business goals and concept of success rather than the IT milieu. However, without changing the relationship and interaction between IT and the corporate organization, getting IT and business aligned is unlikely to be realized.

The realignment between corporate and technical management cannot occur without strong business and technology leadership. The industry needs courageous CIOs who have the vision to harness the pent-up demand for change and focus it in ways that benefit the enterprise. Whatever happens to titles or organizational structures, prospects for individuals with such skills will not be wanting.

If an organization’s CIO, or the individual acting in that capacity, does not report to the CEO, the question is, why not? The way IT fits into the organizational chart speaks volumes about whether IT is expected to take a reactive or a proactive role. For example, it is hard to reconcile a mandate that IT must take strategic, proactive role on an enterprise level if the CIO report to a Vice President of Administration.

The CEO-CIO reporting relationship is not a matter of cosmetics. Companies in which the CEO and the CIO have close working relationships are typically the first to develop the most sophisticated and powerful business applications. Does your CIO have the flexibility working in areas that truly impact the strategic direction of the organization? This individual should be working on a handful of top priorities. Here are some points CEOs should keep in mind about the appropriate role of the CIO:

  • Someone in the organization must be linking information technology capabilities with the strategic direction of the organization.

  • For this linkage to occur, someone who represents IT must be at the strategic planning table.

  • This executive-level individual must address the organization’s information challenges strategically, not just set IT requirements. There’s a difference between information systems and information management.

  • The CIO should have cross-functional impact. Just as other top executives offer strategic input across many areas of the organization, so should the CIO.

  • Avoid overloading the CIO. You should assign the CIO a handful of top priorities.

One clear implication of an aligned CEO-CIO partnership is more CIO participation in strategic planning sessions. Despite the historical limitations of IT, an enterprise cannot succeed if its CIO is denied access to strategic planning sessions. If a chief executive considers the CIO an expense rather than an asset, he or she is doing both of them a disservice.

Overcome the techno-illiteracy crisis
Business executives and technical managers must learn to speak each other’s language. CEOs must overcome the techno-illiteracy crisis by becoming comfortable with technical terms and concepts. The only reasonable way to accomplish this goal is to actually use technology to solve business problems. Luckily, as I will show, this is not difficult.

IT managers, in turn, must become familiar with elementary business concepts. The only reasonable way to accomplish this goal is to actually use business concepts to solve technology or project management problems. This is not difficult, either. But since this is a book about IT, I will concentrate on the task of acquainting business people with technology and leave for another time the worthy challenge of introducing business concepts to technologists.
One of the earliest sources of the disconnect between technologists and financial or marketing-oriented business professionals is the former’s predisposition to using technical jargon. Every profession has its acronyms, abbreviations and buzzwords–indeed, it is one of the qualities that defines a profession–but could there be an industry with a more robust fascination for jargon? When I was last in a Barnes and Noble bookstore, I happened to glance at the shelves dedicated to computing. I was chagrined, but not surprised, to find more than eight dictionaries or glossaries dedicated to IT.

Can anyone explain to me why, though the automobile industry in America is still nominally bigger than the information industry, there were no dictionaries of automobile terminology on the shelf?

Information technologists assume that others of their calling share a common understanding of all the acronyms and terms I reluctantly list in the glossary at the back of this book. I do not propose to defend that assumption.

But, indisputably, there are others, significant others who do not understand. CEOs. Presidents. Chief operating officers. Financial executives. These are the people who run our businesses. These are the people technology is supposed to serve. But they really do not understand the world of IT or what it is organized to do. They do not understand the basic technology. Even worse, they do not believe it is helping them meet their business goals.

How can this be? To answer this question, let us consider technology from a CEO’s perspective. How does the business professional really see technology?

First, it’s a huge, recurring expense. Second, it’s confusion. Third, the promises solemnly made by the managers of IT have, to an eye-widening degree, not been kept. Fourth, the technology they were told was the answer two years ago is, they are now assured, no longer the answer. Now, the business professional is apprised without a trace of shame, the investments in the existing IT must be enthusiastically discarded in favor of replacement technology that is equal in mystery to the system in place.

The bottom line is that CEOs and the business people do not understand what technology can do for them. Many of the glowing promises have not become today’s reality. And they do not see technology being applied effectively to their business needs. Most CEOs are asking the question computer managers dread–what is the company getting for all of that money? Where are the profits? Where is the promised competitive edge?

The message is pretty clear. Technologists must get their heads out of the sand and see the broader picture. Businesspeople cannot tolerate such a myopic view from their colleagues in any area of the enterprise. They have businesses to run and must get the maximum out of any system they invest in. They have little use for technologists who are more focused on technology, with almost a religious fanaticism, than they are on helping broaden and improve the business they are supposed to serve.

The technologists have a stake in repairing the disconnect too. Speaking now as a technologist, I submit that if we cannot speak the language of the businesspeople, then we have no right to expect to be treated as useful contributors. We have a responsibility to translate these technologies, with all their benefits and limitations, into business terms.

Foster an environment in which mistakes are welcome
Driving fear out of the workplace is one of the key ingredients to creating a successful work environment. If people are spending hours honing trivia in preparation for a punishing meeting, where is the value for customers? What would happen if those fearful people could work in an atmosphere in which they could safely talk about new ways to serve customers or improve their operations? Unfortunately, there is no way to tabulate the costs for playing head games with employees, and there is no way to know what products or services were not invented because people were scrambling to preserve their dignity.

The attitude that no manager has a right to fail is a piece of corporate culture that we will have to discard if we are to repair the disconnect. As Henry Eric Firdman, former Director of Strategic Information Systems at Pacific Bell, notes, “IT is a statistical process and statistics tell us that processes sometimes fail. One of my challenges is to prepare senior management for the potential failures of some systems.”

A CEO cannot expect innovative and productive work out of people who are so afraid of making a mistake that they spend an inordinate amount of time covering themselves. At Computer Associates, the most important thing we tell our people is that they have the right to fail. Since they do not have to cover themselves, they are not afraid to make decisions. Decisions come fast and furious. While a small percentage of them will be mistakes, the company as a whole will be light-years ahead of organizations that practice a high impact choreography of covering up. If employees spend time covering themselves, then they have done three things wrong: They failed, they wasted time and they denied their colleagues an opportunity to learn from the mistakes. That, we will not tolerate.

The facts are friendly, insist on the truth 
What does commitment to the truth mean? It does not mean gazing at your navel to find the ultimate meaning of life. It means, as Peter Senge writes in The Fifth Discipline, “a relentless willingness to root out the ways we limit or deceive ourselves from seeing what is, and to continually challenge our theories of why things are the way they are.”

There is no way to avoid this particular unpleasant truth: the exchanges between corporate
and technical management at many organizations have not 
been entirely truthful. Technical managers have been guilty of telling their senior managers what they thought their superiors wanted to hear. Senior managers have been guilty of accepting such information in the face of overwhelming reasons for skepticism. Technical managers did not want to do the hard work of putting the information in terms senior managers could understand. Senior managers did not want to do the hard work of preparing themselves to understand the important information. From opposite sides, both managers were hoping that against all odds the information offered and received would somehow, down the road, turn out to be defensible. The lying satisfied mutual needs, or seemed to.

As numerous as the lies are the excuses defending the need to tell them: 
n “There is no way we can do this project in six months but I cannot tell my CEO that. Maybe we’ll pull off a miracle or something.”

  • “We have to rewrite the application; it’s architected wrong.”

  • “My CEO wouldn’t understand the details.”

  • “My boss can’t handle bad news.”

  • “If I tell the CEO about this mess, he’ll shut us down.”

  • “Lying gets me resources I otherwise wouldn’t get.”

  • “It’s a mess, but maybe I can clean it up before the boss finds out.”

  • “We’re too far into the project; it’s too late to back out now.”

Peter Drucker reminds us that the critical question all knowledge workers must learn to ask is, “What information do I owe?” This, he says, is a difficult question because there is a tendency among the human race to instinctively hoard information. Our first instinct is that what we don’t tell isn’t going to cause trouble. What we don’t tell isn’t going to cause change, either.

Let us accept that both sides are guilty and that this practice must stop. The disconnect cannot be repaired without an environment of unhesitating truth and candor. As usual, relief from the culture of deception must start at the top. Senior corporate executives must model truthfulness by being candid with their technology managers. That means sharing strategic information and not pulling back on bad news. That means trusting your IT managers to handle information with discretion. That means refusing to tolerate being ‘protected’ from bad news, technical or otherwise. That means welcoming the messenger of bad news. And, yes, that means if you do not understand something, admit it.

For their part, technology managers must never again over-promise, over-state, or over-sell their capabilities, and if they do, they should make corrections when they see indications that their promises were unsound. This message must be accepted by every member of the IT team. Technology managers must also give up the condescending attitude that they are protecting upper management when they withhold information for any reason. IT managers must accept complete responsibility for the actions of the IT resource. Finally, technology managers must learn how to handle sensitive information with discretion if they are to earn the trust of their colleagues.

I offer the position that the facts are always friendly. They may not always be pleasant, but the facts are friendly in the sense that, if they are facts, you are always better off knowing about them than remaining ignorant. In the culture of avoiding responsibility that many organizations have spawned, this lesson is not easy to swallow. There has been too much of passing the buck, too much of blaming each other, too much of condemning Washington or Tokyo. This observation is not pleasant, but it is a fact, and like all the other facts bombarding you, I suggest it can be your friend.

Without trust, everything is friction
My goal is to model confidence in the CIO and in every employee. I’m referring, in other words, to trust. Trust, as I hope to show, is the defining feature of an environment in which corporate and technical goals are aligned.
Attend to what Tom Peters says in Liberation Management, “Trust is essential. Given project autonomy, mutual dependence, contact with outsiders and work
away from ‘home’, an atmosphere of trust is an absolute must 
and more of a stumbling block to future organizational success than, say, getting the IT schema right.”

The type of corporate environment we are striving for is built upon
unprecedented layers of trust: between corporate and technical management, between the company and its partners, between the company and its customers. Trust has to be big enough to welcome mistakes.

Rank the information technology managers
At Computer Associates, I have always insisted that managers rank their direct reports. The vast majority of employees appreciate knowing exactly where they stand. In any team, there will always be a range of aptitudes. Not only is the spread of talents obvious, but team members are in remarkable agreement about the distribution. Put any ten people in a room and they will sort themselves out from top to bottom in short order. Organizations that refuse to make these rankings explicit only deny the management of the team, vital information against the day when some adjustments have to be made. That said, my experience in ranking employees suggests two policies.

Work for the top third: Every employee at CA is ranked. It is
not a trivial process but, over the years, we have evolved a system that works very well 
for us. After completing the evaluation process, we let the employees in the top third know only that they have been ranked in the top third. Every other employee is assigned a numerical rank. Computer Associates people are satisfied with this system. For the top third, this system avoids the occasionally counter-productive competition to be ‘number one.’

Pecking Order, ok. Layers? No way!: Acknowledge that the pecking order exists but insist that it not be used as an excuse to stifle discussions or lock people out from participating. That means anybody can talk to anybody, and by and large, people do not worry about rank. The CEO’s job is to be conspicuous in seeking out the views of everyone, regardless of where they happen to reside on the pecking order.

Determining who among your staff is the most valuable
contributor is an essential task of any manager. If your CIO has not gone through the exercise of ranking the IT managers, you must invite him or her to do so. Two benefits will immediately accrue. First, it will become apparent how the rankings of capabilities map to the organization chart of responsibilities. Second, your top-rated people, whom you presumably attracted on the basis of your commitment to excellence, will appreciate any exercise that distinguishes between the outstanding and the merely capable.

Ranking employees may seem to go against such management theories as team building, employee empowerment and other politically correct attitudes, but it is critical to identify the top people in any organization. If you want to structure your organization around performance, it becomes immediately clear that a way must be found to determine which employees perform best. Sure, most companies go through a perfunctory employee evaluation, in which on a one-to-five scale everyone turns out to be a three. That helps everyone pretend they are equal contributors. But how do you know which threes are the best threes? You do not. At CA, both, employees and their managers have much better information for making adjustments when they are needed.

Have Fun
The biggest challenge facing tomorrow’s managers is finding the outstanding people to do
the work. This is doubly true in the IT field, where the challenge will be to find individuals doubly endowed with first-rate technical skills and keen management instincts. To attract, keep and motivate a high-quality work force, companies will have to create an environment of challenge, stimulation, and (dare I say it?) fun. 

Somewhere deep in our ancestral memory is buried the notion that work is supposed to be fun. Corporate America has correctly identified this concept as subversive to the rigid, hierarchical
organization and has been ruthless in its campaign of zero tolerance for anything approximating fun in the workplace. 

And yet, employees persist in having fun on the job. Managers suspect that small teams behind closed doors often have fun, and many do not know what to do when they catch an employee taking giddy delight at the task at hand.
As managers, our job is to optimize the opportunity for fun. That means creating small teams because fun is impossible in a vacuum. That means looking for opportunities to make everyone a winner in some way. That means trusting people. And although
optimizing fun is serious business, it means not taking ourselves too seriously. Finally, managers will do well to attend to the difference, and not only in this context, between ‘optimum’ and ‘maximum’. Optimum human body heat is 98.6 degrees fahrenheit. Maximum body heat will kill you every time. 

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