Welcome to the jungle that is your new CIO role. How can you survive all the unknown trials that are about to face you? Who will be your allies and who wants to see you evicted? Hopefully I can help steer you through with some survival techniques I have picked up without you having to get the scars.
You are most likely to have been brought in ‘to make a difference' or ‘take us to the next level'. Almost undoubtedly replacing someone who achieved all they could achieve but was not suitable for the next steps, or who left when there was work still to be done.
As a new CIO you are in a very unique position. This is your honeymoon period, never will you be as popular or have as many allies as in the first few months of your role. Everyone will want to be your friend and tell you how pleased they are to see you, normally because the last incumbent refused to get them a new laptop every time a shiny slightly smaller version became available. Make the most of this unique position to make change and make a difference. Also at this time, because you may well be new to the organisation, you are seen to have an external view of the IT industry and how things should be done.
So what should you do to survive? Is it about surviving or doing a good job? Are these things the same or mutually exclusive? With the average tenure of an IT executive being about two years you could argue that those with the survival instinct are the most successful.
What will be covered here is not just surviving but genuinely making change; but doing this by bringing people along with you on the journey, and not fighting a battle at every board meeting. It is also worthwhile asking yourself the question: ‘Why have you been employed here? Is it to run a steady ship or to enable change?'
Regardless of whether you are on the board or not, compared to most members of a typical board you have a number of key advantages. You provide the link between business and technology, this is a fine balance, if you go too technology focussed or too business focussed you lose your unique selling point, so keep that balance right to ensure your importance to the board.
You are also rarely seen as a threat in the hierarchy so can avoid all the posturing of Finance and Operations directors who continually strive to hold the balance of power on the board. So with all this considered where and how should you focus your attention during the first 100 days of your tenure?
Create Value for Money
Over the past five years there has been an increasing focus on improving service and then more recently, due to the economic downturn, on cutting costs. Rather than look at these as separately which will end up in you promising a service you can not deliver, look at it holistically and promote the prospect of creating Value for Money.
Traditionally the board is always told to look at big picture, however with IT big picture is always one large lump of money, often attacked by everyone else to protect their budget being scrutinised, unless of course you have a large marketing department then they get attacked first.
The first step in VFM is to get the business to understand the detail around the IT budget and more importantly understand the costs that you as CIO have control over. The IT budget is always the worst kept secret in any organisation, everyone seems to be able to tell you the total spend, and that figure gets ingrained in peoples' minds. However typically a CIO's budget will contain over 60 per cent in capital expenditure and business driven projects, these were not your choice but the businesses, but it is your responsibility to ensure they are delivered efficiently. There are also likely to be long term investment items and depreciation, again decisions and commitments made before you arrived and committed to i.e. data centres.
Once you have identified what the ‘controllable' aspect of your budget is, the next step is to give as much control of that as possible to the business units. This is where the VFM argument really comes in. Detail the services provided to each business unit both in terms of volumes, quality and cost. Highlight which services can be changed and the corresponding cost and service changes associated with these choices. The idea here is to give complete transparency to the business and give them the levers which they can utilise to change their cost or their service levels - albeit recognising that certain changes may require involvement of more than one business unit; or even the whole organisation.
This ensures that the business unit is choosing the right level of service required at the right cost. This can only be effective if the business unit receives the benefit of making changes, or feels the pain of not making changes. It is therefore vital for IT to be charged to the business units and not as a central overhead.
Having convinced the rest of the board to take responsibility for their own IT costs you can not just turn your back and think job done. It is your responsibility to ensure that you are delivering the services in the most efficient manner. Chances are you'll have a mix of in-house capability, out sourced services, contractors and consultants. Again I am not going to talk about how you must have a sourcing strategy, that is a given, what I am going to talk about is the more practical elements of what to do.
Take advantage of the current situation. With the current market and economic crisis it is a golden opportunity to get the most out of your external suppliers. The temptation here and indeed the trend, is to push, squeeze and hammer these various groups over rates, and make them take the pain so that you look good and wipe money straight off your bottom line. This comes back to the earlier point, how long do you intend to be there? Yes this will achieve short term savings and make your bottom line look good, but does it work? Well it is back to VFM, if you pay peanuts you get monkeys.
Better to use the current climate to your benefit in other manners, maybe by talking to your suppliers and looking at ways of providing a win for both parties. Move away from traditional pricing mechanisms to ones where both sides make a win, remember that in long term deals if you force the supplier rates down now they will have plenty of time to recover it back from you plus more. Be honest with them, they know their business and want to protect theirs as much as you do. Work out strategies between you to cut costs, review where the major cost elements of contracts are and how you
are getting Value for Money (you sensing a theme?) out of it. Work with them to see how these can be reduced, you'll be amazed at how cooperative suppliers can be when they feel part of a process or feel they are providing genuine added value.
Use consultants wisely, there is always a temptation to just cut consultancy spend, but love us or hate us we have a place.
Just make sure we know our place. Use consultants for delivery and discreet packages of work, do not keep them around for protection or show. However do consider them for key Interim Roles, particularly those that involve mentoring others or those that have key responsibility for delivering change. In order to maximise value you should, depending on the nature of the assignment, look for other forms of contracting with consultants, these could include:
•?Traditional Risk and Reward - Share benefits
•?Showcase - Prove worth in set time period and if successful contract for full work
•?Early release payment - Particularly useful for Interim, agree duration but provide
bonus for handing over service early by brining on internal capability
•?Blended rates - Insist on mix of teams junior to senior and pay average rate
Next it is time to look at your internal organisation. It is tempting to come straight in and start redesigning your organisation in line with ‘best practice'. I have made that mistake once and never again. If you are taking control of an established IT department, however dysfunctional it may be, take time to understand why it is structured the way it is.
Organisations are a living entity and they evolve to suit the circumstances, to suddenly change the organisation and not the circumstances will lead to failure. I am not advocating not changing, but instead understand why things are the way they are and tackle those if indeed. My take on organisation changes is to keep it simple and make it easy for your customers to do business with you. One of the biggest criticisms I always hear about IT departments is no one knows who to talk to for which problem.
Once the new organisation is designed, then do a review of capabilities in line with new roles, do not be constrained by designing an organisation around existing skills and people. Identify any gaps in capability, then plan the means of filling these gaps but do not just think of traditional methods i.e. hire, fire and train. For key roles consider mentoring either internally or externally. This can be particularly useful if you can incorporate in part of a project. One of the best Service Delivery Managers I know came about from learning from an Interim, supporting them as they delivered a Service Improvement Project and taking over responsibility upon completion. Another value add you could insist on from consultants.
Tackle that portfolio
Now getting back to that 60 per cent of the budget that is Capital expenditure and driven by the business units. Whilst the decision to do these projects may not rest with you, how you deliver them may well do. Something that is well worth considering in the current climate (and even beyond) is to look at delivering by benefit.
Typically business cases are constructed on the basis of savings made, efficiencies gained, or revenue generated upon the completion of a project. Little thought is given to delivering parts of a project early and therefore gaining some of the benefits early and maximising the return on investment. Even if the end date of the total project completion is extended because sequencing is changed the benefits realised could be greater.
I have found this approach particularly useful during complex transition projects which can have a total lead time of eighteen months or more. Here it is advisable to start transitioning and signing off on key items that deliver benefits early and pushing those items which deliver less value out to the end of the programme. Important to ensure that contractually you can receive the benefits from the incoming suppliers prior to the whole transition being completed.
Since we have now convinced the Business Units of their ownership, these benefits will directly hit their bottom line, so they will be very keen on these changes and forever an ally, at least until their printer stops working.
I'm not Just IT
As I mentioned earlier the CIO is in a unique position within the senior management team, and even more so during the beginning of your tenure. Use this to your advantage to be seen as more than just an IT person. Your knowledge about the link between Strategy and IT can prove invaluable in helping the company develop its corporate strategy, so put your hand up to take a big part in this. This is likely to be backed up by others since you will be seen as independent.
You are also likely to be the most experienced in delivering complex transformation programmes, so use this to your advantage to get on various steering groups or project boards to help deliver the wider company strategy.
Be warned however that you need to earn the right to take on these wider scopes, don't take your eye off the day to day service, no CEO is going to trust you to deliver the company strategy if his secretary's internet access is down and she can't get on FaceBook.
My recommendation is to spend the first 100 days making a difference that will be felt sooner rather than later. Easing yourself in gently may seem the safe alternative, but by the time you start wanting to make real change your honeymoon period will be over and you will not be forgiven so easily.