With leading platforms underlying the business’s products, direct involvement in fan engagement strategies and platforms, and connected car initiatives, Craig Charlton is at the pinnacle of technology innovation. Yet he points out, however great the strategy and however long the list of initiatives, if a CIO cannot listen, envision and engage the organisation at multiple levels, then IS won’t make it out of the back office. Adaptability is also key, he says, and there is a need to embrace multiple technologies and figure out how to weave complex fabrics to build game-changing environments while building a robust core.
Chief information officer
McLaren Technology Group
How are you influencing the products, customer experience and services your organisation offers to its customers?
As a hi-tech motorsports and supercar/hypercar manufacturer we are at the pinnacle of technology innovation. We have leading platforms underlying our products, and are constantly innovating with our customers and fans alike. We are directly involved in fan engagement strategies and platforms, connected car initiatives and in delivering underlying services to our applied technologies business direct to customers and partners.
From a CIO role perspective, ‘influence’ starts with strong relationships. You can have a great strategy and long list of initiatives, but if you cannot listen, engage, envision and enrol your organisation at multiple levels, you will remain in the back office. Adaptability is also key. A one-size-fits-all IT strategy is old school. We need flexibility. We need to be able to embrace multiple technologies and figure out how to weave complex fabrics to build game-changing environments while building a robust core.
Define the key business outcomes that you have delivered over the last 12 months and their impact on your organisation’s performance
Over the last 18 months we have driven a significant digital change programme to platform the group for the next phase of growth. This has included a complete ERP transformation in McLaren automotive, an extensive review of our design and engineering solutions in racing and automotive, changing core employee solutions to be more people-centric and embracing broader sets of end-user technology with CYOD (choose your own device). We have also been investing heavily in using in-memory, cloud computing and hosting technologies to make major speed and efficiency gains in high-performance computing and analytics.
So, overall, we are at the centre of helping make the F1 car go faster, improving the supercar and hypercar experience, and shaping our products and services in applied technologies. Exciting times!
What has been your involvement with innovation at your organisation – in particular, with products, business model and technology – over the last 12 months?
Technology innovation is our business and I cannot NOT be involved. In my tenure so far, we have evolved the IT function’s contribution from being largely shared-service back-office to front-office working closely with all business teams across the group. This has resulted in product and service innovation in our applied technologies business, where IT is now providing underlying platforms and services for the products we sell to customers. Through the McLaren automotive ERP transformation, we have taken the opportunity to enable significant business model change that readies the organisation for growth. Working with our technology partners we have access to very innovative leading-edge technology solutions, and these are critical to keep as ahead in Formula 1.
How have you delivered cultural and behavioural change as a CIO within the IT department and/or more broadly across the organisation?
We needed to re-orient IT to be more business-centric, be more involved in key decisions, and have a seat at the table of the various executive committees. We have embedded a new IT strategy of core and differential services in the last nine months and gained strong traction with the executive. IT has great expertise and capability that we needed to bring to the forefront and show the organisation what we can do. Also, in areas where we were underperforming or not stepping forward, we have improved our capability and capacity, and taken the bold forward step to drive and enable change.
Are we there yet? No, but we are well on the journey for IT to be a critical business change capability rather than a closely managed cost centre, and we are starting to be recognised as leaders in core functions such as project and service management as well as driving the digital transformation agenda.
How have you worked with your CEO and/or board to communicate whatever ‘digital’ and IT means to your organisation/sector and improve digital literacy at the highest levels of the organisation?
In a high-tech company, education isn’t the issue. It is more around alignment of strategy and speed of delivery. We have a good idea what digital means for us, especially as we practically invented IoT and big data with telemetry systems in the early 90s. For us it is about figuring out what key trends and solutions are going to enable employee productivity, allow us to win in F1, produce and sell better supercars and continue to orient our applied technologies business to be leading edge.
I joke that my challenge is huge in that everyone in McLaren thinks they are an IT manager, but there is a certain element of truth, and my role is embrace this to aid innovation as well as ensure we continue to deliver core services. We have worked very hard to show we are an innovation and technology enabler rather than a corporate bottleneck.
How have you worked with the technology and IT vendor market to achieve your business goals? How have you been able to influence IT suppliers and successfully manage your partnerships/relationships with large IT companies, SMEs and startups?
With the heart of McLaren being F1 and motorsports, we have a long tradition of working very closely with strategic partners. We currently work very closely with SAP and NTT as strategic technology partners, and they provide access to some of the best brains in the business.
We are largely an SAP house in terms of ERP: we operate using its latest cloud solutions and are innovating with its in-memory analytics products and innovation teams. With NTT, as you can imagine I need robust connectivity for F1, but also innovation, and we are working with NTT’s new secure cloud-hosting products as well as some more secret leading-edge initiatives. We also work closely with ITLab for provision of our service desk, which delivers very high customer satisfaction.
In addition to strategic and commercial partners, we need to have more traditional relationships, and in those we are constantly striving for innovation.
How have you tried to develop the diversity of your team?
Diversity has many angles – race, sex, religion and style being but a few. For a high-performing team you need to embrace diversity. Hiring in the image of self is counter-intuitive. You need different skills, views and backgrounds in order to create debate and challenge. Having just a mirror image saying ‘yes’ might make life easier, but it stifles innovation and avoids healthy tension. One example is that in the last 12 months we have driven up the number of female managers from 20% to 30%, and we will continue to grow this number.
Yes, it is a challenge being a technology/engineering company, but that is not an excuse. Diversity is the key to success. Another area is in my leadership team, where we have a hired a strong mix of skills, backgrounds and styles. I firmly believe this leads us to make better, more informed and rounded decisions, especially on how we develop the IT function and its contribution.
Describe how you organise and operate IT and how this aligns effectively with business strategy and operations
We’ve put in place a simple matrix structure that has IT directors for each business. This is critical due to the differentiated nature of the business goals. Each IT director also takes on an IT capability – namely core platforms, business solutions, and strategy and governance. This creates a strong collaboration across the leadership team as they need each other to be successful. It also keeps my leadership team small, with only five people including myself and our HR business partner. It also enables the strategy of having scale in core services and differentiated solutions by business unit.
On a broader basis the remaining 101 members of the team report to the IT directors, with external partnerships extending our ecosystem. So far it is working, but I’m not afraid of making changes if we need to. That is one the reasons why HR is on the LT, not just for LT development but to ensure we consider the human element of all of our decisions.
What strategic technology deals have you made in the last year and who are your main suppliers and IT partners?
We have public and commercial partnerships with SAP, NTT Communications and ITLab. In addition, we have the usual players in productivity coupled with some other partners supporting us with core business applications. Due to the nature of our business, we do not promote anyone who is not a commercial partner.
What are your key strategic aims for next year?
- Embrace digital.
- Renovate core.
- Innovation to action.
To put some flesh on this, we want more focus on digital transformation through cloud-based products to remove legacy, improve compute performance and rebalance capex/opex costs. We need to focus more on mobility as we have a growing global footprint and a mass deployment of mobile technology.
In terms of the core we need to renovate technology platforms in areas such as design and engineering, manufacturing, finance and HR, and leverage SaaS solutions.
Keeping an eye on innovation that is turning more mainstream is also key, such as AI and VR/AR, and figuring out how to bring these on as core products to our IT service set.
Finally organisational development is our need to develop our talent and ensure we are retaining the skills and expertise to be successful across our varied businesses and leading-edge technology solutions.
A busy year ahead!
How are you preparing for any impacts Brexit might have on your organisation?
At the minute the short-term focus is on managing the cost escalation of service and hardware providers due to the softening pound. We are seeing escalation from many organisations, which is particularly unhelpful. For products and services the jury is still out. We need to understand how the up and coming changes will impact our various industries.
When did you start your current role?
What is your reporting line?
Group CFO but I always say I work for, and with, all of the C-suite.
Are you a member of the executive leadership?
Are you a member of the board of directors?
What other emerging roles does your organisation have and what is their relationship to you?
Chief innovation/technology officer – these roles look at product and service innovation in our applied technologies business and are complementary to the CIO role.
How often do you meet with your organisation’s CEO or equivalent?
Monthly, but I meet with most of our executives one to one on a weekly basis.
How many people at your organisation does your function supply services to?
What is your annual IT budget, or your spend as a proportion of the organisation’s revenue?
What percentage of your budget is operational spend (ie keeping the lights on) and how much new development (ie innovation, R&D, exploratory IT)?
In our business this is difficult to outline as we have commercial arrangements in place with strategic partners. Looking purely at the core IT budget we are about 90/10, but with large transformation projects and commercial partners I would estimate this to be more 60/40.
Rank the following sources of advice/information in order of importance:
- CIO peers
- Analyst houses
- Industry bodies
Has your organisation detected a cyber intrusion in the last 12 months?
Are you expecting an increase in budget specific to security in order to tackle the cyber threat?
Does your organisation have a designated security professional – CISO or otherwise – and what is their relationship to you?
Yes – they are part of my organisation
Are you finding it difficult to recruit the talent you need to drive transformation?
Has recruitment and retention risen up your agenda as a CIO?
Does your IT organisation operate an apprenticeship scheme?
How many employees are there in your IT team?
Are you increasing your headcount or planning to bring skills and the ability to react to needs in-house?
Which technologies or areas are you expecting to be investing in over the next year?
- data analytics/business intelligence
- enterprise applications
- machine learning/artificial intelligence
- devices (mobile)
- devices (desktop)
- 3D printing
Which technologies or areas are you expecting to be investing in over the next one to three years?
- data analytics/business intelligence
- enterprise applications
- machine learning/artificial intelligence
- devices (mobile)
- 3D printing
What emerging technologies are you investigating or expect to have a big impact on your sector or organisation?
Definitely AR/VR and e-gaming. IoT definitely as a medium-sized organisation, but frankly we have been doing IoT for 20 years in F1, so our role is more how to bring it to life in other industry verticals.
Does your organisation do a significant amount of trade with the EU?
Does your department include technology staff from the EU?
Are you or have you been looking to the EU to recruit key skills?