To discover what is possible, communicate that vision and motivate people to change, you need to be three different CIOs.
I don’t mean the job is so big you need three different people to handle it (although some do argue that the CIO job is too much for one person). What I mean is that you have to be three different kinds of CIO. I’ve been applying this three-part CIO approach at Kingfisher plc, the world’s third largest home improvement retail organisation, as we transform the IT function globally.
Our change journey began two and a half years ago. Like most CIOs coming into a new company, the initial challenge was to optimise operational efficiency – what I call being the ‘cheap information officer’, the first of the three CIOs. I started out by listening to everybody, seeing what our IT expenses were across our 11 markets, and making sure we would be more transparent. At the same time I showed (and continue to show) absolute passion about the business. I went out to help run stores, sit on the lorries, stand behind the till and face the customers at the service desk. That’s where we need to earn our respect as new CIOs, especially if we’re going to instigate major enterprise change. We realised that we had significant diversity in IT that needed to be better leveraged and that we needed to be ready for the changes in our customers’ ways of shopping – especially multi-channel.
It took us a whole year to get all the basics right, earn the hearts and minds of key business leaders and get the right people on the bus. We transferred several hundred IT staff, who used to be part of the local businesses and geographies, into a groupwide function called Kingfisher IT Services (KITS).
The store of the future
A hypothetical shopper, called Mr Brown, did all of his pre-shopping research on the internet (Web 2.0) leveraging the collective intelligence of his community, then went into the physical store, which was one of our large merchandising labs converted to a ‘store of the future’. Here he was recognised via his mobile phone. With his needs and profile integrated he received electronic suggestions of which of the 35,000 stock keeping units (SKUs) were relevant to his interests.
The next part of the journey was to align IT with the business. Here I assumed the role of the traditional ‘chief information officer’, positioning myself as a business partner. In retail, alignment means using IT to leverage our capabilities across different channels to actually increase sales and provide new opportunities for the brands, while using less capital. Once we had the right people on the bus, together we built, reviewed, challenged, debated and enhanced our target enterprise architecture, the IT operating model, the business case to define and implement the Kingfisher business process best practices and its underpinning priority roadmap. For example, we have refreshed all of the processes and systems in our Brico Depot stores, simplifying each process with the goals of getting closer to our customers and creating a more dynamic supply chain. As a result, our staff is equipped with real-time and accurate in-store inventory positions, and special orders are processed with the customers wherever the customer is in the store via wireless and mobile technology.
As a respected, credible IT officer and a trusted business partner, you are now positioned to act as the third CIO, the ‘chief innovation officer’. Now you can start to really innovate, explore the possibilities to create new sustainable value, and stretch the company into new areas. While change can be an aspect of any part of the journey, it’s at the innovation stage that major change becomes a possibility. Our recent innovation event is an example of the office of the CIO driving innovation. The purpose of the event was to open the minds of our most senior executives to the new ways of shopping that existing customers and future customers will be using, see box below.
Realising the store of the future is still ahead of us, but a major enabling step has been completed in the creation of a one IT entity. This is singular in architecture, operating model and staff, and serves Kingfisher’s brands in Europe and Asia. Of course people were concerned about losing their dedicated IT teams. Nobody likes to give away control of something. But we built a new governance structure to ensure that our senior executives drive how we would do this. The governance body is made up of our internal customers. Although I facilitate this group, they make the decisions on staff, services and processes. Instead of the CIO pushing and pulling, they own that agenda and they take it further than I could do by myself.
Our governing body is called the IT Executive Board or ITxB. It is chaired by one of our executive directors and has seven managing directors or operating company board members who meet on a quarterly basis (during key initiatives such as developing our strategy, they meet monthly). Under the new governance structure, we got our hands around what used to be diverse IT strategies and standards and unified them. They debated and decided on the Kingfisher enterprise architecture, the KITS operating model and prioritised the roadmap. We’re now in the middle of mapping business processes, such as multi-channel retailing, home installation services and supply chain to a matrix of our brands, retail formats and models.
This new way of working will enable us to strike the right balance between being an international group and being local as well. It has the potential to add significant value as best practices are shared and or created. I can’t reveal the business capabilities this will make possible, because it is all going to add up to significant competitive advantage that should be evident a year from now.
By Reynold Lewke and Steve Kelner
Change leadership is transforming and aligning an organisation through its people to drive for improvement in a new and challenging direction. It is energising a whole organisation to want to change in the same direction. The innovation idea or end-state goal could well come from someone else, but the change leader is the one driving the movement through the organisation’s people.
At low levels of performance, this competency is merely a basic acceptance of minor improvements. At medium performance levels it is a proactive challenging of the status quo and pointing out what needs to be changed. A CIO at this level would define the positive direction in which change should go, and make a case that others can buy into – persuading people logically to change. At high performance levels it is creating a massive, co-ordinated change across an entire complex organisation. A world-class change leader creates change across multiple organisations – functional, regional, or business-based – or creates a culture where the organisation is capable of constant change for improved results.
These benchmarks rate executive performance on a scale of 1 to 7 (see rating legend). Plotted scores are the average of all scores from the 50th to 85th percentile range. Data is derived from 25,000 plus executive assessments conducted by Egon Zehnder International.
Executive behaviour rating legend
1= Fulfills assigned tasks
2 = Would like to make things better
3 = Driven by goals
4 = Drives to exceed goals
5 = Improves business practices
6 = Redesigns business practices
7 = Transforms business model
Are you ready for change leadership?
Readers wishing to improve their performance in this critically important competency first need to examine organisational readiness for the CIO as a change champion, and then assess their own personal readiness for this strategic role. Some questions to ask include:
Is the organisation open to change?
Where has the organisation changed over the past three to five years? What was the scope of the change? How fast did the change occur?
How easy is it to influence the organisation; how complex is it?
Do you know who the players are that are key to getting the organisation to change?
Do you understand the principles of effective influence and organisational alignment?
Are you simply an implementer rather than someone who drives change?
How strong is your ability to read the political winds?
Do you know how decisions are really made in the organisation and can you insert yourself into that?
Do you enjoy or get energised by the process of engaging with others or influencing?
Reynold Lewke is Egon Zehnder’s North American CIO practice leader, and can be reached at [email protected] Steve Kelner is global knowledge leader of Egon Zehnder’s talent management and management appraisal practice group, and can be reached at [email protected]
Lessons of change
There are a number of lessons that emerge from this change effort and others I’ve been part of in my career. The first is to be humble; recognise when you’ve made a mistake, or if your team makes a mistake. Own up to it and collectively learn from it. One of the most common errors is trying to go too fast. Some in the business will get frustrated and want you to go faster. But you have to set a pace that’s a stretch but still achievable for the organisation. You will know the pace to set by looking at the culture you are working in.
Related to this, I’ve learned there is no point in aiming for absolute perfection in everything you do. If you insist on perfection, you will not be respected by your customers because we don’t live in perfect world. You need to stretch people but not beyond what is achievable for the level of maturity of your organisation. For example, in a perfect world, one would design the strategy, sell it and then get the right people to implement it. But it’s more realistic to get the right people in place, then reflect and think of where to go and how to get there.
Change has to be a team effort. At the end of day we’re all there to build a great company. There’s no point in having turf wars. As CIO you have to do the heavy lifting up front, but for change to be achievable and sustainable, the team actually must own it and make it happen. Teams also keep you modest (it’s not all about you) and humane (you will lose your team if you mistreat people). Teams can only work effectively if they have a clear, shared mandate that’s wrapped in the value you intend to create for the customer or shareholders. At times people may say, “you are the leader, you tell us where to go.” That is wrong in my view. A more effective way is recognise the challenge, the opportunities and be a catalyst to bring clarity, focus and continuously look for ways to improve.
Finally, through all stages of the journey, you cannot lose sight of operations. That’s your bread and butter, and you need to keep an eye on it and have a strong team to which to delegate. IT operations have to run like a Swiss clock or your change efforts will grind to a halt.
I’m in a lucky position being empowered to enable change to happen. When I look over the parapet, I see a lot of CIOs who have tense relationships with their CEOs or CFOs – they are mired in cost-cutting, in complaints about services. If you are in that position, you will not be consulted on the change agenda in the wider arena of your company. You’ll be part of somebody else’s strategy. You’ve got to build relationships through credibility (cheap information officer) and become the trusted business partner (chief information officer) who inspire and demonstrate the art of the possible (chief innovation officer).
And never be satisfied; there is always a better way.
Jean-Jacques Van Oosten is group IT director of Kingfisher plc, based in London, and a member of the CIO Executive Council.