RSS feedsWith economies around the world tumbling into recession, banks and countries going bust and the credit crunch biting hard, many organisations are battling to survive these stormy times.
The IT function is not magically immune from these external economic pressures and it is vital the chief information officer (CIO) provides leadership. But despite the scale of turbulence, the skills that define successful CIOs are not new: IT continues to be an essential element of managing big business change whether that was wrought by financial crises or more routine activities such as mergers and acquisition (M&A).
Critical knowledge
One CIO who has successfully steered IT strategy through massive change is Trevor Didcock, CIO at home emergency insurance company Homeserve. Previously, Didcock spent four years as director of IT at The AA, where he charted the IT strategy through a private equity buyout, separation of the company from its parent Centrica, a major business transformation programme and then the sale of the company to Saga in 2006.
“It was unquestionably the best experience I have had, work-wise. It was a real rollercoaster of change,” he says.
Key to that was Didcock’s place on the executive committee. However, IT is often on the outside of business strategy because of reporting lines, with few CIOs on the board.
“To me it is critical,” says Didcock. “If you are navigating stormy waters on your own and you are not sure where the rest of the ship is heading, then you are in trouble. And if you are not on the board and you do not get enough face time then you must get in there and force yourself onto the agenda so that what you do is in line with the business.”
Whether it is business survival, sector consolidation, M&A or radical
cost cutting, CIOs need to be able to act quickly, decisively and not be
risk-averse.
Dave Aron, vice president and research director at analyst Gartner, says: “Take
some risks. It is not a time for over-exuberant experimentation, but understand
what risks are critical to the business.”
One thing is certain, it is not a time for IT to adopt a bunker mentality and hide away. Network Rail is another company that has gone through a massive amount of change since it took over managing the UK’s rail infrastructure from Railtrack in 2002. The company’s CIO Catherine Doran admits managing IT strategy through big change is a tough job.
Make your move
“You have to manage the realities of life,” says Doran. “When the market is
in a downturn it is appropriate for IT in conjunction with all other parts of
the business to understand the implications of that and to trim sails and
ensure it invests money that helps the company survive tough times rather than
hoping it will all go away.”
Acting quickly can lead to mistakes, but that should not be something for CIOs
to fear. “In times when things are static, the most important thing is to get
the right answer,” says Gartner’s Aron. “In times of change it is not that bad
to make mistakes. It is more important to decide, communicate and act quickly.”
Based on his experience at The AA, Didcock says CIOs should learn from how chief executives and other C-level executives operate by trusting gut instinct.
“Probably eight out of 10 times it was right. If it was wrong as long as
you did not make constant mistakes it was tolerated and we just changed
courses in mid-stream,” he says. “It is scary. There are times when you think:
‘Blimey, I have made a decision on this and I do not have the right
information’, but it just feels right.”
Making mistakes also means recognising when they have been made and taking steps
to recover. Typically, the big failing here is not stopping an IT project when
it no longer becomes relevant to the business. One way to combat this is to
manage the organisation’s IT investments as a portfolio, according to Dr Joe
Peppard, professor of IS at Cranfield University’s School of Management.
“If there are investments or projects that are not relevant in today’s environment, the decision has to be taken to cut them,” he says. “A lot of organisations, once they begin a project, see it through even though the business moved on. Often a project may have been initiated by a senior executive and it is their pet project. No one likes to knock on their door and say: ‘We’re not going to continue with this project’.”
Turbulent or fast-changing times can also lead to uncertainty for employees, and CIOs must invest effort in communicating to their staff and board.
CIOs must engage these softer skills and fight the instinctive urge to batten down the hatches and spend time trying to deliver, says Gartner’s Aron.
“People are not very tolerant of ambiguity toward their role and evidence suggests IT people are even less comfortable, even when the uncertainty is positive. So, resolving uncertainty quickly is a key behaviour,” he says.
It is “horses for courses”, argues Didcock, adding that you need to know where you are going before you communicate.
“The key is to get your senior team aligned and communicating, so everyone is saying the same thing and the guys in your organisation can see their management team is totally aligned,” he says.
Explain your actions
Some CIOs are placing such importance on communication that they are
investing in communications professionals, either by using external resources or
getting agreement to use a portion of the internal PR department.
“It is a discipline, just like IT. It is not something you can approach in an
amateurish way and expect results,” says Aron.
When it comes to communicating to the board keep it simple, advises Didcock. “Certainly with the executive committee if you try to over-complicate things people will not get it you think they have, but actually they have not and then things unravel,” he says.
CIOs can, to some extent, prepare for unforeseen events through better planning, identifying potential future scenarios and having at least a couple of different options for budgeting and planning in their back pocket.
“Depending on the likelihood, being ready might just mean talking it through and having some ideas, or it might mean a full-fledged alternative budget and plan. That is a judgement call for the CIO,” says Aron.
But, especially in difficult times, the fundamentals of good IT strategy and good leadership remain the same.
“It is still about strategy. It is still about innovation. It is still about driving value out of your investments. They are the key pillars as relevant in today’s crisis situation as they were three or four years ago,” says Cranfield’s Peppard.
Didcock’s final piece of advice is “keep a hold of the rollercoaster” take a position, stick with it and make it happen. “Be resolute and, once you have worked out what you need to do, keep doing it,” he says. “If you keep changing direction, because of the complexity of IT and the cost and time taken to do things, you will end up doing nothing. So, even if it is wrong provided it is mainly right just keep going with it, recognising that you can always fix elements of it further down the track.”
