Why You Should Follow the Fiduciary Model of IT Management

Try to avoid the CIO as valet model.

March 15, 2001 — CIO —

In most organizations, the CIO job is not a lot of fun. The job is hard—harder than it should be. I've been a CIO, and I've been a CFO and a general manager, and the other executive positions were easier every day of the week. Sure, it's an honorable job that pays well and ensures employability. But believe me, there are easier ways to earn a living. In fact, many of my next-up-for-the-CIO-position clients aren't even sure they want the job.

If you want insights into the CIO reality, listen to the language. Last week I learned a new term from one of my clients, the CIO of a major transportation company. She talked about "valet IT." Valet IT happens when business executives drop off their technology wish, go do their "real job" and expect the solution to be waiting at the curb when they are ready. As a general manager, I tried to drop off my IT wish when I asked my CIO to implement a labor scheduling system for my restaurants. When he asked me to ante up and devote the resources necessary to manage the program and ensure its success, I backed off. He wasn't running a valet service; he knew (and I was reminded) that I would need to manage the IT-enabled business change embedded in my request. My goals for improved customer service and labor efficiency couldn't be achieved by IS alone. These shifts required significant process and behavior change on the part of my managers and their teams.

The reason the CIO job isn't a lot of fun (some would say impossible) is that it's too big. CIOs and their teams are operating not only as technologists but also as surrogate users. They are trying to do a lot of the work their business counterparts should be doing, such as identifying where IT should be invested, outlining the investment justification, managing the change program, arbitrating among conflicting interests, redesigning the business processes and retraining the frontline performers. At the same time, they are supposed to be designing IT architectures, building infrastructures, assembling and motivating a pool of technologists, providing excellent customer service and delivering high-quality, secure, low-cost operations. My non-IS positions were easier than my CIO role because I did not have to bear the lion's share of responsibility when I partnered with other executives. Each of us understood our respective roles and accountabilities.

Companies need to stop viewing IT as a custodial function. CIOs can no longer operate as surrogate IT users because the job has grown beyond their expertise. IT transformation is largely made up of non-IT work—as much as 80 percent of the total work, according to DMR Consulting. In addition, your executive counterparts are much more technology-savvy than they used to be. You need to get out of their way. CIOs need to go far beyond the typical solutions for aligning IT with business strategy—methods such as senior-level sponsorship, full-time project participation, colocation and project incentives. These solutions look a little anemic when you understand how big a problem valet IT is. It's time to be bold. In the words of Roger Enrico, chairman of PepsiCo, "When the execution has to be perfect, the idea isn't big enough." The big idea here is to transition from the custodial model of IT—that is, doing IT on behalf of the company—to the fiduciary model, in which you ensure that the company does IT right.

In doing this, you are not blazing a new path. Most financial and HR departments have been operating in this mode for years. The CFO's office doesn't manage every financial decision but instead ensures that the company's financial goals are well understood. The finance office then delegates the responsibility for achieving results to those who can influence the outcomes. Similarly, HR doesn't oversee each employee but instead defines the plans, policies and procedures necessary to ensure that the entire staff is managed well.

It makes good sense that technology should follow a similar evolution. After all, there are only three classes of resources that can be leveraged for success in organizations: capital, human resources and technology. Why should technology be managed differently than the other two? You can see the disparity by again listening to the language. People don't blame poor P&L results on the finance office or complain that HR manages employees badly, but in most companies you hear general managers complaining that IS has not developed good systems.