How to Sharpen Your Commercial Instincts
To develop a commercial orientation, the CIO of FirstGroup had to rethink risk, ROI, idea ownership and what the CIO really has to offer.
Thu, November 29, 2007
CIO — Information technology is one of the only professions where you can reach the pinnacle of your career as a CIO of a major organization and still have significant weaknesses in critical leadership competencies. Because of these weaknesses, we don't represent a consistent brand to our customers. The CEO brand stands for strategy and execution, and it commands a degree of trust from day one. The CFO stands for financial excellence. But what does the CIO brand stand for? One of the ways we become top performers as business strategists, transformation experts, effective managers of people and masters of our IT domain is to hone our commercial instincts. We should be good at finding moneymaking opportunities for our organizations.
Most of us (including me) become CIOs having had little experience with identifying and capitalizing on commercial opportunities. Since I was formerly a military officer, my distinctive strengths are in team leadership, and I took these strengths with me to IT-related roles where I had a strong passion. I didn't have a solid commercial orientation and experience in managing risk effectively. In this way, as a beginning IT manager, I had skills that corresponded precisely to the way respondents to this year's "State of the CIO" survey rated themselves on their proficiency in 10 leadership competencies.
But all 10 competencies are essential for a CIO who wants to transform the business by finding, developing and executing innovations that increase revenue opportunities. Innovating to increase revenue and improve productivity was among my key goals while I was at FirstGroup, the largest surface transportation company in the United Kingdom and now in the United States.
Here's an example: When FirstGroup changed its organizational structure from one of multiple operating companies to a federal structure, IT identified the possibility of managing spare parts for bus fleets (part of our engineering function) in a more coherent way across the country. We asked why we needed to have multiple parts stores around the country, and why we purchased replacement parts for buses that were still under warranty (in essence, paying for the parts twice). We stood to save a lot of money if we improved productivity and compliance.
The technology component for this initiative was a single countrywide ERP platform based on SAP. From a commercial perspective, we thought of information within the system as currency that we put in the hands of key business decision makers. Today, the same system is used to procure new goods and services. It has enabled executives to understand the company's spending in detail, to leverage economies of scale and to improve cash flow management.
