The Business IT Strategy Board

How Kathy McElligott, CIO of Emerson, stays aligned.

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Kathy McElligott became CIO of Emerson, a $24.7B global manufacturing and technology company, in 2010.  When she started her job, the IT organization was evolving from the start-up of a wide array of centralized shared services to instilling metrics and a commitment to consistent delivery.  “When I first came in, we were focused on blocking and tackling to bring our IT shared services up to the level of performance required by the business,” says McElligott. “We had to get that noise out of the way before we could start focusing on the future.”

While the IT organization was working to improve its service delivery, there also were a variety of opportunities to broaden the strategic use of information technologies across Emerson businesses.  To sort through these alternatives Emerson did what it does periodically when the company transitions to a new phase – they set up a task force.  The team of McElligott, along with  several of the most senior operational and functional executives, took a hard look at IT, how it was working, how it was structured, the scope of responsibilities and how better to engage with other leaders in the company.

“What came out of that task force was the realization that the IT organization was structured correctly, but that we needed a mechanism at the enterprise level to coordinate our priorities with the business strategy at work across the rest of the company,” McElligott says.

The Business IT Strategy Board

So, in February 2011, McElligott along with Ed Monser, President and COO, and Charlie Peters, Senior Executive Vice President, formed a “Business IT Strategy Board” that included roughly 25 executive level representatives for all of Emerson’s major functions and lines of business. 

The board meets four times a year and holds “deep dive” discussions on topics including information security, using Oracle as a foundation for solution selling, and the digital customer experience. “This meeting is not about reporting out on the status of projects,” says McElligott.  “We spend at least an hour of the meeting doing a deep dive into a specific area. The whole idea is to initiate a lively discussion about business strategy.”  For its Oracle strategy session, they  invited Safra Catz, Oracle’s President to join  along with Cindy Reese, Oracle’s SVP Supply Chain and held a discussion in which all shared their  perspectives on Oracle implementation strategies and supply chain optimization.

After the first few Business IT Strategy Board meetings, McElligott could see that IT was aligned with its business partners, and that she and her team had a solid roadmap for the next two years. But when it came to business changes that were more than two years out, McElligott was less certain. “We are a manufacturing and technology company with an innovative engineering culture,” she says. “We have sensors in most of our products, and our solutions are getting much more data and software driven. Even with the Business Strategy Board in place, I wasn’t sure IT was working on the right projects for where our business was headed.”

The Strategy Workshop

As a way to get the Business IT Strategy Board focused further into the future, McElligott enlisted IBM to interview a set of key executives and to lead the group in a one time, day-and-a-half strategy workshop. 

“We came out of workshop with the realization that we have to put the customer at the center of all of our business initiatives,” McElligott says. “That concept helped us to take a fresh look at our investments and projects and rethink much of what we are doing.”

McElligott and the board re-examined all of their current initiatives and mapped them to the customer. “From there, we restructured and reprioritized programs that did not have a direct customer focus,” she says.

For example, Emerson was in the middle of a supply chain process improvement program.  “We were driving that project by starting with our manufacturing process and supplier integration,” says McElligott. “We realized if you don’t start with the customer, their priorities, and their timelines, you won’t be able to fulfill your orders correctly.  When you spend the time upfront to understand your customer’s challenges, that knowledge drives all of your follow-on activity.”

Advice

Enlist key leaders:  “If I had tried to put the Business IT Strategy Board together on my own, I would never have been successful,” says McElligott.  “You need a couple of the leaders on your side.  It was essential that two of our most senior leaders from the Office of the Chief Executive thought that the Board would be a valuable use of their time.  They bought into it and helped identify the other executives.”

Do some pre-selling:  Now that the Business IT Strategy Board is up and running, McElligott still spends a decent amount of time in one-one-one discussions between meetings testing thoughts and opinions on current and future strategic topics, “It’s good to know where people stand individually before you get everyone together in a room,” she says.

Avoid status reports:  “Our first Business IT Strategy Board meeting was structured more towards status updates and report outs on key projects.   But that wasn’t the purpose of our Board,” says McElligott.  “The purpose of the Board is making sure we are working on the right things.” So she changed the format of the meeting.  “Rather than have a series of report outs, we structure the topics to provide some education of what is happening in the business, industry or technology landscape followed by what IT initiatives we feel are required for our business to be successful and then encourage discussion.”    

Leave your assumptions at the door: “Sometimes you think you know what the business is thinking, but if you really listen to the dialogue it might actually take you in a different direction,” says McElligott.  “A recent discussion on our digital customer experience helped me see that we did not have full alignment on the initiative.  That has prompted additional discussions with each of the business platforms and some tweaking of the scope before we move forward.”

The Benefit

Meeting four times a year gives McElligott and her business partners a rhythm and routine for staying connected on strategic issues. We don’t have to wait for annual strategy meetings,” she says. “And the feedback we get from the leadership team is that they really enjoy these meetings. “

About Kathy McElligott and Emerson

McElligott joined Emerson in 2000 as vice president of information technology for the Emerson Power Transmission division. In 2003, she was promoted to vice president of information technology for the Industrial Automation business, a title she held until her promotion to CIO. Prior to joining Emerson, McElligott spent 22 years with General Electric, holding multiple information systems leadership roles, including CIO of supply chain for GE Aircraft Engines and IT manager of the Cycolac business of GE Plastics. McElligott received a bachelor’s degree in computer science at Kent State University and a master’s degree in business management from Xavier University.

Emerson (NYSE: EMR), based in St. Louis, Missouri (USA), is a global leader in bringing technology and engineering together to provide innovative solutions for customers in industrial, commercial, and consumer markets around the world. The company is comprised of five business segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Commercial & Residential Solutions. Sales in fiscal 2013 were $24.7 billion.  

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