The CEO spoke five European languages fluently, but his chief concern in meeting with me, his new CIO, was that the IT services of this $20 billion telecommunications behemoth, with its major business units in France, Italy, Belgium, Spain and Germany and many others in 24 other countries, were a Tower of Babel.
We were in his Paris office for my initial session with him. He started by reviewing the situation. The enterprise had grown rapidly in recent years, mainly through major acquisitions in several European countries.
But, he said, "when it comes to IT, they just don't get along." Language wasn't really the problem, since he had established English as the official language of enterprise IT, but there were clearly other barriers to cooperation among the various IT units. And cooperation was key to the CEO's plans for making this conglomeration work. He had recently visited each business unit to deliver a clear message: When it comes to IT, we as an enterprise would have to work together and share our knowledge. It made no sense to keep knowledge isolated, so that IT in one part of the enterprise had to learn what IT in another part of the enterprise had already figured out. Such redundancy in IT increases our costs and time to market, and we lose our competitive edge as a result.
Since those visits, though, he had only seen a token gesture here and there. In the main, IT continued to be managed in the same isolated and contained fashion as always, and most of the 4,200 IT professionals in the enterprise talked only to the colleagues they already knew, usually within the same business unit.
What followed this summary of the situation was a beautiful example of leadership. First, the CEO took the blame. "It's partly my doing," he said. "I haven't provided any kind of framework for such an open exchange on IT matters." This was followed by a questioning look that invited me to jump in and save the day. "You certainly know where I'm going with this, don't you?" his look seemed to say. I took the bait and told him that I would visit each major business unit and then present such a framework for his review and approval.
He smiled then, and gave me six weeks.
On the ground
On each stop of my whirlwind tour of the major business units, I found IT units that were crisp, professional, cooperative and mostly up to date. I was in data-gathering mode, so I tried not to think too much about the framework that would be the actual deliverable. Instead, I concentrated on what I was seeing in each unit. I learned what I could about the individual IT professionals I met and their IT unit's proficiencies. From time to time, I was asked polite but direct questions, which allowed me to discuss the challenge we all were facing. One of the messages I delivered was that business unit IT staff would eventually participate in forums to help deal with the enterprise issues more collectively. And at each unit, I always managed to ask for ideas. Everyone gave me a vague sense of a willingness to cooperate for the greater good.
The managing directors of the subsidiaries were another matter. They were so uniform in their approach and attitudes that I had to assume that they had talked to each other ahead of my arrival. The irony was that they seemed capable of communicating with each other only for the purpose of ensuring that they wouldn't have to communicate with each other.
They all requested what they called a "small meeting," where they asked for my observations on their unit. I was very positive in my responses, mentioning only a small IT aspect here or there that might need some attention. Then, the real reason for the meeting emerged. To a man, they quietly but emphatically let me know that their business had achieved its leadership position in its market by being totally in control of its own resources. The unstated but unmistakable message was that they were not about to lose any of this control, over IT or anything else, without proof positive that their business situation would somehow improve. All I could think to say was that their position was understandable and that "changes should only be introduced if they are beneficial to the shareholder." Each managing director managed to make sure that as I headed to the airport after these little meetings, it would be clear in my mind that I was the outsider from headquarters.
Piecing it together
Back in Paris, I read everything I could get my hands on that addressed eliminating enterprise IT redundancy, improving integration and getting incentives in place to ensure that the process continued across the various vertical market businesses. Taken all together, these materials just didn't deal with the issue in its entirety. I felt that the framework we needed was just outside of my grasp, but I couldn't quite reconcile the demands of the CEO and the managing directors.
I kept working over the problem in my mind, with no real progress to show for it. Then, one day the phone rang. It was two CIOs I had met on my visits, Johann in Antwerp and Albert in Stuttgart. Both of them had let me know that they understood my mission, since they each faced similar rationalization challenges. And in knowing each other and communicating regularly, they broke the enterprise mold.
"It's awfully quiet up there," they said. "We're probably going to be asked pretty soon what you are going to do. So, what shall we say?"
Ah, now here was a dose of reality.
Well, I answered, I feel as if I'm on the verge of figuring it all out, but I just can't make the final connection. OK, they said, but you shouldn't try to be a solo magician with something this important. "You know, our staffs heard you ask them for their input and their guidance, but they aren't sure that you really want it."
"Then you should definitely spread the word that all suggestions are welcome," I said.
Over the next few days, Johann and Albert helped me rearrange my notes by business unit, and I fired off a memo to each unit. I acknowledged the professionalism I had seen in each unit, and I discussed 11 areas of proficiency, including the level I'd seen in each unit. In some cases, I could say that the unit's proficiency was as advanced as I had seen anywhere. In others, I had to point out shortcomings. I asked for feedback to let me know whether I had been accurate in my assessments, and again I solicited guidance on how best to deal with the rationalization challenge as well as the managing directors' requirement of no loss of control.
And once again, the serendipity of free communication was what moved things forward. My memos found their way to other subsidiaries, which is how Gunnar and Skip, IT professionals from business units in Denmark and France, respectively, came to ask me for a meeting. They felt that they had done nothing less than solve the dilemma by devising an organizational model that would locate centers of proficiency in the business units.
I gave them my full attention.
In simple terms, they proposed that areas of IT proficiency in the enterprise would be identified and jointly reviewed by all IT staff. This review would allow us to select a business unit as the "lead house" for each area of proficiency, depending on the level of IT expertise observed in the business units. Gunnar and Skip foresaw that there wouldn't always be agreement on which unit was worthy of lead house status, but this would cause the contestants to be persuasive. It helped, of course, that there would be plenty of lead house assignments to go around.
The advantage, they explained, was that all business units in the enterprise would look to just one lead house in a particular area of expertise. The lead house could either provide the service to the other business units or tell them how others should provide it. Importantly, if investments were required to improve an area of expertise of a lead house for the benefit of the entire enterprise beyond what would be normally funded by the business unit, then the additional funding would come from corporate.
I realized that Gunnar and Skip had indeed hit on the solution. Their plan was a way to recognize specific IT expertise within business units, avoid redundant IT funding and move IT capabilities into the future, enterprisewide.
The CEO wanted immediately to bring the idea to the general management team, which consisted of the managing directors. Not one of them breathed a word about loss of control, and with no one able to articulate any downside at all, approval was unanimous. Shortly after that, the plan was rolled out, and I was pleased to see Johann's Belgian unit become the help desk lead house and Albert's German unit the network control center operations lead house. Support was universal, and the momentum became unstoppable when, weeks later, the first projects to bring lead house capabilities to where they should be were promptly funded by corporate.
As a footnote, the overall network of services between all subsidiaries eventually achieved commercial-grade status, and it became another subsidiary business in its own right. In doing so, select resources were extracted from business units, mainly under the direction of Gunnar and Skip. The business units didn't complain about this. They had been part of the whole thing from the beginning.
Al Kuebler was CIO for AT&T Universal Card, Los Angeles County, Alcatel and McGraw-Hill and director of process engineering for Citicorp. He also directed the consulting activity for CSC Europe. He is now a general management and IT consultant and graduate school lecturer at NYU, De Paul and UCLA. He can be reached at email@example.com.
This story, "Can We Get All Business Units to Speak the Same Language?" was originally published by Computerworld.