It’s not enough for CIOs to be technology experts anymore; they have to know the business, too. If the CIO “doesn’t get it,” he or she can get the boot.
Yet that dual expectation doesn’t apply to businesspeople. They get a bye when it comes to understanding IT. Rare is the CEO who knows the difference between enterprise architecture and landscape architecture.
“Businesses are confused about technology,” says Karim R. Lakhani, an assistant professor in technology and operations management at Harvard Business School. He says that many businesspeople suffer from—and tolerate—IT ignorance in part because IT discussions have traditionally focused on the technology itself rather than on how the product of IT—information—affects business operations. “CIOs should reduce the emphasis of the ‘T’ side and push the ‘I’ side,” he adds. It’s a forgotten part of the business in most organizations. The CIO has to step up—nobody else is thinking about it.”
That might explain why only 29 percent of CEOs think their CIOs are proactive leaders in the business, though 59 percent are satisfied with the CIO’s performance, according to a survey by consultancy Forrester. “This is not a good sign for CIOs,” says Laurie Orlov, the Forrester analyst who produced that survey. “CEOs have low expectations, and IT is enabling those expectations.”
CIOs need to educate their business counterparts about technology, but that is easier said than done. For example, last year Orlov produced a series of reports on how CIOs can educate their business counterparts. She says CIOs expressed strong interest in the topic, and she proposed running seminars for business executives. A CIO at a company she wouldn’t disclose hired her to come down and talk to senior management about her ideas.
When the CEO got wind of the plan, he canceled the meeting.
“He actually said it was a bad use of executive time,” she says, noting that the same thing had happened with at least one other CIO. “This is a political nightmare for CIOs,” she adds.
CIO columnist Susan Cramm explains how to market IT to business people in "IT Marketing Smarts." You can also visit this website at Forrester Research for two reports on educating businesspeople about IT. (Note: registration is required.)
Education Equals Value
Thankfully, it’s becoming easier to show real, demonstrable value from imparting more IT literacy to businesspeople. Assuming that a company where IT and the business are aligned is also a company where the business side is more knowledgeable about IT and its strategic potential, the data is compelling. For starters, 45 percent of CIOs in aligned organizations expect they’ll create competitive advantages for their business in 2007, versus 30 percent of CIOs at unaligned organizations, according to the 2007 “State of the CIO” survey. Aligned CIOs say they spend only 21 percent of their time proving IT’s value, versus 37 percent for unaligned CIOs. (And there’s a nice personal benefit for aligned CIOs: They make about $50,000 a year more.)
As the numbers show, better IT education of the business leads to alignment, which leads to better technology strategies, which lead to competitive advantage. CIOs need to connect the dots for their business executives and show them how IT education can impact their profits. We’ve found some CIOs who say there are ways to teach the business side a few technology lessons without making anybody wear a dunce cap.
At American Airlines, Monte Ford, senior vice president and CIO, bangs one drum over and over again with his staff: Don’t use technology jargon.
He knows that worrying about acronyms must look trivial to an outsider. But “it’s huge,” he insists. Here’s why: Techno-talk “creates another language and a set of barriers between you and your business partners.” Acronyms don’t educate; they actually block education by creating arcane word barriers to real learning.
Ford thinks that poor communication is the main problem between IT and the business. So he also works with his staff to talk about technology as simply as possible, focusing more on what the business can accomplish with it than on how it works. Ford wants them to do it consistently, too. In fact, whenever he’s discussing a new kind of technology or strategy, he spends a good amount of time with his staff developing a template for any presentation that will be made on the topic, to make sure the same format, terms and even pictures are used every time. He says that it’s a way of branding the IT strategy and subtly educating the business, because eventually the businesspeople see it often enough that they understand it—and can even do presentations themselves.
Learning With Budgets
American’s Ford says he has each business unit present its case for what it wants to spend on technology (using the presentation templates his group has developed). He uses the budget planning period to help drill in what the business side needs to know about technology.
“They get more tech savvy, to the point where they’re smarter about the implementation of technology within the business unit than we are,” Ford says. And when that happens, he gets to challenge his team and ask, “How come you don’t know more than they do?”
Thomas Cullen, CIO at Peet’s Coffee and Tea, says it’s important for CIOs to start education at the top of their organization. “It’s critical to get executive support,” he says. But simply trying to teach them how ERP systems work would be a disaster, he says. Instead, he delivers IT education to senior executives via carefully crafted discussions about information flows in the business. Cullen, who joined Peet’s in May 2006, set up a series of meetings with the CEO, the CFO and the vice president of operations to develop what he calls a ‘core process map’ for the business. It’s a blueprint that he will use to buy a new ERP system and set strategies for other IT needs down the road.
The four (along with a consultant hired to help develop the map and bridge any communication gaps) met four times for about two hours over a two-month period in January and February 2007 to develop the blueprint. Each meeting focused on Peet’s current business operations, possible future improvements and how IT can support them. Now that the top executives at Peet’s are better educated about IT, Cullen feels ready to sell his strategy to executives lower in the hierarchy. He has created a curriculum for teaching lower-level employees how new systems will change the way information flows and how that will in turn change the way people at the company work. “I wanted to make sure the top people knew how difficult the change management is going to be—it’ll change the way people do their jobs and how some of these teams function,” he says. He has already met with top managers just below the C-level executives at Peet’s, get-to-know-you meetings that he will use to tailor his remarks about technology when he meets with them and their staffs.
At Austin Energy, CIO Andres Carvallo and his staff organize one- to two-day “visioning” offsites to talk about technology needs. Depending on the business unit, these happen either annually or every six months and are jointly planned by IT and the business units.
Carvallo uses the offsites to acquire demo equipment and software from his vendors (at no cost) that he consolidates in a kind of central laboratory. “We take those tools and deploy them in a world with no constraints,” says Carvallo. For example, he might show executives what it would look like if, say, Austin Energy were truly paperless, or how work orders and customer notification would change if Austin Energy had fully deployed remote sensors in the field, connected to the company’s ERP systems. That lets him show the business side what exactly might happen with technology advances they perhaps have heard about from articles they’ve read, or industry conferences. He rotates executives through the labs roughly every 90 days, because he adds new pieces once every month or two.
“The executives are running so fast they hardly ever get to stop and breathe and see the ocean at peace, so it’s important to bring them in there to have epiphanies,” Carvallo says. He keeps the epiphanies from spinning into unrealistic expectations by putting project requests through a rigorous vetting process that includes evaluation by a steering committee that ranks their importance to strategy and ability to satisfy regulatory obligations. Each request also needs a business sponsor and a commitment to funding.
One of the oldest—but surest—ways to teach people new skills is to immerse them in the environment you want them to learn about. Monte Ford at American says that he has an informal rotation program in which he courts talented businesspeople and brings them into the IT organization for up to three-year stints while also negotiating with business units to take interested IT staff. When he brings businesspeople into IT, Ford likes to joke that he then gives them “full frontal lobotomies,” but the real key for American is that both IT and business executives learn how to work together more effectively. Swapping environments “feeds on itself and creates this sort of symbiotic relationship with the business unit and technology staff,” Ford says.
Despite these examples of success, Forrester’s Orlov cautions that most CIOs will find it difficult to get their CEOs on board with a technology program. CIOs can’t simply ask their CEOs whether they want to learn more about technology. A more subtle approach is required. For example, a CIO might point out to one executive that her unit has lower customer satisfaction levels or higher people costs, and suggest a technology that might help. If that fails, a similar conversation with the CEO might help.
Orlov says that business executives sorely need to learn about IT, given the waves of innovation happening in the field. She thinks businesses are falling behind a series of new technology curves, and cites things like the paucity of RFID sensors in place to help track processes and products.
“A lot of CEOs just don’t have an appreciation of what IT can do for them,” she says. And if the CEO doesn’t want to know, “the CIO is going to be hard-pressed to get the CEO to do something for IT.”
Michael Fitzgerald is a freelance technology writer who can be reached at email@example.com.