CIOs can be responsible for some eye-popping IT budgets, but few will ever match the one allocated to Dana Deasy in his final year at JPMorgan Chase.
In 2016, the financial services firm spent more than $9.5 billion on technology, a 16% share of its total expenses. Around $3 billion of this was dedicated toward new initiatives, including $600 million spent on emerging fintech solutions such as COIN, an abbreviation of Contract Intelligence that uses machine learning to automatically review documents.
Deasy was responsible for all the technology systems and infrastructure across the global business of the largest bank in the United States, which has tens millions of customers and upwards of 240,000 employees in more than 60 countries.
He retired as CIO of JPMorgan Chance in September 2017. Before he was appointed to that role in 2013, Deasy had served stints as CIO of General Motors North America, BP, Tyco International and Siemens Corporation Americas.
Deasy had to manage a number of crises in his distinguished career as a CIO. His tips on how to do this were recently featuredin CIO UK’s sister publication CIO US.
Expect the unexpected
“To me, a crisis is the thing that sometimes isn’t directly in your line of sight, but yet you find yourself in the middle of,” said Deasey. “Disasters, of course, are the wild variable.”
The crises described by Deasy are less predictable than the common problems encountered by a CIO, such as cyber attacks and systems outages.
“If I go over my 30-year career, the vast majority of things I’ve been involved with and have had issues behind them have not been cyber-related,” said Deasy. “They’ve been a whole bunch of other interesting things – many of which you could have never predicted.”
The speed of change and business and IT needs makes the occasional crisis unavoidable, but they can be hard to manage when CIOs are dedicating a growing proportion of their time to transformational activities.
In the 2017 State of the CIO survey, 19% of IT leaders said that managing IT crises was a considerable part of their job, a big drop from the previous year’s figure of 27%.
Only 6% cent of those surveyed said crisis management was an area where they would like to spend more time in the next three to five years.
Practice simulations of scenarios can offer a degree of affordable help, but relying on them would be unwise, according to Deasy.
“I always tell people, if you get overly confident that your desktop exercises are going to see you through a unique crisis, then you will be woefully unprepared to deal with it,” he said.
When a crisis does emerge it is crucial maintain your composure but understand your limitations. You won’t have all the answers so will need to ask the right people the right questions.
“Be very clear to yourself and your team that you’re not the smartest person in the room,” Deasy recommends.
“Sometimes people find themselves in the middle of a crisis and because they’re the senior person in the room, they feel that they need to carry all the expertise.”
Surviving financial crises, corruption charges and environmental catastrophes
JPMorgan Chase has an impressive track record of thriving through unforeseen disasters. The bank was the only the only large financial institution in the US that posted a profit during the 2008 financial crisis, the worst economic disaster since the Great Depression.
Deasy joined the bank five years later after that, but brought with him considerable crisis management experience of his own.
His previous position had been that of CIO and Group Vice President at BP. He was responsible for global information technology, procurement and global real estate for the oil and gas giant, whose 2016 revenues of $186,600 million earned it the 12th spot on the Fortune Global 500.
He had been in this job for two years when it suddenly faced perhaps the biggest crisis in its 102-year history. In 2010, the Deepwater Horizon drilling rig exploded and sunk, causing the largest marine oil spill in the history of the petroleum industry. Then-President Barack Obama described it as “the worst environmental disaster in American history”.
The blast killed 11 workers and left the Gulf of Mexico permanently polluted. BP was forced to pay the largest corporate settlement in US history. Its total bill for the clean-up, damages and financial penalties reached $54 billion in 2015. The company was also roundly condemned for its negligence and accused of a cover-up.
While the company struggled to recover from the fallout, Deasy led a digital transformation that helped it cut $800 million of IT expenses.
He recommends other IT leaders remain firmly focused on the problem at hand, and be clear and honest with the board members about the situation.
“Absolute transparency,” is what Deasy advocates. “Here’s what we know, and here’s everything we don’t know.”
Leading a team through a crisis
Deepwater Horizon was far from Deasy’s first crisis. He had previously worked in the Space Systems division of Rockwell International, before Boeing acquired it in 1996. Deasy was responsible for the technology systems involved in the launch of a space shuttle struggling with a telecommunications problem. With seven days to go before its scheduled liftoff, Deasy had to tell mission control that the spacecraft wasn’t ready.
He faced an even greater crisis in 1986, when the Rockwell’s Challenger space shuttle broke apart over the Atlantic Ocean 73 seconds after its 10th launch. All seven crew members aboard the shuttle were killed.
“It’s very different when the role that technology may or may not have played in the problem is not clear,” Deasy said. “In those situations, we have to deal with a whole different set of problems.”
A mentor of his at Rockwell told him: “When something goes terribly wrong, it’s how you show up at the beginning that sets the tone.”
Deasy learned that maintaining a calm disposition and clear sense of direction amid chaos were crucial to keep the rest of the team focused and composed.
He encountered an altogether different crisis when he became Tyco International’s first-ever global CIO in 2003. Deasy was brought in after a number of top executives at the security systems company had been charged of looting $600 million from the company through a racketeering scheme.
Deasy and the rest of the new leadership team had to salvage the company’s reputation, finances, and staff morale.
“At that time, it was about, how do I get people to work together on technology when they hadn’t worked together before?” said Deasy. “It was definitely a stress-filled time where you needed to help sort out the company in a hurry.”
He had to keep the day-to-day operations running through the crisis and recognise the effect that the situation was having on some team members. Staff needed to be rotated at times, and carefully managed to minimise disruption.
“You have to be cognisant that the human mind and physical stamina only go so far,” said Deasy. “How do you ensure that, as people are getting ready to take a break, that you’re actually creating continuity [when bringing in other team members]?”
He also suggests that CIOs maximise the performance of their staff by being open-minded about their ability to contribute.
“If you put constraints and people think they’re coming to a crisis and have to work their role, you have a huge miss,” he said.
The CIO’s crisis radar
Most problems that a CIO experiences can be mitigated by planning based on past experiences and established practices. A true crisis has an unexpected element that makes it more complicated to prepare for and then manages.
“There was no playbook for the day the oil spill occurred,” said Deasy. “There was no playbook for the day the Challenger happened.”
He advises CIOs to pay close attention to all the different factors behind their operational responsibilities and identify any possible threats before they emerge.
“I think any good CIO today has to have an early radar system that hopefully lets them know when one of those things is starting to become problematic, or to see signs where things are starting to break around you,” he said.