Turning Around an Ailing IT Organization

The turnaround CEO is a well-known phenomenon, sailing in to rescue companies from perilous straits. Lou Gerstner, Jim Kilts, Steve Miller and many other CEOs made their reputations (sometimes infamously, as in the case of Chainsaw Al Dunlop) by righting—or at least temporarily caulking—sinking ships.

Turnaround CEOs tend to share a few traits: They are extremely decisive and fast; they are tough-minded, unhesitatingly laying off large numbers of people and slashing company assets; they are astute with finances; and they are outstanding communicators who can quickly point a new direction for bewildered employees and angry stakeholders.

The communication skills of turnaround CEOs (first noted by Harvard Business School professor Rosabeth Moss Kanter) play a large part in their typical modus operandi: to swoop in with great fanfare, announce that everything is on the table, quickly collect information and make decisions to alleviate an immediate crisis, and then look to the long-term health of the organization. Turnaround CEOs don’t spend too much time on the last point of that program; they tend to move on after six to 18 months. Their work is done. . . time to ride off into the sunset.

A similar but less famous handyman (except in the pages of CIO magazine and CIO.com) is the turnaround CIO. A few specialists, by dint of skills, personality and probably a good dose of luck, have become known for reversing desperate situations in IT. How do they do it? This magazine has written about the seven rules of turnaround IT management and the four-step “basic formula” for turnaround CIOs. They are, respectively, and in brief:

1. Get out of the office
2. Stop the bleeding
3. Find your biggest problem and fix it pronto
4. Conduct customer surveys
5. Find out where the profits are
6. Talk the talk
7. Base IT investments on ROI

and

1. Survey the beast—that is, diagnose the problem
2. Draw your sword—make it clear that all projects and jobs are up in the air
3. Dig in—quickly set up new governance mechanisms, drop projects and fire people
4. Bask in glory—bring home some quick wins

These plans look similar to the techniques of turnaround CEOs. But don’t be fooled into thinking that CIOs can act just like their bosses. I believe that turnaround CIOs have it much harder than their CEO counterparts.

Consider that CIOs never have a completely free hand. Even when they’re expressly tasked with fixing a broken IT organization, the lines between IT and the business side blur; a turnaround CIO’s plans are bound to run afoul of the interests of some other executive. Turnaround CIOs are vulnerable in a way that CEOs never are. These days, the easiest thing for the boss to do with an IT mess is call in a consultant and outsource the staff.

Charlie Feld had it right when he was head of The Feld Group, the noted CIO-for-hire and turnaround consultancy that was acquired by EDS in 2004. He was independent, experienced and armed with a stellar reputation. His fee alone made his CEO clients sit up and listen. If they failed to implement all of his suggestions. . . well, on to the next “hairball,” as Feld liked to call turnaround situations. An even better situation was enjoyed by Tom Smith, former CIO of Waste Management, who formed a two-man turnaround team with CEO Maury Myers. He had the ear and the trust of Myers as they moved from mess to mess.

For every other would-be turnaround CIO, here’s some advice. You need all the characteristics of turnaround CEOs—decisiveness, toughness, communication ability and financial acumen—plus one other. You must be incredibly, incessantly politically astute. This is not a skill often credited to CIOs, but in turnaround situations, your success, and quite possibly the survival of your IT department, depends on it.

Leading Questions is a regular column about leadership and management issues. Executive Editor Edward Prewitt welcomes your feedback at eprewitt@cio.com.