THE STATE OF THE CIO – A CIO’s Responsibilities

For Mary Fonder, most days on the job are consumed by thinking big. The CIO at Maysteel, a maker of casings for electrical and electronics equipment manufacturers in Milwaukee, Fonder devotes most of her time and energy to figuring out how IT can help the company compete and support business goals. She spent a big chunk of last year?her first in the job?explaining to fellow executives why Maysteel should deploy a business-to-business Web portal to make customer transactions more efficient, then setting the direction for the project. “Before I came, the senior staff didn’t know what a portal was,” says Fonder. One of her major responsibilities is to “educate [them] on the technologies that will help our company,” she says.

The role as a strategic player is one that Fonder relishes. “I’m not much of a day-to-day implementer,” she reflects, talking on the phone from the windowless, blue-and-burgundy-paneled office she took over when she moved her department into an old training room near the factory floor.

Fonder’s strategic imperative is not unusual. Whether at small private companies like Maysteel or large public corporations, the CIO job today is defined for executives such as Fonder who are business strategists first and technologists second. According to “The State of the CIO” survey, two-thirds of the 500 technology executives who responded are compensated or evaluated for their leadership and for making their companies profitable, rather than for getting projects done on time and within budget (for more about CIO salaries, see “Salary,” Page 90).

The business orientation of the job is also reflected in what CIOs do with their time. The survey found that they spend almost half of it communicating with fellow senior executives, department heads, customers and suppliers, and only 15 percent of their time learning about technology. That’s a far cry from a decade ago. When Fonder took her first position as a top IT executive in the early 1990s, she spent most of her time picking the technology to build her company’s first LAN and researching ERP vendors. By the time she left for Maysteel last year, she had redefined her job into that of a strategic adviser, and she relied on her staff for technical expertise.

In interviews, CIOs who responded to the survey say that being a business leader means looking beyond the letter of their job responsibilities. Business leadership means CIOs are held accountable for high-profile projects that will have a big impact on their company or that demand their particular skills. For instance, Vincent Laino, senior vice president, and chief information and financial officer with environmental engineering company Roy F. Weston in West Chester, Pa., works closely with non-IT colleagues to craft an electronic document management strategy for the $250 million company. The project could change many of the company’s existing business processes, which involve producing documents for clients. Laino figures that if the company goes ahead with the project, it will cost several million dollars, and he wants to ensure that there will be a positive ROI before delegating it to a project manager.

Meanwhile, responsibility for keeping systems running and projects on track still comes with the territory. “I can’t talk about new ideas if the stuff I deliver is broken and I’m not servicing [the business] well,” says Peter Lopez, CIO with Cleveland-based GE Lighting, a division of General Electric. With so much of CIOs’ time taken up by strategic responsibilities, the ability to effectively delegate daily decisions about operations, systems development and personnel to the managers who report to them is critical. “I am extremely dependent on capable people who work for me,” says James Bingham, associate vice chancellor for information resources and CIO with the University of Kansas Medical Center in Kansas City, Kan. His academic department, which has an IT budget exceeding $178 million annually, includes schools of medicine, nursing and health professions as well as a teaching hospital. As the CIO job has evolved to encompass more strategic responsibilities, the position hasn’t been transformed so much as expanded from its tactical, keep-the-lights-on roots. “People evaluate me based on whether I solve their problems or create their problems,” says Bingham. “The difference between what is strategic and what is tactical is fine at times.”

IT Ambassadors

Elias Cortez, CIO and director of the Department of IT with the state of California in Sacramento, describes his role as that of a “facilitator, like the ambassador of IT.” His main responsibility: to establish a vision for how 120 state agencies should spend $1.7 billion a year on technology and ensure that the agencies build and manage their systems according to the best practices his office recommends. He says he spends little time “worrying about the bits and bytes of technology.” Instead, he devotes most of his energy to identifying?with the help of department CIOs and directors, local government leaders and private sector advisers?how the state government can use IT to deliver services more effectively.

In this role?defined by the 1995 law that created his position?Cortez champions enterprise-level projects such as security standards for e-government systems and a statewide geographic information system for sharing public safety, transportation and economic data. When agencies express common needs, those needs become priorities that Cortez advocates with the governor and other state leaders.

Effectively communicating advice is also a major responsibility for GE Lighting’s Lopez. He says he has to understand how business operations work so that he can suggest ways IT can improve company processes, cut costs or boost the quality of products and services. But business line managers aren’t looking to Lopez and his team to generate all the ideas for new systems. Lopez says he gets so many suggestions for projects from non-IT staff that it has become his job to figure out which ones offer the greatest value. Like Cortez, he’s part of an executive-level team that decides which projects will generate the biggest payback, advising the team about which projects are most fiscally and technically sound.

And like diplomatic ambassadors who not only deliver messages to their outposts but also carry answers home, CIOs’ responsibility for identifying how IT can best fulfill business goals has a flip side?ensuring the people who work for them put business needs first. According to “The State of the CIO” survey, CIOs spend just under 30 percent of their time managing their staff. For University of Kansas Medical Center’s Bingham, that responsibility involves instilling a customer service philosophy among his 120 employees. After four years as CIO, he says he still encounters attitudes more common in the 1970s?”when the mainframe gods told everybody what to do.” As a result, Bingham views one of his primary roles to be the advocate for end users when he meets with his staff.

To develop a responsive diplomatic corps at GE Lighting, Lopez sends junior staffers into the field so that they can learn firsthand what goes on in the business. In the past year, as his group started tackling a set of sales-force automation projects, he made a gut decision to send eight IT management trainees to spend a month with GE Lighting salespeople learning how they work. “They’d build a lot of these [software] tools, so we told them to get in the car and learn how to sell.” Lopez says he probably spends half his time in meetings with IS and business staff, and these meetings?whether about customer satisfaction, project status or business planning?double as diplomatic missions. He uses this face time to identify future corporate leaders, including technology-savvy business managers. He considers this one of his most important responsibilities as a CIO and, more broadly, as a business leader. Lopez shares his observations informally with the employees’ managers, who use the input for their staff development plans.

Sometimes a wholesale reorganization of the IS department is what’s needed in order to create a group that’s more in tune with the business. Such a reorganization was one of Susan Love’s first steps 15 months ago when she became the first CIO at Johnson Outdoors, a $346 million division of the S.C. Johnson Co. that makes recreation equipment. Tasked to cut costs, Love, who spent 15 years in both IS and business positions at Kellogg, has saved between $400,000 and $500,000 by recruiting managers who can run systems development projects internally, instead of hiring consultants. Now she’s developing a skills matrix for her 30-member staff so that employees know what’s expected of them if they want to advance within the company. The matrix lists the technical competencies, “soft” business skills like communication and strategic planning, work experience and education requirements for each position. Love says she’s taken personal responsibility for this project because she wants her staff to know she cares about their career development, and she thinks it helps her retain employees.

Know Where the Buck Stops

CIOs report that a big part of their leadership responsibility involves taking charge of high-profile strategic projects. For many, that’s a choice: CIOs want their staff and executive colleagues alike to know where the buck stops. For example, Bingham says that when he began his “crusade” to improve computer security three years ago, the medical center didn’t have a dedicated security staff. Security was everyone’s?and consequently no one’s?responsibility. Bingham took on the role of evangelist, raising the issue in every conversation he had about system implementation and management, and redirecting resources to deploy basic security measures until he could hire a dedicated staff. Now Bingham has two full-time employees, including a manager who reports to him who is in charge of security, and he plans to hire a third. But he still actively monitors the progress of security projects and continues to preach about it?now mainly to explain to end users how these measures protect their data. Other CIOs say they too have the ultimate responsibility for security and, more broadly, business continuity planning, even before Sept. 11 raised the issue’s profile.

At Johnson Outdoors, Love is leading a project to define a new network operating model for the company that will result in centrally managed yet distributed IS, human resources and finance functions. These functions used to be managed autonomously by each of the company’s business units, but in the future, they’ll employ many common business processes and share more information. Each management function will define for itself how responsibility will be shared between headquarters and remote offices, but Love says the IS group is well-suited to coordinate the effort “because we understand the challenges of meeting enterprise needs while addressing local needs in particular business units.” In addition, she says, her department will be responsible for delivering systems that support the new organizational structure.

Chief Firefighter

Although they say business strategy forms the core of their job, CIOs continue to put fire fighting on their list of responsibilities because the business expects them to. Like other CIOs within GE, GE Lighting’s Lopez uses software called a “digital cockpit” to monitor whether key systems are functioning properly. Troubleshooting problems takes up 10 percent to 25 percent of his day. Mostly, he says, his job is one of oversight, ensuring that his staff is fixing what’s wrong. But he’ll make tactical decisions too if the solution requires input from people on the business side, or when he needs to prioritize which of several problems to tackle first. “If I’m not delivering systems every day, that means lost productivity,” Lopez says.

The problem-solving role is different from what it used to be, when keeping the lights on constituted most of the CIO’s job. Today, CIOs have become the crisis managers of last resort because they have the ultimate authority to reallocate money and staff?or read vendors the riot act?if middle managers can’t get a problem solved. In California, Cortez leaves all daily operations decisions to agency CIOs and their staffs, but preventing new projects from derailing is part of his official job description. Cortez has a staff in charge of project oversight that gives him monthly status reports. If agency CIOs can’t resolve their problems internally, Cortez meets with that CIO and the agency director to hash out a solution.

Bingham also takes charge of high-level emergencies. In the summer of 2001, University of Kansas Medical Center’s nursing school jumped at the opportunity to take over a national database of nursing quality information. As a business decision, taking on the database was a no-brainer because it would generate prestige for the school, but no one knew that the software for collecting the data from some 250 hospitals didn’t work properly until they tried to implement it. Bingham had to reassign staff from other projects to fix the system quickly. Ideally, Bingham adds, he would have been consulted about the project ahead of time. But he says that in a decentralized business like a university, advanced input isn’t always in the cards.

Delegation Decisions

Roy F. Weston’s Laino describes himself as a hands-on manager. But he says that since he added the CFO role to his job last year, he delegates most of his CIO duties to his two direct reports?an applications manager who is in charge of corporatewide applications and a technical services manager who is in charge of telecommunications and technology procurement, among other functions. The technical services manager recommends which computer security technologies to buy and how to deploy them. Laino says he’ll merely tweak the manager’s strategy if he thinks it’s out of line with the company’s needs. Other CIOs say their job also demands that they delegate most day-to-day decisions about projects and operations?the CIO position isn’t manageable otherwise.

Still, not everyone is good at sharing decision-making responsibility. According to “The State of the CIO” survey, only 26 percent of CIOs split their leadership and responsibility with another CIO or top manager. Bingham delegates day-to-day decision making about operations and personnel management to nine direct reports who are in charge of everything from computer services for students to knowledge management. But he still struggles to spend most of his time on strategic tasks. “I don’t get to spend as much time as I would like building a rationale [for projects] and presenting to customer groups to get their support. In a sense I’m not really following my own philosophy.”

To give himself more time, Bingham recently designated a longtime employee to be his assistant for planning and project management. The assistant now coordinates the department’s strategic planning process and projects involving more than one IS function or academic unit, and oversees the medical center’s data integration initiatives. Bingham did not create the position lightly. “The hardest thing was convincing myself that I could find an individual who could successfully lead projects without generating friction,” he says. “The other hard thing was acknowledging that I couldn’t, and needn’t, do it all myself.”

To a great extent, CIOs have achieved what they’ve strived for: They have become strategic leaders. But that achievement has come at a price. Many CIOs have taken on new leadership responsibilities?both within and outside IS?without being able to shake aspects of their old tactical duties. How satisfied CIOs are with their jobs depends on whether they balance their responsibilities in a way that they can live with. Notes Fonder, who regularly puts in 60 hours a week: “There’s always more work than time.”