Strategic Orientation: How To Engage Business Executives And Make IT Strategic

Too often CIOs sit and lament that their business doesn’t provide them with a clear strategy to map to—something complete, enterprisewide and wrapped in a nice leather binder. I was tired of being one of these CIOs. At Toyota, we were making significant investments in functional systems for discrete parts of the business without an overall view either of how these systems might be better leveraged across the supply chain or how the business would need to operate over the coming years. IT was all about service, alignment and value; we had no rights to influence the strategic direction of the business. We were always behind the business waiting for the handoff. I determined to change that.

I wasn’t so overt as to say I’m going off to establish a beachhead in the strategic planning department. I simply started a series of focus groups with individuals from the planning side of IT and mid-level managers from the planning organizations and line operations on the business side. I deliberately started at the middle level of the organization. When you get that level of people together and make it comfortable for them to speak up, they will share where they see gaps and opportunities. In fact, they were pleased that someone was asking for their input. And, because managers from these different organizations generally work separately, they were happy to be together in a room with their peers from across the company. To take away any pressure, we asked them to focus 10 to 15 years out. If you’re talking three years out, it’s more real. Farther out, you can fantasize a journey, but use the train tracks of the business to get you there.

ALIGNMENT TOOL

You can download Barbra Cooper’s template for aligning business strategic with IT (in Excel spreadsheet format) by visiting this link on the CIO Executive Council website.

One area we discussed was quality. We asked, can we maintain our relentless focus on quality with larger volumes and increased complexity of product lines? What would that mean 10 to 15 years from now to our current business processes, our customers and our application portfolio? What effect would telematics have, when every Toyota on the road is equipped to send maintenance and performance data back to the company? We looked at how we would connect from Japan all the way through the supply chain to our U.S. dealers and customers.

STRATEGIC CIO

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After these meetings, we had enough information to triangulate and coalesce 10 business themes. We took our vision as many years out as we could go. I brought the results to the top executives at the company. I didn’t want to scare them, so I was careful to frame the presentation as a request for advice. I told them: As you know, we have a real challenge in IT with more demand than supply, and we want to try to get ahead of the curve. The more I can anticipate—in as refined a way as possible—the better we will be at fulfillment. I wanted to get them comfortable talking about the future and get their opinions about the business drivers I was putting on the table. They suggested some edits and signed off on the strategic vision.

A New Strategic Picture

My next step was to use those drivers as compass points in a multidimensional model that would frame the issues for the top executives. We mapped aspects of our business, such as the supply chain, to their associated organizations (such as aftermarket parts) and business processes, as well as the affiliated systems and their fully loaded costs. (We already had done a detailed audit of all of our systems costs, so those data points were accessible to us.) Then we ran a regression analysis to derive risk parameters such as the age and cost of systems and the skill sets needed to support them. We plotted points of risk on the model.

When we were finished, our executives could see on a single sheet of 6-foot-by-4-foot paper everything they needed to draw conclusions regarding the risk associated with our strategic business drivers and the systems that support them. For the first time our executives could see how changing business conditions anywhere along the supply chain would affect their IT portfolio. We also created a second layer of information to show the real-time situation and the short-term factors in play.

The conversation changed instantly. The executives were able to see for the first time how applications—whether our 30-year-old legacy systems, our newer distributed systems or the technology we were planning to bring in—mapped to their business drivers. They now understood the correlation between their ability to go to market, what the cost impacts would be, and how many competing interests would be vying across the enterprise at the same time. One executive, contemplating the challenges a few years down the road, looked at his watch and joked, “Thankfully, I’ll be retired before then.”

Connecting Silos

Four years have passed since I began the effort to make IT a core element of our strategic planning process. I’ve realized that you can’t change the fact that silos exist—that the head of marketing is going to worry about marketing and the head of engineering is going to worry about engineering. But you can help them to articulate together a set of broad, long-term objectives. We have succeeded at getting executives comfortable talking about strategic issues at an enterprise level. Meanwhile, they appreciate better the complexity and challenge of integrating business processes, IT and go-to-market strategies.

My role has changed. Fifty percent of my focus is now on business engagement and strategy. My attention to the future of the business has also helped focus my attention on the next generation of IT leaders in the company—the people who will succeed me. I want to see a day when, in an executive committee meeting, we CIOs are no longer asked solely about how our projects are going and the condition of our operations, but are also asked for our strategic perspective. Business executives should see the CIO as the person with the best overview of company operations—and thus the person best positioned to look strategically at how to optimize her company’s go-to-market capabilities. We are getting there, but we have to drive ourselves.

Barbra Cooper is group vice president and CIO at Toyota Motor Sales USA and is a member of the CIO Executive Council.