New Year’s Resolutions for CIOs

At this time of the year, most businesspeople are feeling a little ragged. The holiday season is a mad dash, as preparations and parties start colliding with current-year commitments and the coming year’s attractions. With all that going on, it’s easy to lose perspective on one’s career progress and even harder to identify the smart moves that will make a difference going forward.

In the hope that you will find a few minutes of peace in the next few weeks, I take this opportunity to share some insights in the form of New Year’s resolutions. The following is the antidote for my “Ten Mistakes CIOs Too Often Make” column published earlier this year and is inspired by clients, friends and readers who have mastered the ability to maintain focus and optimism in the midst of the daily grind.

1 Spend one day a week with the “one level down” and the “front line.” Seek information that will broaden your perspective and ensure that you live and lead in the real world. “One level down” is the code phrase of a grocery retail CIO who believes that if you want to influence the opinions of your peers, then influence the opinions of their direct reports. Another great source for insight is the frontline employees of your organization.

2 Fix the top service issue. Delivering the basics establishes the watermark for your organization’s credibility. All your other accomplishments will suffer if you are unable to deliver a level of service consistent with what your business delivers to its customers. Stop ignoring it or excusing it; there are a million good reasons why your service is the way it is, but none of them matter. Analyzing the underlying root causes and formulating a workable improvement program will require heavy involvement on your part.

3 Deliver 5 percent annual efficiency gains. Every executive is expected to deliver efficiencies without waiting for a mandate from above. Beyond the one-time benefits of consolidation, the only way to deliver efficiency in a responsible manner is by reducing demand or the cost of delivering each “unit.” Although efficiency programs require an understanding of your operational costs and underlying cost drivers, many organizations derail their efficiency programs by spending too much time on comprehensive cost analysis. Your IT managers usually know the systems that take the most time to support, the customers who are the most demanding and the services that constantly require exception processing.

4 Facilitate an IT-enabled business strategy. Strategy is a demand management tactic. Establishing priorities and criteria for future opportunities are two of the most important outcomes of effective strategy-making. Many CIOs are sheepish about strategy-making efforts outside the four walls of IT because they are concerned about participation from the business side. Find consultants who can facilitate a process that answers “what should we invest in and why” in six half-day sessions during two to three months. Get participation at the broadest and highest level you can without exposing your backside. Since strategy is iterative, an initial process attended by junior executives will provide the positive word-of-mouth necessary to institutionalize the process at more senior levels over time.

5 Make the CFO the bad guy. Balancing IT supply and demand requires that someone says “no”—but it’s in your long-term interests that it not be you. Fortunately, the CFO is chartered with the job of allocating scarce financial resources, which allows him to be the heavy without anybody taking it personally. Repeat after me: The CFO is my friend. Stop trying to placate the CFO’s constant nagging about elusive IT value. Instead, put him in the driver’s seat. Using your company’s existing capital budgeting and decision-making practices, help the CFO apply good financial disciplines to technology investments (including setting an overall IT funding limit, determining portfolio allocations for return and risk management, establishing corporate oversight on strategic investments while delegating tactical expenditures to business units, staging funding, assigning value accountability and monitoring value delivery).

6 Make the CIO the good guy. Build a service organization that shows respect and appreciation for your customers. Ensure that senior IT leaders have good soft skills, including empathy, network-building, perceptiveness, teaming and persuasion (for more information, see the book First, Break All the Rules). Design an organization that has the ability to flex capacity by allocating internal headcount on those positions that gate supply—project managers, business analysts, and senior application and infrastructure design engineers.

7 Show project value in six months. Build your credibility and reduce project risk by requiring that all IT-enabled business investments deliver value within six months. Increase your odds of doing so by understanding what drives value and sequencing these “value dependencies” as early as possible. Claim victory for all progress made within the scope of the investment, whether it’s IT-related or not. Follow the lead of a travel distributor who implemented a supply chain integration program with 18 releases over five years. The company understood that improvements in quality, cycle time and efficiency required many big changes in tandem: consolidated organizations, new order management and fulfillment processes, a single customer image, enterprise visibility on orders and status, and integration with key external vendors. The six-month value rule forced them to sequence—consolidation of the organization followed by establishment of metrics, an integrated customer database, enterprise order transparency, and so forth.

8 Plant architecture on terra firma. Put an end to the fancy, far out, who-really-understands-it architecture group. Make standards job number one. Technology retirement, with the goal of minimizing the technology footprint and operating costs, is job number two. Use some of your hard-earned political capital to ensure that IT retains authority over technology standards. Set priorities based on application requirements for the next two years or so and invest ahead of need in a disciplined manner. You can do this by pacing investment in line with business growth and self-funding through efficiency savings.

9 Manage by the numbers. Anything worth doing deserves to be measured. Run IT like a business by monitoring value, productivity, service and retention trends. Drive value and efficiency using operational metrics—not just financial ones. Monitor project success based on cycle time, use-case analysis and usage.

10 Manage your share of mind. Challenge yourself on the feasibility and importance of your tactical plans by summarizing your annual objectives, initiatives, accountabilities and measurements on a single page (no 11-by-17 sheets). Make choices about what you will follow and track, and acknowledge that other people will be responsible for activities that never make it onto your page.

If, on reading this, you found an idea or two that resonated, please drop me an e-mail in the form of a New Year’s resolution. Throughout 2004, I will periodically resend your e-mail back in the hope that you will stay resolved to adopt IT leadership behaviors that make your time in the CIO role full of many happy returns.