State of the CIO 2003 Best Practive #1: Get On the Executive Team

The single most important management practice, according to best practices CIOs in “The State of the CIO 2003” survey, is participation in the executive team. By this measure, Rod Hamilton, CIO with Miami-based Hygeia, is head and shoulders above other CIOs. He has what may be unprecedented access to his company’s CEO, Virgil Bretz: The two live in the same Bal Harbour, Fla., apartment building and often carpool to work. Yet they talk shop only occasionally on the way, says Hamilton, because they have regular meetings at the office. He mentions this to underscore a point. Simply having a key card to the corner suite won’t necessarily make a CIO more effective. Leading CIOs say it’s how they use their access that provides the advantage. Here’s what to do.

Join the Team

Nearly three-quarters of CIOs are already members of their companies’ executive teams, according to our survey. The other 26 percent needs to find a way to get in the club. The key that opens the door? You need to convince your CEO that technology is central to building and maintaining the company’s competitive advantage.

When Jim Prevo, vice president and CIO with Green Mountain Coffee Roasters, joined the Waterbury, Vt.-based company a decade ago, it had a skeleton IT staff and a network infrastructure so fragile that the office LAN sometimes crashed if someone tripped over a wire. CEO Bob Stiller understood that technology could help the company grow, and he created the CIO position as part of the executive team. “[Stiller] wanted the technology person that close to him so he could influence what was going on in IT and be educated about [it] without having to go through another person on his staff,” says Prevo. It’s logical to include the CIO on an executive committee, which typically encompasses marketing, sales, finance, human resources and other business enablers, so that every aspect of running the company is represented, Prevo says.

At Hygeia, which provides management services to health insurers, CEO Bretz decided early on that technology would give the company the edge it needed to compete with larger, more established companies, Hamilton says, adding, “The fact that Virgil viewed technology as strategic was one of the key motivators for me” when he decided to take the job.

Get on the Agenda

Once you have your own chair in the executive conference room, you have to make good use of the meeting time. At Hygeia, IT is a permanent item on the executive committee’s monthly agenda. Although anyone on the team can put an issue on the table, Hamilton likes to use the time to educate colleagues about the benefits and risks of new technologies and get feedback about how his organization is performing. He’s also able to set the expectations of other CXOs about upcoming projects.

This year, for example, it’s a corporate priority to do more business with customers online. But Hamilton notes there are many misconceptions about how much connectivity is possible. “Connections are a broad, utopian concept,” he says. “Each [business] executive is operating with his own understanding of what it really means.” Hamilton has taken advantage of his monthly platform to establish a common understanding about the type of online interactions that are technically and operationally feasible. Without that consensus, “there’s a strong risk marketing teams will sell something we can’t deliver or that is inappropriate technologically,” he says.

Hamilton also has a standing, hour-long meeting once a week with Bretz to talk about anything that either of them have on their minds. For a while, Bretz was too busy for the meeting and let it slide. He asked to start it up again when he felt he was losing touch with what Hamilton was up to. “There were things he needed to understand but didn’t because he didn’t give me enough time,” Hamilton says.

Speak Their Language

Prevo has a degree in business administration and work experience shepherding new product introductions at Digital Equipment Corp. When he talks with other executives, he speaks in terms of business strategy. A few months ago, he got approval for an unbudgeted expenditure on software licenses for demand planning, inventory planning and some CRM tools, among other applications. “Some of those needs we’ve identified for years and haven’t moved on” because other projects took priority, says Prevo. He decided it was time to go forward when a vendor with whom he already had a relationship offered him a good deal on a bundle of licenses.

Prevo explained to his executive colleagues the advantages of locking in a good price on software licenses that the company would need in the future. He described how the expenditure would affect the IT budget and emphasized that the purchase would not commit the company to a major new system deployment that would disrupt existing projects. “We’re not trying to build a big CRM project and turn the company on its ear,” says Prevo. It was a compelling case.

When the executive team comes to understand the business value of a project, they’ll be allies when it’s time to execute it. That’s one reason why access to senior executives is critical, even if a CIO isn’t on the top management team. At Dallas-based Centex Homes, CIO and Vice President of Information Systems Charles Irsch is not an executive committee member but says he has “an open invitation” to bring any high-level IT concerns to the group. He got help from top management when it was time to roll out the company’s supplier extranet. “They were able to work with a lot of our regional vice presidents and get them bought into the process much more quickly than I could,” Irsch says. Senior executives made the deployment a topic on the agenda for an offsite meeting, where they presented the concept, reviewed the results of a pilot project and described the next steps of the rollout.