Technology runs the world these days, but CIOs don’t. More often than not when a business’s mission is on the line, CIOs instead encounter the type of reaction Toyota Motor Sales USA VP and CIO Zack Hicks got from one fellow executive during the height of the company’s vehicle recalls in 2010: Our hair’s on fire; we don’t have time for an IT project.
The tendency of business execs to see IT as being useful only for projects is a huge challenge for CIOs at every size enterprise, in every industry. At Toyota, Hicks has long focused his IT team on understanding what people throughout the company do every day to shorten the time between expressing a need and getting a solution, which led to many business improvements. But even if the IT group sees itself as a strategic player, the proof is ultimately whether the rest of the company feels the same way.
Recognizing that public perception was one of Toyota’s main concerns during the recalls, an IT group that was testing a business analytics tool decided to apply it to complaints data received by the National Highway Traffic Safety Administration (NHTSA). “Within six hours, we had tremendous insight into what NHTSA’s data was actually saying versus what the press was saying,” Hicks says. The data showed some areas where Toyota could help address consumer and investor fears.
But holding that information wasn’t enough. It was just as important that Hicks, after being brushed away by the first executive he approached, didn’t back off from demonstrating IT’s potential value as a partner. (It would have been easy, he admits, to fall back into focusing on the back-end systems that were breaking under the strain of the increased volume of calls, which shot from the usual 3,000 a day to 92,000 a day during the crisis.) Instead, he took those results directly to his president, who insisted that the entire executive team look at the tool to see if they could leverage it.
The episode was a dramatic demonstration of IT’s ability to be part of the strategic business conversation.
“This is where knowing I have a team that knows enough about our business—and being willing to make that strategic bet—really paid off,” Hicks says. With this example, the analytics project moved quickly into production to help functions across the company build and sell the cars consumers want.
In any industry, a cornerstone for any attempt to change the perception of IT throughout the business is improving the relationship the CIO has with other C-level executives and the relationships maintained by IT staffers with other teams.
Members of the CIO Executive Council, a global peer advisory service and professional association founded by CIO’s publisher, have codified this relationship-management effort in a framework called the Future-State CIO Journey, where stakeholder relationships and perceptions advance along a continuum. The spectrum starts with the IT function being perceived as a cost center, moving to a credible service provider, then an influential IT partner and, ultimately, a strategic business peer that creates game-changing value.
But IT leaders must be able to translate that framework into real actions based on real problems, as Hicks and his team did, because of their understanding of Toyota’s business needs during that PR crisis.
Build a Credible Foundation
In the absence of strong business relationships, it’s easy to say that the first step is to establish the IT group’s credibility, leading CIOs say. But establishing trust is personal and complex. It’s especially difficult for a new CIO brought in to turn around an underperforming IT shop, because the relationships with the business are probably already poor. If the CIO comes in on more neutral terms, starting with a blank slate, there’s a better chance of building credibility that goes beyond just keeping the email flowing.
When Robert Webb joined Hilton Worldwide two years ago, he found himself on the hot seat. There were a number of projects already teed up for execution, and IT was still struggling to be an influential partner in determining which projects should go forward. Webb latched on to several projects that could have broader impact on the company and provide a showcase for IT’s capabilities.
“In my world, the way you build trust is by making promises and keeping promises—repeatedly—and then there’s the opportunity to build a deeper relationship,” he says.
“The worst thing any CIO can do is oversell and underdeliver,” agrees Kevin Kern, executive vice president and CTO of global operations and technology at First Data, one of the largest electronic commerce and payment processing providers.
Webb believes there’s no such thing as too much communication. At Hilton, he now has a number of channels for getting his message out: a monthly update on critical enterprise initiatives, a quarterly “technology operating review” with IT and business leaders that delves into the status of major projects, and weekly steering committee meetings for each function-specific project. (For more on Hilton’s projects and relationships, see “Candid Talk Trumps the Blame Game.”)
“It can’t be passive communication; it needs to be active,” Webb says. “Email is great for scheduling meetings, but it’s the steering committees where we’re working through really difficult issues together, and making promises and keeping promises, where the foundations of trust are established.”
Sometimes, though, you have to work up to being able to make promises. Food chain Red Robin Gourmet Burgers has grown rapidly over the last decade, and executives turned to CIO Chris Laping four years ago because the IT department wasn’t at a point where it could be involved in transforming business processes, much less any attempt to drive such change. When he came on, “No one would talk to IT unless their mouse wasn’t working,” he says.
The IT staff needed a basic shift in mind-set to improve how rest of the business perceived the department. Laping started by changing the metrics that defined IT’s goals from the standard system-based ones—such as the always-popular number of help desk tickets resolved, or delivery of a project on time and on budget—to ones that reflect business process change and value to the company. Today, all major IT projects at Red Robin are measured by business metrics. And the IT team’s work isn’t done until the business actually sees the promised benefits. “You have to build a plan that does more than just turn the system on,” Laping says. At Red Robin, those plans nurture the system beyond rollout to encourage and enable adoption of the system. “Because you know darn well that if you don’t do that, that finger is going to come pointing at you when the business isn’t getting what they expected from the system.”
Over the past few years, this has changed the game for both sides. As IT has delivered on more than just technology, IT staffers have come to expect to be involved through the entire lifecycle of the system, and business leaders and users now expect IT to be part of transformation efforts.
Even now, Laping’s people are working on one of the company’s most widely anticipated transformational advances: the Red Royalty customer loyalty program that launched in January after a two-year effort. While the back-end technology involves transactional databases and data analytics, the focus is really on achieving the business goals of creating a better customer experience and improving customer retention. A high-level business team will stay on through at least the end of this year to provide any support necessary and help improve the loyalty program to make sure it’s producing the expected benefits at a level everyone is happy with. That new role for Red Robin’s IT was formalized last year when incoming CEO Stephen Carley named Laping senior vice president of business transformation, in addition to CIO.
Managing the Relationships
Relationships forged during hard times can last, but only if you work at it, Hicks says. After the initial recalls at Toyota, when IT provided public relations assistance, Hicks found himself with new allies. The senior management team has started to look at the IT function as a provider of business solutions and a partner in process change, not just a systems provider. This affords new opportunities for him and his line-of-business direct reports to influence the business and discuss the future of each product line.
But that influence has to be applied judiciously, not all the time.
“I’m always trying to calibrate: Is this the right time to be leaning in and making some of those changes? Or is this a time when they’ve got a busy cycle and I need to back off and give them some freedom?” he says. “It’s about actively managing those relationships.”
The payoff from better relationships is that business executives listen to IT’s perspective rather than ignoring it or dismissing it out of hand. For example, when Toyota was developing its Entune “connected vehicle” initiative, Hicks acknowledged the growing importance of telematics in the automotive industry but also pointed out the potential risks of what is essentially “a device driving down the road.” Hicks asked the other executives whether Toyota could handle the public outcry if proper security and privacy controls were not built into the in-car multimedia system.
The executives got the point. The result is that Toyota’s Entune initiative is moving ahead but Hicks is now fully involved in the project and is head of the senior management task force that’s ensuring the company is creating a safe and secure service.
Sometimes, by working side-by-side, IT and other business leaders can solve each others’ problems. At First Data, CTO Kern was having trouble managing the many business requests for IT development projects from the groups that had joined the company through acquisition. While acquisition was a significant part of the company’s growth, it had created an environment where many groups were operating autonomously with uncoordinated requests. So Kern started work on a global operating model that would establish priorities for those requests. As it turns out, the business executive in charge of new-product development had similar concerns.
Mark Herrington, First Data’s executive vice president of global product management and innovation, wanted to establish processes for determining which new-product ideas should be developed. “We wanted to effect a 180-degree turn, from growth by acquisition to growth by organic product development,” he says. But one of the big holdups was the lack of prioritization for IT development requests, leading to far more customization and one-off IT systems than were healthy for the company, Herrington says. More than 280 people had authority to submit those requests, and the loudest requester often got their order fulfilled first.
So Herrington set out to create a single stream of prioritized requests from the product-development side. When he reached out to IT with this goal, he was pleased to discover that it matched up with Kern’s global operating model for IT.
Herrington and Kern have now built joint processes for both sides to manage requests for product development and delivery. All requests are now driven by solution maps that define needs and goals across functions, instead of by group or geography. The result is that there are only two streams of requests to IT: one from North America and one from the rest of the globe. “This helps us all set expectations for external customers, and for internal colleagues,” Kern says. “When we make decisions, then we all need to get into the fold and start executing.”
Eliminate the Phrase “IT and the Business”
The goal of all this credibility, trust, alignment and partnership is for IT to be seen as a true peer, engaged in developing strategy to reach shared goals. IT is no more separate from the company (in fact or language) than finance or HR. This is a goal that few have reached. But the number of IT groups that can claim the distinction should grow every year as CIOs like Hicks, Webb, Laping and Kern continue reshaping how they and their teams engage with internal business stakeholders.
“My current and ultimate goal is that there is absolutely no distinction between IT and the business,” says Leslie Jones, senior vice president and CIO at Motorola Solutions. And what she’s done should sound familiar.
When she took the CIO role at the company in 2008, the first thing she changed was the IT staff’s focus on technology. The mind-set, she says, had to become: “We’re in the business; our field just happens to be IT.”
To enforce this, as others have, she shifted the metrics of her group from IT-specific to business criteria. But she also eliminated the opportunities to fall back on old patterns—such as IT-only town halls—because she recognizes that relationships with peers cannot change if IT holds itself separate.
Over the past four years, Jones has appointed three IT people to work in other departments, and they’ve become so much a part of those other teams that Jones admits she isn’t part of their conversations and everyday decisions. Many leaders talk about embedding IT staff in business functions, or instituting functional rotations to familiarize staff with other parts of the company. Both techniques can have a significant impact if there was no interaction before. But it is obvious when those steps are still superficial or temporary arrangements, as opposed to when they are actually effective, Jones says. Those three people from her staff have proved time and again to both Jones and her executive counterparts that “they have a considerably more real, profound understanding of the business environment, needs and aspirations than they could ever hope to have by attending PowerPoint festivals,” she says. Now they are part of their business operations teams, determining strategies and plans for new customer services along with the other leaders in those groups. And then those teams turn to IT to help execute those plans.
It’s now clear to everyone at Motorola Solutions that IT’s metrics must be changed to focus on business results. Period. That’s true even after the systems have been deployed and adopted. For example, once a system is up and running, discussions must focus on topics such as what it would cost the business if there is an outage—not how much time it took IT to get everything back up. “And it doesn’t matter whose ‘fault’ it was,” Jones says. For example, when Hurricane Irene hit the east coast in September, she knew that if there were a problem with an IT-enabled business service, and a cost to fix it, that would be her responsibility.
For Jones, the primary sign of success is IT’s place on her company’s operational calendar, which identifies which initiatives will be done when. Historically, IT went through its own strategic and operational planning, but then the business asked for IT’s planning to be integrated into the companywide calendar. “Not to put too fine a point on it,” Jones says, “but the clearest indication of success is when they take money away from other people and give it to you, and that’s exactly what’s happened these last few years.”
This isn’t just the CIO’s view. Whether the discussion is about company strategy, R&D prioritization, go-to-market strategies or any other enterprise issue, Jones is there, says Chairman and CEO Greg Brown. “She’s in the fabric of the strategic and operational dialogue, and not at the tail end.”
In fact, the company is now two years into a strategy to become entirely digital, changing the processes—and therefore the systems—behind every function from the ground up. No small part of the reason that this is possible now, rather than three or five years ago, is what Jones has done with the people in her group and the role they play in the company, Brown says.
Motorola Solutions stands as testament to the fact that the goal of becoming a business peer is within reach. The real difference between this company and most others is the time spent focused on the objective. And the last step, perhaps, is one the CIO alone must take: becoming a leader who thinks not of what’s best for IT, but of what’s best for the customers, clients, users and stakeholders.
“If you establish yourself as a technology guru, or an IT advocate, you are really declaring yourself something quite alien to the business,” Jones says. “If you can establish yourself as a person of a general manager mind-set, then I think you stand a very good chance of being successful in this kind of relationship with your business.”
Contact CIO Executive Council Editorial Manager Diane Frank at email@example.com. Follow her on Twitter: @dtwfrank.