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Friday | 21 November, 2008
CIO
Turnaround Artist
A turnaround CIO does not have to be someone that comes in from the outside, though. Fortunately current CIOs can learn from turnaround CIOs to use a combination of leadership, management and organizational techniques, to drive results
Andrew Rowsell-Jones 03 May, 2006 14:54:41

Take time and care to measure technical performance. Look at such things as technology operations, the quality of service and the cost of service. Also include a tryout of the health of the IS organization, their skills, their fit with their jobs and the relationships with their business colleagues.

Use this information to build a total view of the current situation so you can start formulating a short-term (six- month) tactical plan.

Stop things getting worse. Now your only priority is stabilization. Stabilizing performance means making tough decisions on technology operations, application development and the organization. An initial short-term plan that includes a tactical governance process which balances IT supply with business demand is called for. The CIO implements this by killing planned IT projects that are not needed by the business, completing IT projects in testing that have a clear business sponsor, evaluating projects in the build stage and killing anything that does not have a business sponsor.

But just looking at projects isn't enough. People, not technology, improve IT performance. During the first 30 days, turnaround CIOs review IS personnel and make quick decisions around who to keep, invest or divest. This usually involves changing an average of two to five key people in the IS leadership team.

How can you tell if things are stabilizing? When the rate of changes to plans declines, dates stop slipping and scopes become anchored, then IS performance is stabilizing.

Now make things better. OK, so the team and their performance has stopped getting worse, but stabilization is not success. The team's capabilities and outputs need to get a lot better. Stabilization only just gives the CIO and executive team time to catch their breath before the next stage of the turnaround has to begin. A turnaround needs to take the IS organization somewhere. This requires a long-term plan for consistent IT performance that incorporates people technology and relationship issues. Think of this as the strategic payoff stage.

This strategic payoff phase lasts from 12 to 36 months during which time the IS organization demonstrates its capability by delivering a major project for the business and sustaining improvements gained through new operations, skills and processes.

Strategic payoff can start to cost money too. It at this point that the business usually starts to invest in raising IS performance to meet its requirements. Achieving consistency involves increasing IT expenditures in the area of personnel costs, IT operations and infrastructure costs and IT application development budgets. If we use as a benchmark that the average IS organization spends around 1 percent of its budget on internal improvement then, for a turnaround to have take effect and deliver sustainable performance improvement, this baseline spend needs to shoot up to between 2 percent and 3 percent.

You know that the turnaround is taking hold when the IS organization routinely delivers relevant solutions and high-quality IT services to the business in a managed way. Qualitative indicators gauge the ability of the new IS organization to sustain these gains.

Learn from turnaround CIOs. So what can turnaround CIOs teach the rest of us? The first thing is how to recognize the problem and react to it. Build and execute a clear defined plan. Use a short-term plan to get the blocking and tackling down and make progress. Then use a long-term plan to incorporate what you've "learned and heard".

Turnarounds are a hard slog. Persistence drives results. The lesson learned from the turnaround CIOs is that a successful turnaround needs consistency of messages and determination of purpose.

Turnaround CIOs are also realistic about funding, spending both on organizational development and on areas of technology that need it. As a rule of thumb, the IT budget will increase between 15 percent and 25 percent and remain higher after the turnaround. The return on this investment, which can't be done on the cheap, is the business getting the technology needed to deliver its strategy.

Finally, these CIOs work on the premise that "if you are not part of the solution, you are part of the problem", and invite people to leave who are not part of the former.

Andrew Rowsell-Jones is vice president and research director for Gartner's CIO Executive Programs

More about BIAS, Sharp, Gartner
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