CASE STUDY: Stranger in a Strange Land

CASE STUDY: Stranger in a Strange Land

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This feature is part of CIO's Leadership Series, which began in the October, 1999 issue. Read this case study conclusion to learn how to mobilise resources, including ¥ Boosting team members' passion and motivation.

¥ Leveraging alliances to do more, faster.

¥ Getting tough with recalcitrant executive peers.

In the first two instalments of this three-part leadership case study, fictional CIO David Shepard suddenly found himself with a new boss, a new title and a new mission: to lead AusMed, his beleaguered pharmaceutical firm, through a turnaround using IT as a competitive weapon. Uneasy with the new role of enterprise leader, Shepard called on three veteran leaders to seek coaching on building relationships with the executive team and defusing political landmines (see "Stranger in a Strange Land", Part 1, CIO October, 1999). In part two, Shepard's coaches helped him focus his knowledge of IT and business process to develop a strategic plan (see "Stranger in a Strange Land", Part 2, CIO November, 1999). In this conclusion, Shepard must tap his new leadership skills to mobilise AusMed's resources to put the plan into action.

Enter the Executioner?

David Shepard bore down so hard, his pencil broke. He'd been trying to write an implementation checklist for his strategic initiatives, aligned with the business goals set forth by AusMed's new CEO, Maureen Carleton, but every time he started to write, he found a new roadblock -- and broke another pencil.

Shepard stared at his list:

1. Finish and market patient-record network. AusMed's partnership with hospitals to develop treatment protocols had led nowhere and was now being dissolved. But the treatment-data network it had built to facilitate the partnership was a technology gem, and AusMed had decided to accept consulting firm McEarnst & Co's offer to jointly develop a secure extranet component that would link the network to doctors in private practices. The resulting technology would then be commercially marketed, with AusMed's share of the earnings funnelled into Shepard's development budget.

2. Develop Home Remedy Consult Web sales channel. AusMed planned to create a Web-based direct sales channel for the company's expanding line of homeopathic remedies. Consumers would use the site, known as Home Remedy Consult, for order-taking, product education and managing their own patient case record. Shepard had imported parts of this concept from and its customer-profiling system. Pete Lucibelli, the typically uncooperative head of sales and marketing, had bought into the idea mainly because it came from Amazon. com, a company he respected.

3. Aid the integration of acquired biotech companies. The R&D units of the acquired companies would be integrated with AusMed's via a knowledge-sharing intranet that was already in place. The acquired companies' redundant back-office systems would be phased out quickly.

4. Partner with Aurora Technologies to create a modelling and simulation tool for new product development. The simulation tool would speed drug development 30 per cent to 40 per cent, giving AusMed an edge on even its fastest competitors. Shepard had already got a commitment from Aurora and the executive team.

It all sounded great, but getting from paper to execution was proving difficult. For starters, after weeks of research, the first two biotech companies targeted for acquisition accepted tender offers from AusMed's rivals. Shepard's integration team was devastated.

Next, the CIO of a prospective buyer of AusMed's patient-record network technology had asked to meet with Shepard personally and see a demo using her own data. That didn't seem a good use of his time. Why weren't the McEarnst consultants handling that?

Also, Shepard urgently needed to discuss the sim tool project with Aurora. The vendor was clamouring to get started, but Shepard had concerns about governance and resource sharing that he wanted to settle first.

The worst setback happened yesterday. One of his best people, network manager Greg Devlin, quit because of frustration with the sales and marketing group. Shepard had assigned Devlin to sales to co-manage the Home Remedy Consult project. But sales and marketing director Lucibelli had been dragging his feet for weeks and hadn't even designated a manager for Devlin to work with -- so Devlin walked. To top it all off, this morning the CEO's right-hand man, Richard Pepe, had informed Shepard that the CEO was anxious to see a demo of the Home Remedy Web site.

Shepard broke his last pencil and picked up the phone to call his leadership coaches.

Some Assembly Required

Patricia Wallington: Dave, the reason a lot of leaders fail is that they skip the mobilisation step and try to go right from the business plan to execution. They don't assemble all the resources they need. They try to deliver what they can with what they've got, but it's never going to be enough to satisfy expectations.

Shepard: I've got five IT people working full-time on acquisition integration, another three committed to the extranet development and three -- make that two -- people on Home Remedy Consult. And I basically replaced myself as day-to-day IT director by promoting someone to that role.

John Cross: It's not just getting your own resources lined up. It's getting the commitments from the line executives.

Wallington: Right, and that's what's different about leadership today. You used to be able to get your part of it done without anybody else getting involved.

Cross: Precisely. Mobilisation today is building a wider team of committed people and businesses. When you get to the rocky rapids that you always hit in any project, the quality of how well you ride them out is a function of how your team is working together. Again, this goes back to the importance of relationships that we talked about earlier.

Shepard: I thought I'd accomplished that. The business executives signed off on the plan. Some even agreed to cancel projects and reallocate the money to fund it.

Cross: Yes, but this is a journey, not a project. These solutions are increasingly a dynamic set of options, and they will change frequently. You need more than sign-off; you need ownership of the processes and their progress. I like to see the business owning the project processes. Clearly, that hasn't happened in your sales and marketing department.

Christopher Hoenig: I also find that by the time you get to mobilisation, and you're talking about lots of specifics, things have changed and people have forgotten what the goal is. It's really important to keep redefining the goal clearly and relentlessly breaking down the problem into components, making sure everyone knows who's accountable and what your risk factors are.

Cross: It sounds overdone, but it's simply governance.

Shepard: I suppose it's not too early to start providing status reports to the executive team. Then they'll see where we're being stalled or undermined, and they'll see who's responsible.

Cross: That's one way to do it. You need a process that keeps the business actively engaged and involved in the progress of the projects. For your executive team, this is part of learning that these things are explorations -- we're not laying out specifications that are guaranteed.

Hoenig: You've got to keep them informed. You can convene an investment review board or publish portfolio management reports that show where the money is going and what the returns are so far. I've worked with a client who set up a Web site so that executives could look at the investments on a portfolio or project level and get one-page status reports.

Shepard: In the near term, I've got some specific snags. First, I've got a really bummed-out integration team. The companies they helped target for acquisition were snatched up by our competitors. Now they have to go back to square one.

Cross: Motivation is synonymous with mobilisation. This should be a time when clarity of the endgame is paramount and the goals and ambitions are exciting ones. So the competitors beat you to those companies. But that shows you at least picked worthy targets. You have to try again -- now you have the added excitement of beating the competition the next time.

Wallington: Specific things you could try would be to make it a campaign, give it a name and give it symbols. Remember to recognise interim goals as the staff meets them.

Hoenig: You've always got to anticipate surprise moves from the competition. Nothing stays still and waits for you to mobilise and execute. Make it clear to everyone that they're in a race.

Cross: Yes, it's like the start of a race, and you want your athletes hyped up to win. To do that, David, you've got to be seen as very active and passionate about the process. That's a key test for a leader.

Shepard: How about very active and stressed out?

Hoenig: Well, the CIO may not be able to generate the excitement all by himself. It may be good to call in the CEO or someone else to help generate it.

Wallington: That's true. If you're not an inspirational or visionary leader -- and I'm not saying you're not, but clearly there are some people who are not going to be -- then how do you get that kind of passion into your organisation? You can get help in jazzing up your presentation. Bring in others to help. But you should work to develop your own skills. Get feedback and act on it. The more you do this, the better you'll get and the more comfortable you'll become.

Hoenig: Try sharing your feelings and motivations with your staff. Tell them why you've accepted this increased responsibility, and let them know you believe in the company. Explain how you're stimulated and excited by these new challenges.

Shepard: Then there's the joint development with Aurora. The company is pressing to start serious work on the drug modelling and simulation system, but we haven't worked out all the details to my satisfaction. I don't want to derail the project, but . . .

Wallington: You're doing the right thing in partnering with an outside vendor. Strategic alliances are a key mobilisation strategy that CIOs are increasingly turning to. For us at Xerox, it was outsourcing. But you can't let yourself be pressured to start just because the vendor is ready to start. Working with a vendor doesn't mean the accountability goes to the vendor; accountability stays with the leader. So you have to have the time, space and resources to manage the vendor. That's a key point. Many CIOs just hand things off to the consultant, and [the project] goes down the tubes.

Shepard: I don't really have anyone who can handle that oversight now. I think it'll have to be me.

Hoenig: If you can set up someone to do it -- with you as a coach -- then you should because you'll train that person to take over and help develop that person's confidence as a leader.

Wallington: I've felt it's best to develop people on the job, to take some risk -- put them in a position they aren't quite ready for -- and coach them. You can talk to them about different options as they make decisions and ask them to consider what the results of each alternative might be. It teaches them to think about what they are doing as they're doing it.

Hoenig: I have one other word of caution about this partnership with Aurora. Don't become entranced with a particular vendor. Make sure you're aware of what its competitors are doing and, if you can get them, have multiple suppliers.

Wallington: You should RFP the project. That's how you build your network and find out what other people are capable of.

Shepard: Even if I have a relationship with this vendor?

Hoenig: If it's a good relationship and they're a really good vendor, then they'll understand the process.

Wallington: And if they win it, it will be on an objective basis.

Cross: As for your partnership with McEarnst, it sounds like you expect the company to be pitching prospective customers for your network technology.

Shepard: Not only do I have that expectation, it's built right into our contract.

Cross: Well, this could be a situation where you have to do a little disciplining. Show them they've got to stick to the agreement.

Hoenig: Yes, but you don't want to go in waving the contract around. Go back to them and review the original goals and expectations in the agreement. Talk about whether you're both going to live by them or whether they need to be changed. That will force a resolution.

Shepard: I've saved my biggest mobilisation problem for last. Just like I figured, Pete Lucibelli in sales and marketing isn't cooperating. We're supposed to be working on Home Remedy Consult with that department. It's his project, and I gave him some dedicated IT staff, including my best network guy, Greg Devlin, one of those leaders I'm supposed to be developing. Well, Greg resigned this morning because he could not get anything done; there was no one from sales to work with.

Wallington: You've tried several things to win over Lucibelli. You've offered him a clean-slate relationship; you've given him your best people. Now you've got to get tough.

Cross: Pat's recommending violence again.

Wallington: Not really. But consider: AusMed has limited resources. You've scrutinised your investments down to the dollar and you have someone dragging his feet, putting a project in jeopardy. The CIO has the responsibility to make this problem clear and visible to the executive team. You should recommend pulling Lucibelli's money, pulling his project and putting the money back in the investment pool for reallocation. This way you bring it right back to the senior team and make Lucibelli explain why he has put the project in this position.

This kind of conflict resolution isn't easy for the typical CIO personality. Rather than incur the wrath of the Lucibellis of this world and jeopardise relationships by putting them on the hot spot, the IT guy will generally try to keep the project going. Then, in the end, he fails and the IT organisation takes the heat. It's a killer conflict.

Shepard: You're right, it's not easy. But it's part of my obligation to the company. I'll explain the options to Lucibelli, and his response will determine my next move.

Wallington: Good luck, Dave.


After a long, closed-door conversation with Shepard, vice president of sales and marketing Pete Lucibelli expressed a sudden and sincere desire to develop a better working relationship with the IT group and made a commitment to get the Home Remedy Consult project going immediately. Lucibelli began the relaunch by personally convincing Greg Devlin to return to the project. Back on the job, Devlin was teamed with two high-level marketing and sales managers. Eight days later, Lucibelli and Devlin led a demonstration of a prototype Home Remedy Web interface during a lavish project launch party. CEO Maureen Carleton was delighted, as was David Shepard, CIO and budding enterprise leader.

Lessons in Leadership

When CIO approached me with an idea to present a series of leadership articles, I was intrigued enough to sign aboard, mainly because I'm worried about the chief information officer. In the realm of enterprise information and the systems that generate, move and manipulate it, lacklustre leadership has never been more potentially lethal.

The Internet has profoundly changed everything, and the role of information in the new economy is critical to the survival -- not just the success -- of any institution. If an organisation wants to still be in the phone book in 2002, that realisation has got to sink in now.

In the next millennium, the major challenge for leaders will continue to be releasing the brainpower of the workforce. Competitive advantage will depend on leaders' abilities to create the social architecture capable of generating intellectual capital, which is the engine of growth, productivity and profits. It's true that information systems are the conduits for intellectual capital. But that does not mean that you, the CIO, are merely the chief traffic cop and maintenance person. With your peers and bosses on the executive team, you have an obligation to envision, promote and execute the how, where, when and sometimes why of harnessing intellectual capital.

Unfortunately, times are tough for leaders. I've been studying, writing about and consulting on leadership for decades, and I believe the problems facing today's leaders are more daunting than ever before. Whether the task is building a global business or discovering the mysteries of the human brain, there are simply too many problems, too many connections to be made, too much blurring, spastic hyperturbulent change for any single solution to work. Or any single leader to solve. As I argued in a recent article in Organization Dynamics, the Lone Ranger hero-leaders of today, the Jack Welches and Michael Eisners, will need to become connoisseurs of talent, more curators than creators, in the business world of tomorrow.

-- Warren Bennis

Curricula Vitae

Meet Shepard's Coaches

In early 1999 John Cross retired from his position as head of IT at BP Amoco PLC. Beginning in 1990, Cross presided over a radical corporate-wide transformation, cutting IT costs by 50 per cent while implementing a full-scale client/server migration. In the process, he changed the core mission of IS from providing transactional support services to acting as a strategic business partner. Cross was named by US CIO as one of the decade's 12 most influential IT executives. He is now an executive vice president with AppNet, an Internet consulting and services start-up in Bethesda, Maryland.

As director for information management and technology issues at the US General Accounting Office, Christopher Hoenig was responsible to Congress for $US25 billion in federal IT spending. He led a historic reform that for the first time brought private sector best practice principles (and the CIO position) to the federal government. He has also been an IT management consultant with McKinsey & Company and is the author of a forthcoming book from Perseus Books based on a decade of research on world-class problem-solving and leadership techniques for the knowledge age. He is now CEO of Exolve, a Washington, DC-based consulting firm.

In 1999 Patricia Wallington retired as Xerox corporate vice president and CIO. At Xerox, Wallington forged a close relationship with CEO (now chairman) Paul Allaire and established a corporate-wide leadership training program. One of her biggest accomplishments was an outsourcing arrangement that reduced Xerox's IT costs and enabled development of a new global strategy, IM2000. In 1997 Wallington was inducted into the Women in Science and Technology Hall of Fame and named by US CIO as one of the 12 most influential IT executives of the decade. Now based in Sarasota, Florida, Wallington is consulting part-time for Xerox and others.

Warren Bennis's Commentary

Fired Up or Fired Period

A big part of improving the ability to mobilise is knowing why mobilisation doesn't happen easily. To make things happen, CIOs should first understand the dynamics of bureaucracy and resistance to change in their organisations. For example, in knowledge management, information delivery is only part of the equation. People hoard data or ignore it because of a not-invented-here attitude. CIOs need to understand these resistance factors in order to motivate people to use, share and disseminate knowledge. Many CIOs don't do a good job of this, and that's probably why you see a bifurcation in the role, with companies having a chief knowledge or learning officer as well as a CIO. That bifurcation is ridiculous. CIOs should not be relegated to gathering data while other officers promote its use; the CIO should be doing both.

We know that the rate of technological change surpasses the capacity of human beings to change. So executives desperately need someone to explain the significance and meaning of the fast-moving technologies of the Internet era. This is an obligation of CIOs and an important application of their strategic knowledge. It's also a mobilisation strategy because if the CIO does this well, the executives will recognise the imperative to marshal the manpower, financial resources and commitment to make change happen.

I agree with David's coaches that, as part of mobilisation, he must demonstrate more passion and thus generate hope and optimism. These feelings are important, because investments in technology are, by their nature, investments in the future, and those can be unnerving. CIOs must encourage people up and down the line to see these investments as opportunity enablers. If David followed the recommendations in my previous case commentary -- to conduct executive education seminars, form a technology review committee and address the board of directors regularly -- I think he would be able to keep his executive team emotionally and physically involved. Status reports alone won't do it. In fact, status reports are the weakest tool of influence known to mankind.

Having reached the conclusion of this case study, I'm still very concerned about David. I don't think he understands, nor has he convinced AusMed's executive team, that the CIO role is critical to the company's strategy. Even his last statement in this instalment makes me wonder if he really gets it. He says: "I'll explain the options to Lucibelli, and his response will determine my next move." He's still waiting to see how people will react. Where is the leadership? If he doesn't get moving and show results soon, I think he'll be fired. I hope you, the reader, won't share that fate.

Warren Bennis is university professor and distinguished professor of the Marshall School of Business at the University of Southern California and a consultant to multinational companies and governments worldwide. He's authored such seminal leadership books as Why Leaders Can't Lead; On Becoming a Leader and Organising Genius: The Secrets of Creative Collaboration. His latest book, co-authored with David Heenan, is Co-Leaders: The Power of Great Partnerships (John Wiley & Sons). Bennis has been an adviser to four US presidents, served as president of the University of Cincinnati and, in the mid-1960s, predicted the inevitable demise of communism and the bureaucratic organisation.

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