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The World According to Deasy

The World According to Deasy

Siemens' Structure

Siemens has five types of CIOs

More than 50 regional CIOs who support a specific geographical area - 14 of them support a specific vertical businessOperating company CIOs who support a specific business with a large geographical area like the United StatesCentral office CIOs who support specific staff functions like HR, finance, legal, corporate communications One global CIO and two corporate CIOs - one for the Americas and one for Asia/Australia. As CIO for the Americas, Dana Deasy is responsible for 21 operating company CIOs and six regional CIOs.

Those of us IT executives who spend weeks and months on the road wear our frequent-flier statements like Purple Hearts. One friend of mine has logged 90,000 miles, and another claims to be in what she calls the "six-digit club." I, however, have them both beat. With more than 150,000 miles under my belt this year, you name the city, and, chances are, I know the airport. It's my job as vice president and CIO for Siemens Corp. to spend almost as much time in the air, shuttling between engagements, as I do on the ground. On any given week, I'm off to Munich, Germany, or Mexico or Toronto or Atlanta, meeting with CIOs and CEOs and CFOs to make sure everyone's on the same IT page. I fly in the name of global alignment. n Siemens, my employer, is a 150-year-old company operating in six major industries: energy, health care, information and communications, transportation, industry and automation, and lighting. The company has offices in 190 countries, employs more than 460,000 people and was slated to pull in more than US$70 billion this year. We are, in the truest sense, a global organisation, divided into four geographic regions: Europe, Asia, the Americas and Germany, where we're headquartered. This coming year, for the first time in company history, the Americas will surpass Germany in revenue, earning more than US$25 billion on its own. It will soon become the largest component of this international giant. n I'm the corporate CIO for the Americas and responsible for coordinating the efforts of 26 top-level IT executives from Canada to Argentina. At an organisation where most subsidiaries operate in the same industry, such a task might be simpler. But at Siemens, where one operating company makes locomotives, another builds power plants, a third produces ultrasound machines, and a fourth makes automotive components, it can be quite a chore. At quarterly meetings, the first thing out of everyone's mouth is, "We're different," and by and large, that comment is right on track. A diverse product portfolio breeds different business priorities, and each of these CIOs has his own ideas on how to use IT. How do you reconcile these divergent opinions? How do you align all facets of the business to work toward a common goal? These are the questions I ask myself every day.

Alignment By Index Card

When Siemens hired me in the summer of 1999, I knew that my success hinged on establishing positive relationships with a vast number of people. The challenge was to establish working relationships with more than 75 CEOs, CFOs and CIOs, not to mention a number of key corporate executives. One of my key tenets for achieving alignment is that you must concern yourself with how your actions will be interpreted by others. Do they understand my intent? How will they perceive this decision? I vowed never to commit to anything before thoroughly examining these questions.

Still, nobody trusts a corporate officer he doesn't know, so before I could talk to my CIOs about strategic plans, I had to show them I was on their side. Three weeks in, I joined them at a meeting in New Jersey, where I introduced myself as a former divisional CIO who spent years dealing with "meddlesome" corporate folk. I told them about my days at General Motors, where, as CIO of the Locomotive Group, I learned how to help my own business and convince corporate technology executives that I believed in their strategic mission too. These stories served a subtle message: Not only was I one of them, but I knew how to "get around corporate" and would look out for those who tried. This approach worked wonders.

With introductions out of the way, I set out to research my alignment plan. First, I flew to Munich to talk with the global CIO about his strategic hopes for the future. In a series of meetings, I learned about the Siemens global IT road map and that my success in his eyes would be measured by my ability to execute this road map throughout the Americas. Next, I flew back to New York City to meet with the president and CEO of Siemens in the United States, Gerhard Schulmeyer. Finally, for the following six weeks, I racked up frequent-flier miles by the thousands, visiting CIOs in the Americas, asking them about their expectations of me. (See "Siemens' Structure," left, for an understanding of the different organisational levels of CIOs within the company.) In bars, at restaurants and (occasionally) on the golf course, these people shared sentiments they rarely had expressed in formal surroundings. Not surprisingly, the topics were all over the lot. It became apparent that there was a diverse set of opinions and priorities on how to best implement the common IT road map. It was clear I'd need to devise a strategy that met the needs of the global CIO, supported the business objectives of the CEO and president, and addressed the issues raised by the operating and regional CIOs. This was no easy task.

I took my first stab at it one night in the office at my home in New Canaan, Conn. There, sitting on the floor, I surrounded myself with index cards, onto which I had written ideas from all three constituencies. I began to compare and contrast global priorities, U.S. corporate priorities and regional CIOs' priorities, moving cards from one pile to another and then back again. Our corporate priorities included a companywide IP backbone and the implementation of a common public-key infrastructure security solution. Surprisingly, the global CIO and the operating company CIOs agreed on quite a number of topics, such as deploying Windows 2000 as a standard desktop operating system and standardising on a common intranet portal.

I decided to limit the amount of time I spent worrying about these latter things; they were the initiatives for which there already was alignment. Instead, I focused on those issues where corporate executives and our CIOs disagreed, two of which were regional telecommunications sourcing and the creation of e-business solutions.

In the areas of telecommunications, while the CEO wanted to use a single telecommunications WAN provider in North America, the operating companies' CIOs expected the freedom to choose the provider that best met their individual needs. However, that issue seemed less pressing than the need to address disagreements over e-business. So I set telecom aside for the moment.

Part Psychologist, Part Politician

Because Siemens had never developed a companywide e-commerce strategy, operating company CIOs had been off developing their own e-business strategies for years. While many of these strategies were worthwhile, few - if any - of them worked together, and some entities were spending millions of dollars every year. I believed we could cut costs across the board by leveraging the talents of individual IT departments to build a unified e-commerce solution. Now, it doesn't take a genius to understand that you shouldn't tell CIOs of a decentralised company what to do. With that in mind, I acted more like a psychologist than a technologist. Instead of giving them a mandate and demanding that they comply, I opted for the more diplomatic route, a strategy I call "self-realisation."

First, I asked the CIOs to explain publicly why they thought a global e-business effort would succeed or fail, then I listed all of their reasons on a dry-erase board. A large number of CIOs were skeptical that we would succeed, primarily because most centralised programs at Siemens had failed in the past. The others claimed our businesses were "too unique" to find common ground. This upset me, and once their lists were completed, I shared with them a list of common goals I had made on my own, gleaned from my conversations with the individual CIOs. To their surprise, our lists were almost identical. They were shocked, but they were listening.

I further needed to get these leaders to realise that everyone would fail on their own and would succeed only as a group. My secret: to create fear of failure by bringing up tough questions about execution. Most of the CIOs recognised that they were being held accountable for delivering e-business solutions. But where were they going to get the money? How were they going to recruit the required talent? How were they going to create a compelling ROI business case? And did they fully comprehend the complexities of developing a comprehensive e-business transformation strategy? These and many other questions were difficult to answer and left many wondering how they could solve this on their own. By the end of the meeting, the facts had spoken for themselves, and pretty much everyone agreed that a unified solution was the right way to go. After several working meetings, we received approval from the President's Council this March and have been developing new applications ever since.

While this e-business alignment produced the results I was hoping for, my attempts to unify and outsource our region's previously disparate telecommunications choices actually turned out to be a bit more frustrating. CIOs had come to cherish the authority they had over telecom, and as soon as we announced an intention to investigate a change, many CIOs expressed trepidation at the idea of relinquishing control. It wasn't just about power, it was about risk. Publicly, at meetings, they assailed the alignment plan as "inefficient" and not in the "best interest" of their operating company. Privately, however, the CIOs admitted that what concerned them most was the notion of relinquishing control to a service provider in which they lacked confidence - or one that would no longer be accountable to the local CIO in case something went wrong.

It was clear that this particular effort would require special handling. I would have been stupid to make a bold move and simply yank on the reins, but at the same time, an effort this sensitive required a more radical approach than a laissez-faire strategy of self-realisation. After days of deliberating, I decided to treat my CIOs like "constituents" and get political. Like a presidential candidate, I launched an international, face-to-face lobbying effort that sent me to 15 cities in three months. During that time, I constructed a platform and repeated it over and over again. Yes, outsourcing telecom would free up resources and money for other projects. Yes, the new vendor would involve them in the switch-over and service delivery processes. No, you would not lose all say in issues relating to communications.

Recently, my "constituents" cast their votes, abandoned their reservations and supported the alignment. During the next 12 months, the new provider will assume responsibility of all our telecommunications, turning Siemens from an inefficient user of global communications to one of the most sophisticated companies in the world. Achieving a common WAN solution and the shared e-business environment are both victories for corporate leadership, and yet individually, each demonstrates how championing alignment requires a bevy of skills. Sometimes, you need to soothe concerns with Socratic strategy. Other times, you need to pull a Bill Clinton, stumping and stumping until you garner the support you need. This is the life of a corporate CIO.

Looking Ahead

Even with these two major alignment efforts behind us, there's no rest for the weary. Week after week, I'm still travelling all over the Americas, living in airports as I visit the CIOs. These trips are as much to facilitate personal connections as they are to make sure the pipeline for change is clear. I always visit an operating company's CEO and CFO, since I believe these executives are also the keys to true change. In the age of globalised business, getting CIOs aligned with an overarching IT strategy means nothing if they don't receive support from their local executives. CIOs, CFOs and CEOs at all levels of the company must be on the same page. To facilitate this, I also create the opportunity to speak at Siemens CFO and CEO councils on a regular basis. This combination of information and relationship-building seems to be working well, and many executives in the Americas have started to understand and embrace our common IT road map.

If my schedule weren't busy enough, overseas interest in globalising our e-business alignment strategy has necessitated additional trips to Munich, where I've been meeting with corporate-level counterparts to help them navigate endeavours of their own. Throw in my usual responsibilities of representing the Americas at monthly and quarterly corporate planning meetings, and it's no wonder I sometimes go weeks on end without seeing my wife and son. Then, of course, there's our next big regional alignment - an effort to consolidate our data centres, distributed computing and voice communications environments of every operating company and outsource the functions in an attempt to save money and free up valuable employees for other assignments. I'm expecting this endeavour to be our biggest yet but firmly believe that the experience we've gleaned in the past, particularly from the telecommunications alignment, will enable us to successfully tackle this challenge.

As you can see, the future here will never be boring. In between cross-country trips, during layovers at airports, colleagues and people I meet ask me what I'm working toward. I've spent quite a number of sleepless nights thinking this one through. Ironically, I'd say my ultimate goal is to become the Maytag repairman of Siemens, where our CIOs have created an environment for "self-alignment," and I have time to finally sit down and read my back issues of CIO magazine. When I find out that one of our CIOs in Argentina has called one of our CIOs in Atlanta without intervention and agreed to work on a project, then I'll know I have succeeded. When I hear the CIOs in a particular region have organised their own summit to tackle an important issue, then I'll feel it was worthwhile. Our CIOs understand they belong to a global organisation. But until they demonstrate this knowledge consistently, let the frequent-flier miles flow.

Dana Deasy is vice president and CIO for Siemens Corp. Matt Villano is a contributing writer based in New York City.

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