Roundtable: Strategic Manoeuvres
- 18 June, 2008 08:22
- Tom Atkins (moderator), President, The Tramore Group;
- Brian Gill, CIO, The Canadian Depository for Securities;
- Kumud Kalia, CIO, Direct Energy;
- Jeff Kent, CTO, Cineplex Entertainment; J
- Jeff Williams, VP, IS, Staples Business Depot;
- Andrew Wood, CIO, Aon Reed Stenhouse
The role of CIO has evolved from the data processing manager into a true partner in the strategic planning process at the executive level. What is the current perception of the CIO by the rest of the executive team?
WOOD: I believe the executive team now views the CIO as having far more of a leadership change-agent type of role; one that is able to influence and drive new opportunities within the organization. We are actually engaged far earlier in the process than we once were. That is a tremendous advantage because not only can we help the business in achieving their goals and objectives, but we can also provide additional ideas and opportunities.
KALIA: The 'I' in CIO can change what it stands for depending on what time of day it is. You could be an Irritant; you could be an Innovator; or you could be the Information guy. You could be all sorts of different things. Over the last twenty years or so - certainly the last ten - business executives in general have realized how dependent their businesses are on IT and how fragile their businesses are because of that dependence. So I think they value having a technology executive around the table, if only to protect them from making some quite large mistakes.
KENT: I think they look upon the CIO as a very positive influence on the business and the strategy. They recognize how much reliance there is on technology, not only to run the current business but also as a component of every new initiative that comes along. I don't think we've had a business initiative in the last eighteen months at Cineplex that technology has not been a part of, and because IT is so important in helping make these initiatives happen, we're looked upon very positively. It's also very important for a CIO to understand the nitty-gritty of the business side of the organization.
How would you characterize your contribution to strategic planning in your enterprise?
WILLIAMS: My contribution to strategic planning at Staples is an out-of-the-box thinking kind of perspective. I am another voice at the table with all the other voices and everybody has an opportunity to contribute. But I think the unique value that I bring, outside of the pure technical knowledge and understanding, is just a bit of a different perspective on what might be possible.
GILL: As CIOs, we have a unique opportunity to wear different hats in the exercise of developing strategy and an action plan based on that strategy. Actually, it's stronger than an opportunity; it's a responsibility to wear those different hats and be a creative tension in the process. Because we're sometimes not as involved in the day-to-day business operations in different parts of the company, we can often see different possibilities that might exist. We can also be a conduit whereby best practices and broader perspectives are brought into the organization, because we tend to network well with our peers in different organizations, and with our primary technology vendors and partners.
WOOD: From a business perspective, I'm one of a number of voices that are heard; but the role that I personally try to fulfil is one of an innovator and a challenger. I aim to challenge the thinking and the status quo finding new opportunities to support strategic objectives and achieve business goals, including business growth or cost reduction, that the broader audience in the industry has potentially not considered. I see it as a prime responsibility of mine to bring forth new ideas and drive change within the organization while ensuring that the IT strategy and architecture is tightly integrated and capable of supporting both the tactical and strategic business objectives. My personal perception is from both a business and a technology perspective; my role is as an innovator and primary contributor.
How do you keep yourself current on the use of IM/IT inside and outside your industry?
KALIA: I scan quite widely for different inputs, so I'm always in receive mode. We sponsor research with MIT's Center for Information Systems Research (CISR). I'll go visit them three or four times a year, and all of my team frequently interact with them. There are also various CIO-type organizations that are useful. The CIO Executive Council is a pretty good one for reaching out to peers and finding out who's having the same kind of problems or issues. I also cruise quite a few blogs written either by my friends or by people whose views on business or technology I respect. There are some vendors I talk to; not many but there are a few strategic vendors we have partnerships with, so I learn from them what they're thinking of doing next. I also need to see what's up and coming outside of the mainstream, so I take a lot of opportunities to talk to entrepreneurs who have new ideas. I also try to take part in a lot of conversations through social networking tools outside of the company.
How do you keep current on what the competition is doing in your industry?
WILLIAMS: One of the good things about retail is you get to check out the competition. I try to visit competitive stores or competitive formats, and talk to the customers of our competition to see what their experiences are like and what they value or don't value. I can then compare this against what I hear from our own customers. As well as shopping the competition, I also make use of their services that we're competing against. I had a computer problem, for example, and rather than taking it to a Staples store, where I would get premium service, I took it to a competitor and I got to experience their service first-hand. This gives you a lot of insight into how you can make your own service better or where their service offering may be weak.
Experts have noted that the more daring of strategic plans require changes in the very soul of the culture of an enterprise. Have you encountered this scale of change and what were the key elements of managing through this metamorphosis of the enterprise?
KENT: At Cineplex, we ended up buying our largest competitor, Famous Players, which was quite a bit larger than we were at the time. We spent a long time making sure that we understood what the other side was going through, and we were very careful to avoid the "We did it this way, they did it that way" type of scenario. We also took an approach that recognized that we didn't do everything the best way - that there were a lot of positives coming from the other organization. We researched all of their processes, their technology, and their people, and our focus was to select the best from both sides. There were casualties on both sides as we went about creating the best team on a go-forward basis. We also decided to make the transition as quickly as we could, because we saw that companies where the transition took a long time to work out tended to be the ones that failed.
GILL: I've been through a change of this type with a previous company, and it was related to mergers and acquisitions. It's a big culture change for organizations to work through. The necessary elements for these changes to happen are centred around executive sponsorship and leadership. These types of changes need to be lead very clearly and firmly from the top of the organization. It's essential to have a well-articulated, broadly communicated and re-communicated message on the necessity for change. Large changes imply large risks. People get outside of their comfort zone and to make that leap of faith, you have to create discontent with the status quo, to develop a burning platform that people need to leap from. That articulated message of the need for change is very important. You require courage and commitment to drive through the adversity, because it's not a smooth process; things aren't going to go swimmingly. And when you encounter resistance and problems, you need to hold your vision and drive through them. Failing to do so turns your change into a flavour of the day exercise and those are disastrous.
WOOD: One of the questions I have is how many of the daring strategic plans have actually successfully been taken through to fruition? Having been there a number of times, sometimes successfully and other times not, I would agree with Brian on the need for executive ownership along with the commitment and determination to see through the adversity. Without the commitment to accept the adversity, and to let people go who are not aligned with the new approach, irrespective of their tenure with the organisation, failure is guaranteed. From my perspective, if the executive doesn't have the determination and doesn't clearly understand the risks in defining a daring strategic plan, then they shouldn't embark on it in the first place.
Dwight Eisenhower said, "In preparing for battle, I've always found that plans are useless but planning is indispensable". Do you believe this statement applies to strategic planning in business?
KALIA: I totally endorse that statement. Some years our plan is fine. Other years there'll be some tectonic shift in the marketplace so our plan is useless; it has to be scrapped and we have to start again. What the planning process has done is make us all understand what our boundaries are and what our limits are in terms of capital resources - just what we have available to us to execute on even if we change our minds. A good example is back in 2000, when Centrica, our parent, purchased Direct Energy in Canada. We had to change the company's strategic plan based on the fact that Enron collapsed and a lot of states pulled back from plans to deregulate the energy market. The northeast blackout and the rolling blackouts in California also changed people's views on energy. All of those things happened at pretty much the same time and we still delivered on our financial promise to shareholders, but we had to deliver that in a totally different way because the markets were no longer behaving as we had anticipated.
KENT: I agree that the planning process is incredibly important, especially if you get buy-in from everybody and have them understand everything. I also think that the plan itself is important. Where I think it falls down is when you try to align the plan to some sort of calendar that doesn't make sense. We all tend to plan for the year; I don't know why. Plans change, so we need to set the plan for a realistic timeframe. Parts of your business might run on six-month cycles so you should have a planning process to lead you through that six-month cycle. If something happens in the marketplace that shortens or lengthens that, you need to get back in there and adjust it properly. Other parts of your plan, such as erecting buildings, take a longer time to do and you need a longer term for the plan.
How do you cascade understanding of the enterprise strategic plan to your IM/IT management team so that the IM/IT planning process supports the enterprise strategic plan?
GILL: I've always found that alignment works best when it's based on more than just communication. There needs to be alignment through incentives and rewards, and through your operational tracking and scorecards. At CDS, we use all three of those techniques to try to make sure that the people in IT are properly aligned to the strategic initiatives. We have a set of divisional objectives that are aligned with our compensation system - our reward system. We also have individual objectives that each person is aligned to and rewarded upon. We have a balanced scorecard that we share throughout the organization that tracks our performance on our key strategic items and we engage in quarterly communications to all staff to help reinforce that message over and over. Hopefully, with those three things, we can keep things aligned. But even with them, alignment is always a challenging task.
How do you see the role of the CIO changing in your organization within the next three to five years?
WILLIAMS: I'm a fan of Don Tapscott's idea of the transparent organization. I think that's something that is going to happen and evolve in the future. Part of that is using social media and part is letting your customers and business partners, and possibly even competitors, collaborate with you on problems and ideas. Because that approach is so technology based, it will mean that the CIO function is going continue to be important or even increase in importance. Another less radical application is to take the idea of the transparent organization and apply it to the functional silos within the enterprise. If you're not ready to publish your corporate secrets out to the whole world, at least you can start to make sure the different functional areas understand each other and have access to each other's data and processes in order to be more efficient.
WOOD: I see the strategic role of the CIO expanding dramatically over the next three to five years. I believe that within our organization, my sphere of influence will grow. I see an increasing number of initiatives on the table, all of which have a technology component to them. More and more, we are looking for new channels to deliver product, or we are looking to remove cost or create capacity - all of those things have technology components. The expectation is that we can respond to these needs with increasing speed and reduced costs.
KALIA: I've viewed myself as the chief process officer in the company for the last couple of years. Looking at leveraging and designing streamlined business processes allows a lot of cost optimization through the company, and a lot of systems and data rationalization as well, so I think that's quite key. I can see a lot of overlap between IT and other operational functions - a blurring of that boundary between the systems guy and the process guy - because systems are really only processes automated, so those things go hand in hand. Some of the other things I've heard around the table - being a relationship manager, being a catalyst for innovation, and increasingly using the soft skills of persuasion and influence rather than a command and control approach - those are all things that I can connect with and say that they'll be a part of my role for the next three to five years.
KENT: I think the role will become more and more important but it is as a result of industry change as well. Our industry currently is going through pretty rapid change into a digital world with respect to the way a lot of the products are being delivered and in the way people get access to information and purchase their tickets to come to our venues. As a result, the business is becoming more complex and more technology is involved in every step of the business model. Therefore the IT role within the organization will continue to expand.
GILL: Having a really solid view of cross-organizational business processes and how they can not only be streamlined internally but also interconnected between organizations is going to be a shift that we'll all need to make as CIOs. The internal efficiency focus for sure will continue to be important, but the understanding of processes that you can leverage and connect to within other organizations - within your vendor supply chain or your customers' offices - is going to become, I think, the next level for us as architects of how business gets done.
What measurements do you use to ensure that IM/IT contributes to the success of the business?
KALIA: We could develop a cottage industry around measuring the effectiveness of IT. It's kind of a futile exercise and it's really academic. In our case the measurement is the achievement of the business goals that we set out to implement. I don't look for any unique targets. If we sign up to increase revenues by eight percent this year, or if we want to go into a new market or launch some new products, that's how we're measured; we either did it or we didn't. The IT staff share in those targets and in the rewards that come from achieving those targets, or share in the lack of rewards for missing them. I don't believe in any separate measures for our IT staff.
What are some of the new information technologies in your industry that will have an impact on your enterprise strategic plan?
WILLIAMS: At Staples in Canada we're continuing the drive to in-store self-service, which is really about improving the experience of the customer in the store, through either self-checkout or some kind of self-service kiosk. We're also using technology to optimize labour usage in the store. One technology that we're using right now we call Video Agent, which provides remote two-way video conference capabilities between a remote store person and a kiosk in the store. We're using that to provide a service for the customer where otherwise there would be nothing, simply because we can't offer staff.
KENT: We're exploring and beginning to use new technologies to upgrade the reserved seating and VIP experience of our business. Some of these types of locations are big in Europe and around the rest of the world but not in North America. Going along with these concepts are things like print-at-home ticketing, better Web ticketing, and wireless technologies within the theatre to self-serve customers so that they can proceed to their seats as soon as they enter the lobby. To a certain extent we're also using new technologies to manage workforce time and attendance. We recognize that the majority of our workers are young and very technically savvy and we need to put technology in place that they will embrace, and make sure that they use it do such things as check their schedules. Finally, our whole industry is changing from film to digital projection, and there's a lot of new technology ramping up around getting the digital print down to new locations.
How important is it to be seen by your peers as a business manager? If this is important, what do you do to ensure and enhance this perception?
KALIA: It's not negotiable anymore. I think you are a business manager or you're not a CIO. It's just expected.
WOOD: I'm with Kumud; it's not negotiable. It is fundamental that you are seen as a business leader first and foremost. Technology is a component by which we enable the business; but if you're seen as a technologist you'll end up being seen only as a supplier of service to the organization and as a commodity for that service. To help improve the perception of me as a business manager, I've gotten my insurance qualifications. A number of us within IT saw this as a fundamental step in helping with alignment and ensuring that we understood the challenges that the organization was facing. It has enabled us to be treated as equals and as partners to the organization which in turn has helped us significantly.
What advice would you give to your CIO colleagues around adding value to the enterprise and its strategic planning processes?
GILL: Building and establishing business credibility is essential. You won't add value to the process if you're not a valued contributor, and you need business credibility to do that. We also need to find more ways to say yes to new ideas and look at what we can do to help lead change more frequently.
WILLIAMS: Testing innovations internally but cheaply is extremely important. If you go off trying things and spending a lot of money, you're going to get stopped. But if you do things inexpensively with your industry or vendor partners, who are interested in seeing if something works, then that's a very successful thing to do. I also believe that letting people experience something is a hundred times better than just telling them. So arranging demonstrations of things that could have a use in your business is very important.
WOOD: We have to be leading innovation, leading change, and whilst I agree some of it needs to be well thought through and rational in terms of the way the business is transacted today, we also have to push the envelope. I believe it is our responsibility to do that and to see just where the edge is; where the boundary is and at which point you get rejected. We have to try to offer more ways of being able to provide solutions, and not be stuck in hard and fast more traditional processes.