Finding common ground with your CEO
- 11 October, 2013 11:01
With technology now at the core of most business transactions, the relationship between CIO and CEO is assuming an increasing significance.
Five years ago, conversations in the CIO community revolved around whether the IT leadership role would ever get a seat at the strategy table; but for most top organisations, that debate is old hat.
Today’s top CIO is a business transformer who is constantly tuning the technology to align with business priorities, which often include goals they have helped to set. And the CIO is no longer the white-coated scientist wielding arcane technical mysteries. In today’s organisation, good CEO-CIO relationships are built on a solid foundation of openness and trust.
Last year’s IBM Global CEO study interviewed more than 1700 CEOs from 64 different countries and found 70 per cent regard technology as driving the most change in their organisation over the next three years. In fact, technology is considered to be a bigger change agent than external economic and market conditions.
The study also found a key influence on most CEOs is the desire to change to a working culture which celebrates openness, transparency and employee empowerment. As a result, leadership teaming with their other c-level executives is one of the most critical factors steering CEO practices today.
“CEOs have found themselves in a somewhat vulnerable situation. They are surrounded by technologies and ways of relating and working that new hires – and even their children – may understand better than they do,” the report notes, adding CEOs need to learn from their own networks. So who better to turn to than the CIO?
For CEO Robert Tickner, who heads the Australian Red Cross, it was critical to have the right person in the CIO seat as the organisation moved into its next phase of supporting and influencing 180 national societies across the globe.
“For me, our IT reform and innovation is the missing piece of the puzzle in our overall organisational transition,” he says.
Earlier this year, he recruited Peter Day, a former Sentric director servicing the Red Cross, who also previously worked as a senior Telstra executive.
“We both have a deep commitment to innovation,” Tickner says. “I have recruited some outstanding people for the organisation’s national leadership team, and Peter was one of these.”
In the last six years, the Australian Red Cross, with Tickner at its helm, has moved from eight separate state and territory organisations each with its own board and CEO, to a cohesive national organisation. The transformation involved moving nine separate financial, marketing, HR and other administrative systems into one, and it all went through successfully, he says.
Day credits his CEO with some wise decisions. “Robert is a collaborative CEO and is the first to say when he feels he doesn’t have a good handle on where the technology fits within the business,” he says. The Red Cross faces several unique challenges, chief among them reluctance across the board to take funds away from frontline roles, Day says.
“It’s very hard to say to people, ‘I need to take some money out of your program to spend on computers’,” he says. “That’s where Robert plays a critical mediator role.” Day runs a very lean team and says his focus is also on cost cutting.
“We’re supporting 3000 permanent staff and about 34,000 volunteers with only 55 IT people,” he says.
He’s switched the enterprise to Citrix cloud-based systems with thin-client desktops, reducing the turnover of computers. “Thin clients last a lot longer,” he explains.
Day agrees openness and employee empowerment have been key to relationship success. “There’s a lot of trust involved,” he says. “The CEO doesn’t want to know the full technical background, but you can give them a lot of information around IT spending and IT decisions so that they are well informed.”
Tickner and Day have also worked closely together in finding external support for the organisation’s technology goals.
“We don’t mind going cap-in-hand to ask industry to provide pro-bono around people and resources,” Day says.
“We keep scanning the horizon for potential partners we can work with,” Tickner adds, citing Microsoft as a good example.
“The partnerships have been really important – Microsoft gave us the equivalent of $10 million in software to support the organisation. Looking for potential partners is a journey that never ends because we have bigger goals than just Australia,” he says.
For Tickner and Day, the CEO-CIO partnership goes beyond the management of the local organisation – they want to take their skills to the world.
The main challenges I face are that those in business operations want to determine the end of product; there's a tendency for people in the business to go shopping for solutions
In November, the Australian Red Cross will host the biannual General Assembly of the International Federation of Red Cross and Red Crescent Societies, with representatives from 188 national societies coming to Sydney. Tickner says a major focus for the Australian Red Cross is supporting the organisational development of other national societies.
“Far more effective than a simple aid package is support to the core growth and development of the capacity of Red Cross and Red Crescent Societies in their own countries,” Tickner says.
“In Fiji, those best able to solve the problems of the country are Fijians. If they have a good financial system, good fundraising and a resilient IT system in place, they can operate far more effectively.
“Peter and I are taking this commitment to boost the society to the world, and IT is a fundamental part of this core capacity building.”
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Trust is the key
Trust is the word most often cited by GS1 Australia’s CEO, Maria Palazzolo, and CIO, Stephen Perreira, to describe their working relationship.
Formerly Global Standards One, the organisation is a core part of Australia’s supply chain infrastructure and co-ordinates barcode standards and national supply chain data synchronisation through a central product database used by more than 16,000 Australian businesses.
“The CIO is critical to my business – and for any business with any reliance on IT, it’s a critical role,” says Palazzolo.
She was the person who hired Perreira, a former Coles IT executive, over a decade ago and the two have worked together seamlessly since and clearly share strong mutual respect. “He is probably one of the most reliable people I’ve ever worked with in my entire life,” Palazzolo says.
Perreira is equally complimentary. “Maria has great vision,” he says. “Thanks to her trust and her willingness to have flexibility, we have been able to do things in the IT area that have very long-term positive consequences.”
Perreira has an interest in educating business and IT students about supply chain and has brought a number of IT and business interns into the organisation.
“I see our involvement in education and research at universities not only as a contribution to future leaders in the supply chain, but also delivering positive benefits to our organisation because we see into their field of learning and we can take back what is new in the curriculum.”
The key focus of the GS1 CIO-CEO relationship reflects the findings of IBM’s global CEO survey which reported that CEOs need to learn new technologies from their own networks and team with their c-level executives.
Palazzolo says she relies on her CIO to educate her and keep her up-to-date with technology, while Perreira says his CEO’s support allows him to encourage his colleagues in the business to come to him with business problems, not technology solutions.
“Steven has huge experience from industry engagement and his long career here at GS1, plus his 17 years in various other jobs, means he understands an enormous array of different technologies,” she says.
“I am the first to say I am not a technology buff, but IT is the core focus of our business, so I rely on him to make things that are really complex simple for me.”
Palazzolo points out business needs drive technology and her role is awareness of the business environment. “Understanding the issues that the industry is encountering, what their needs are, how we can come up with solutions – that leads to identifying the technology. I don’t know how any business can survive without the right technology for their business.”
Just as the CEO needs to keep on top of the business environment, Palazzolo relies on Perreira to keep a ‘watching brief’ on the technology scene. “It’s not a small task, looking at the full gamut of technology.”
Perreira says he’s able to achieve smart solutions, both for his own business and for those of his customers, because he knows his CEO has his back. “The main challenges I face are that those in business operations want to determine the end product; there’s a tendency for people in the business to go shopping for solutions,” he says.
Perreira is constantly reminding operational staff that they need to tell him what their business problem is and what they want to do to solve it, rather than what technology they want. With Palazzolo backing him up, that’s a message that’s getting through strongly.
Perreira advises CIOs who want to strengthen their relationship with their CEO to understand what motivates them. “It’s important to understand what drives your CEO; if you can catch the same passion and drive and enthusiasm, if you are in the same slipstream, then you can’t help developing a good working relationship with them.”
How to charm the entire executive team
It’s not just the top chief CIOs need to worry about. The communications gap can also be wide between the CIO and the board, making it difficult for IT to gain an appropriate voice at the executive table.
At the recent CIO Summit in Sydney, executive mentor, Christina Gillies, delivered advice on how CIOs can better connect with the board and provide directors with a useful and non-confusing picture of IT and its contribution to business strategy.
To understand the board, CIOs should think like the board, Gillies said. Board directors do not have an IT background and largely base their IT knowledge on what they read in the media. Also, they hear the most about the IT department when there is an outage, she said.
Often, directors go into “react mode”, demanding papers about what’s being done about the latest outage and seeking detailed tracking of new projects, she said.
Be the educator
A CIO can provide comfort to the board by giving them a clearer picture of what’s happening in IT and by showing opportunities for technology to contribute to the business, Gillies said. The CIO should teach the board what technology is being used, how well it supports the business now, and how well it will support the business in the future. The CIO should also keep the board updated on technology trends and the opportunities they may bring to the business long-term, she said.
Develop fundamental communication tools
The CIO should show the board conceptual pictures of the present and future IT architectures, and a roadmap to the future linking technology initiatives to business outcomes, Gillies said. IT should be tied to asset replacement schedules, order of magnitude costs and return on investment.
Reporting is critical to keep the board updated on how current systems are running and what progress has been made toward the roadmap. It’s also useful to provide a one-page risk profile for IT, she said.
Get on the agenda
“Once you’ve got the fundamentals in place ... do a test run on the CEO and the business executives,” Gillies said. Once executives respond positively, “suggest to the CEO that it would be useful to get on the board’s agenda annually”, she said. Writing a bimonthly IT performance report for the board is a further aid to engagement.
“Simple pictures tell the story, not architectural masterpieces,” said Gillies. When illustrating IT systems or writing a roadmap, CIOs should remember that other executives do not have the same level of technical know-how. This advice also applies when talking to board members in person, she said.