Gas-baggers in the corporate world, a lot of hot air with no substance

Part 1 of this post appeared last week, click here to view

The world has many of them, few go by the title of “Consultant” and get around dropping big words in their trail that sound impressive; full of themselves and jargon, they love to hear their own voice at the smallest of opportunity. They also exude confidence that is unnerving and at times creates self-doubts in their audience. But consultants are not the focus of this narrative, it is the tribe that exists within an enterprise and has risen to the level of CXO or function head by virtue of their loud voices or that no one called their bluff.

He came with much fanfare talking about his illustrious past of having achieved greatness across companies globally in his field of operations as well as technology; the CFO’s arrival was the subject of much curiosity. Starting off with boastful achievements – none of which were verifiable – he attempted to dominate the IT team with smattering of gobbledygook that left the techies smarting in their effort to suppress their laughter. To the CIO and the team it was clear that they were going to have a tough time with their new Manager.

His knowledge knew no bounds; he had an opinion on everything from specialized solutions to highly specialized skills in manufacturing or for that matter on sales effectiveness. His position guaranteed that people listen to him especially if they were lower ranked; he showed off his superficiality using verbiage to subjugate those in front of him. Soon it was evident to everyone (management saw it as proactive behavior!) in the organization that he will poke his nose into every affair wanting to add value with anecdotes unbelievable most of the time.

I had filed a patent for a new way of marketing when working with this global FMCG company; did you know that we turned around the server farm in 24 hours; I had to sit with the technical staff and tell them how to write code; I crafted the new sales effectiveness process which turned the company around; why have you not considered a NAS solution, why are you wasting money on SAN; I could write this code in 3 days that you say will take 3 weeks; why does assembly line changeover take 14 hours, it should happen in 4 !

Surprisingly he never spoke about his own field of deemed expertise and left the Finance team busy asking for inane reports and correlations that had them wondering on the rationale behind the requests. Hiring incompetence around him, he ensured that the sycophants spread the word of his greatness around and showed open adulation in cross-functional meetings. Inaction by the IT team chastised for most of their actions by the Boss, started hurting key projects that defined the future state for the enterprise.

Eventually the (gas) bag had to burst and it did with indecisions and snafus pointing in his general direction; there was enough incriminating evidence that pinned him down to expose the lack of depth and expertise. While he was not unceremoniously booted out, until his last few weeks he continued to live up to his notorious ways spreading hot air, unable to reform or change. The exit created a positive vacuum that sent sighs of relief within the enterprise while the group of scared hypocrites worried about survival.

Collateral damage is a natural fallout of such incidents in an enterprise; the business had suffered production losses, broken supply chain, sales force missed the planned innovation and deployment of industry specific tools, the IT team saw attrition and delayed implementation of transformational projects, the CIO exited in disgust leaving behind a frustrated team, the Financial Controller parted ways and overall the growth slowed down with the string of bad decisions that the gas bagger had enforced with his coterie.

Enterprises have a lot of tolerance and resilience, they bounce back; the resultant dip however leaves them at a disadvantage with respect to what they could have otherwise achieved. Senior management when disconnected with ground realities or not accepting a bad hire, end up having to clean up the mess. Open communication, obligation to dissent, appears in almost every enterprise core values, rarely practiced in the true spirit, resulting in adverse impact, hurting people and performance in the long run.

Politicos next time !

Create the best policy but exclude me from it …

The compliance audit demonstrated significant gaps in the processes and policies which had put the new CIO in a quagmire on how to get started. The report was indeed incriminating to the internal and outsourced team; there were numerous cases of process being bypassed or ignored along with weak ambiguous policies and controls. The task appeared to be herculean and the team was smarting from the beating they had received from the CFO to whom the Audit team reported. The CIO had come on board a month back and was still undergoing his induction.

Every company that has an active audit function reviews compliance, risk and process strength linked to defined policies; the frequency of audit varies but at least once a year IT does figure in the calendar. They sift through logs, evidence of process adherence, change requests, documentation, defined standards, IT security, procurement discipline, and exceptions to all of these. For IT the exercise is fraught with danger when in the real world compliance is difficult with almost every senior manager requesting deviation to policy.

To get started the CIO decided to seek help from the audit team who had engaged one of the big audit firms. The audit team was surprised since none of the auditees had ever asked them for help; they dutifully connected the CIO to the Consultants. Citing conflict of interest, they recused themselves from the potential engagement. Not one to give up so easily, the CIO reached out to their competitors and engaged them in a full review of people, process, policy and technology towards creating a practical implementable set of policy.

Months and many iterations later the CIO was satisfied with the end result in which his team had contributed through the process. The classification of policies and associated procedures appeared comprehensive and pragmatic in their intent. The IT team was also content that finally they had markers that would leave little room for exceptions while the outsourced team who is responsible for execution will find it easier to comply. But before putting the plan to action, the CIO sought the opinion of the vocal CFO.

Weeks passed after the documents were emailed with no response; the CIO personally reminded the CFO of the pending request. Time was running short as the next audit was due in another few months and the CIO did not want another negative rating to fend. He also had dependencies on some of the other functions to work in tandem. Much nudging and cornering later the meeting was scheduled. The CIO had his team and the consultants on standby should there be a need to discuss some aspect in detail.

These policies are not user friendly ! The consultant has given you standard cookie cutter templates ! How do you expect senior management to comply with these ? We cannot be expected to change and remember complex passwords every so often. World over businesses are going digital; how can you have a draconian internet access or social media policy ? We need to allow people the freedom to engage with customers ! The world is going mobile; you should allow access to information on demand. You have to figure out a better way to implement security !

The CFO went on shredding the documents deriving satisfaction in his qualification and comment; the impracticality of the suggestions had the CIO wondering if ever the company will succeed in creating a framework that will protect the systems as well as allow for processes that are necessary towards good governance. His counter arguments were brushed aside by the CFO who was unwilling to listen in his quest to add value. The CIO thanked the CFO for his critique and decided to seek counsel from other CXOs towards implementation.

The rest who had lived with far more restrictive policies elsewhere commended the CIO for his rational real-world approach. Soon the next audit came and the results showed significant improvement in compliance which validated the approach taken. The CEO was full of accolades for the CIO while the CFO squirmed and then tried to take credit by highlighting his review prior to execution. The rest knew better and nodded to the CIO on the road taken and positive end outcomes. The CIO thanked everyone for their understanding.

A few weeks later when the CFO requested an exception to a policy which was denied as it required the approval of the CEO who was against deviations !

My CFO thinks he knows technology

After a weeklong discussion on the new business opportunity that clearly defined the process and the strategy, the CMO thanked the IT team and the CIO for their active participation. Then he said something that resulted in pin drop silence and uneasy calm: I think the solution should be ready within a week from now ? You know in college we used to write code and release programs in a few days. The CIO decided to clarify different reality for enterprise solutions that require a bit longer for time measured in weeks and months.

The CIO had invited the CFO to the IT meeting to interact with the team; every month he used to call some of the business leaders to give the team differing perspectives of how they contributed to the business and made a difference. In an endeavor to show off his technical prowess, the CFO asked about the storage environment: why don’t you use the NAS for the ERP ? SAN is expensive; you should know how to economize ! I have been involved in many technology projects and want to help you to choose most optimum solutions !

I had the privilege of working with many CEOs who were tech savvy and challenged me to find new ways to use existing investments as well as keep scanning for new technologies which could be disruptive in the future. The joy of working with such CEOs multiplied the not just my enthusiasm but also kept my teams motivated to put in their best to keep us ahead of the curve. This obviously created a culture of tech adoption that infected the rest of the CXOs to create an enterprise that enjoyed the benefits that IT can bring to the business.

Life gets interesting when some of the CXOs think they know technology better than IT professionals just because they worked in a tech company or studied a programming language in their school. Above are just 2 samples of such dialogues which keep the CIOs challenged and humored at the same time. They would make a great compendium to keep the IT fraternity smiling for a long time; the question that keeps raising its head is how to address such “know IT all” and “been there, done that” situations without creating a scene.

In conversations with many CIOs sharing experiences a few strategies emerged which had worked for most of them. To begin with the general consensus was to humor them by letting them speak out their heart and then keep doing what is in best interest of the project, team and the company. They need a platform to voice their knowledge which makes them feel better about themselves; most are happy doing just that in a harmless way without realizing that their wisdom is no longer relevant to the current technology realities.

The balance select minority of self-professed and declared IT experts who really believe that they know, unaware of when to stop are a challenge that needs handling with care. In positions of influence or power, they can be seriously disruptive to progress. This elite group wants to stay involved, sit through review meetings, add value to discussions with vendors, and get into minute details of deep technology that is best left to the techies. The group had no silver bullet though everyone had faced and managed such individuals in their careers.

Some CIOs had escalated such incidents where possible to the CEO or the Board to get them off their backs. Another avenue appeared to be to get an external third party or consultant on board to provide an expert view to counter the often antiquated, incorrect or incomplete knowledge. For the rest it was about the adverse impact on their deliverables which they were unable to control. So they struggled with shifting goalposts and changing timelines driven by the inane and absurd; they just had to grin and bear it.

One CIO had decided to take on such a CXO head-on and not accept the nonsense; he corrected the CXO in meetings and gave alternative and at times contrary views which almost every time put the CXO in an embarrassing and compromised situation. Unable to withstand the humility of the situation, the CXO confronted the CIO: Why do you keep countering everything I say as if I know nothing ? You make me feel like a chump ! What makes you so right all the time as if you know everything ? Stop doing this else …

The CIO moved on to newer pastures leaving the company to the mercy of half-baked buzzword laden CXO.

Cost of IT versus Value of IT

The CFO has traditionally controlled the purse strings ensuring fiscal prudence to keep the enterprise healthy with adequate financial safety net. As a part of the management team the discussion and debate ensured that investments stayed aligned to overall company direction. With adequate risk controls, only in rarest of rare cases the CFO could overrule other CXOs. Recent times have been full of analysis and news that the CIO is no longer in control of the IT budget, now the CFO purportedly controls IT investment decisions.

The CIO being the youngest CXO not always by age but the role has evolved only in the last decade or so and having typically grown from a technology background was perceived to lack business acumen and unable to take all aspects into account. The majority migrated and matured with ease working lockstep with other CXOs to the benefit of the enterprise. Post slowdown “new normal” changed organizational risk appetite and with finances being scarce the CFO rose to prominence. Now with growth back on track, why is it that the CIO continues to stay shadowed considering s/he demonstrated higher changeability and adaptation to the environment.

IT budgets have stayed stable over the years with mature enterprises focusing on bringing down IT operating expense leaving the capital investments open for discussion. Corporate and IT governance provided the necessary checks and balances on where to invest. So what gives rise to the new paradigm ? Does it indicate breakdown of the balance or has the CIO relinquished his/her responsibility now satisfied to stay in the back office ? Has the foundation and partnership set by IT crumbled with cost remaining the residual reality with the value being discarded on the wayside ?

IT does incur cost; everyone is aware and acknowledges that a significant portion (40-90% depending on the enterprise, IT maturity, CIO, Board of Directors, etc.) of the budget is allocated to “Business as Usual”. Where the IT organization and its leader is unable to clearly communicate the benefits or have a dialogue with other CXOs as an equal, irrespective of the good work done, IT gets labelled as a cost thereby nullifying the efforts.

IT also delivers value to the enterprise, customers, employees and the shareholders. Sustained differentiation and competitive advantage in the near term are typically IT enabled innovation. Multiple industry IT and CIO awards, and case studies validate success clearly illustrating value. New disruptions created by mobile consumers, social online engagement, analytics, and many more would find it difficult to survive without a good IT platform and sustained focus. Is the balance shifting ?

I believe that recent times have accentuated the value of IT and have created a wider role for the CIO that goes beyond technology lead interventions. Outsourcing the operational activities has also given the IT team an opportunity to focus on what matters. The task of managing the budgets and reporting has become even more important thus creating a stronger bond between the CIO and CFO. With increasing financial acumen, the CIO and CFO are on the same side of the table with the CIO deferring the financial decisions to the CFO. This is rebalancing the equation and not a shift.

My CFO is my best friend

The recent past has seen many discussions, debates, as well as advice from anyone and everyone who has an opinion and finally some pieces of alignment between the CIO and the CFO. All of them make interesting reading, depending on whether you are the CIO or the CFO. Last week, my CFO and I were approached by a media house to do a story on our relationship and the CFO called to ask  "Is this a story"?

Almost every CIO (and I will not debate the merits or lack of) passionately believes that he should be reporting to the CEO or the Board. This is a demonstration of IT’s strategic intent, as the CEO has direct overview of the direction taken by IT and the influence it has on the business. Reporting to the CFO is fraught with pitfalls, as the primary discussion is around cost. While I largely agree with this hypothesis, a lot of equations changed during the downturn, as the CFO grew in his span of influence.

IT was at the receiving end to some extent, with squeezed budgets, investments becoming difficult and overall sentiment prevailing around cost containment. Organizations with good governance processes as well as CIOs who were aligned to the enterprise realities adapted quickly, and worked with the CEO and CFO to create models that worked for everyone. Innovation slowed in some cases, but did not come to a halt. On the other hand, some CIOs had difficulty in adjusting to the new reality as the CFO dominated the decision making process.

Gigabytes of information were created around this new paradigm; CIOs hating it and CFOs wondering about what’s wrong with IT. The strain in an otherwise cordial coexistence or tolerance became a sore point for the CIO who could only vent his frustration at the inability to break the deadlock — unwilling to recognize that change begins from self. In the last 18-24 months, I had many interesting discussions with CIOs who struggled to get on with the IT agenda. Not that this was universal; many adapted to the new reality. In the new normal, the baseline has shifted and the new paradigm is a way of life. The CFO is an integral part of the decision making process, and signs off at least large value investments or costs.

Coming back to the interview between my CFO, myself and this senior correspondent, the discussion was around the relationship, alignment, issues and challenges. The bantering between us left the reporter surprised, until it was clarified that I am the CIO and my CFO is indeed the person who manages the money (amongst other things). The stereotype CFO too has changed as the CIO has evolved; thus to expect a Bean Counter in every CFO is like expecting every CIO to go fix the CEO’s laptop or the boardroom projector.

CIOs who have cultivated a relationship with other CXOs (including the CFO) would wonder if this hype is created by consultants wanting to sell models of alignment or governance. My quip would be that you should invest in relationships with all CXOs. If you do not help them win, why should they help you?

CIO Clubs

In the last few weeks I attended a 2 CIO meets, one vendor sponsored and the other setup by the top 10 CIOs of Pharmaceutical companies. The theme of discussions typically ended up with a debate on why some CIOs are successful in creating alignment with their business groups and CEO while many continue to struggle.

One of them with over 30 years of experience stated that his peers (other CXOs) avoided him most of the time and rarely granted him an audience to discuss IT projects. His frustration was obvious and was desperate to seek wisdom from others in the room.

Another luminary CIO raised the question of reporting relationships and his view was that if the CIO reports to Finance, not much progress can be made; however if the CIO reported to the CEO, the possibility of gaining mindshare and hopefully traction within the company is a possibility.

It all comes down to the qualities exhibited by the CIO and interactions with his boss (CEO or CFO) and peers. To gain acceptance within the enterprise, the basic requirement is that the CIO understand the business and create empathy within his team with the issues and align the work done by IT with the business goals. In the end it does not matter who the boss is (though it helps to report to the CEO), the CIO can make it to the executive table by demonstrating business acumen and highlighting the value created by the IT team.