CIO Performance Metrics

In the last few weeks there has been a lot of publicity and visibility on the fact that CIOs are being or going to be measured on business metrics, many of which they do not control or influence directly or indirectly. This sparked many a debates on various forums that attract CIOs, social media sites and groups that are dedicated to IT leaders. Not that anyone tried to contain it, the fever spread globally very quickly with reactions that spanned the spectrum of emotions.

Traditionally IT was measured on three aspects; operational efficiency, budgets, and delivery of projects. The connected world also added information security. Disaster recovery and business continuity surfaced and made it to the dashboard. Somewhere business benefit crept in and then projects were also reviewed from a business angle. Regulatory compliance required significant IT support and thus edged in. But revenue, profitability, customer acquisition or retention, product availability ?

How does the CIO influence any of these ? Can better IT deliver additional growth ? Will technology drive profitability ? What can the CIO do to acquire new customers or retain existing ones ? And what about product quality or availability ? If cash flow is an issue, how will systems ease it ? Competition has a better and cheaper product or a great marketing strategy, can IT or the CIO counter it in any way ? If the answer to one or more is no, then why link performance or compensation to these measurements ?

I know some of the CIOs who have been there done that, evolved beyond technology and/or taken additional business roles will say that the CIO can indeed contribute and influence most of the measures above. This is achieved with systems that create operational efficiency, business process management, information visibility, business intelligence and analytical models, and even enabling new models of engagement with the new trends and hyped technology troika, Big Data, Mobility, and Social Media. Cloud and Outsourcing are passé; everyone has done it or is doing it

It is evident that this piece of news has many people worried, and not all of them are CIOs; they are propagating the message that if I cannot control something, I should have the choice to determine if my performance is likely to be impacted. Fair point if the organization worked in perfect silos. In business and life uncertainty is certain and thus even the metrics that seem to be under control have dependencies – internal and external – which are beyond one’s power of influence.

Does the CEO control how the industry will behave ? Can the CFO control interest rates or liquidity crunch ? If the customer does not buy, what can the CMO do ? Rhetorical questions ? They are not helpless, but there is a limit to their ability to influence the outcome. They do play a role and they depend on the rest of the CXOs to work lock-step in achieving success. CPO (Chief People Officer) has to help hire and retain the best talent, CIO has to ensure information availability to key stakeholders for decision making and analysis. That’s what the C-suite is all about.

So if the CIO stakes claim to the table, it comes with a set of obligations and responsibilities; it comes with the territory; all CXOs are jointly and individually responsible for the success of the enterprise. It is not about “I have done my part and now you go figure”; I believe that CIOs should and does actively seek this responsibility and then works with others in shaping the future. The C-suite has to take this variability risk. Only then can the CIO aspire to take a position on the Board or become a CEO.

Hiring Consultants !

CIOs are a lucky bunch, whenever they have a problem of any kind, all types of help is available to them from various sources; IT vendors, system integrators, business school professors, peer CIOs, and finally management or IT consultants big, small, and even individuals, ex-CIOs i.e. retired or in-between jobs. All of them bring different kind of experiences and solutions to the table; some with a genuine interest to help find the best solution, others with a vested interest to sell goods or services.

Recently when I moved to a new industry and assignment, there was a flood of offers to help from the entire gamut of consultants. Can we help you understand your new industry ? Would you like us to do a diagnostic of the current situation ? What about some help with IT strategy ? Can we offer you some interesting research papers on the industry and its challenges ? How are you planning to prioritize the various business pulls and pressures ? Is there an IT governance issue you want to address ? ….

Their insistence, persistence and perseverance created a few moments of shaken confidence ! Did I really need their help to get started ? I asked them for data on similar engagements where they had contributed to the direction and shaped the future for the CIO. My mailbox almost ran out of space ! There were local and global case studies, customer references, engagement frameworks and best practices. I was surprised with some names of good CIOs friends, while others were predictable.

More than a decade ago as a newbie CIO I had gained some benefit from the consultants and IT advisory and research companies; they helped fast track my learning. But these references were amongst the best of CIOs. So I decided to call them to find out why they engaged these consultants; what prompted them to spend, and on what did they invest ? Did they get any insights that eluded them or create a better strategy or help them in their success ? Should I too get some of them on board ?

The answers should not have surprised me but they did; the consultant brought credibility to the plan, documents on current status benchmarked to local and global metrics. The big name consultants were seen as the best options even when they put your words and common sense into fat documents and fancy presentations. Somehow the stamp of authority and approval made the difference to company management with higher acceptance. The CIO had validation of his/her choices and rub-off credibility from such engagements.

Now I am not averse to using consultants or industry experts in areas that need a different level of thinking and problem solving.  To drive company-wide change across different stakeholders can always do with some help ! I have had my share of good and mediocre; authority is not bestowed by the brand or the years, it comes from a deeper understanding of the issues and positive query; whereas the ridiculous ones tested endurance levels not to be recalled again.

In my current context I felt that whatever the consultants wanted to solve is what the company had hired me to do; that was my core competency and what I excelled in. By the time they came to the table I had most of the answers that had been discussed and accepted as the reality and way forward. I tested my hypotheses with a couple of big names; they acknowledged that I was on the right track.

Did I need a validation of my decisions ? I don’t think so and neither did the rest of the business leaders who found the rationale and direction to be credible in its articulation. I believe that the use of consultants is finally a matter of personal choice influenced by the organization culture and the locus standi of the CIO. The past record of success internally or with consultants determines what works better. I think for now I will continue to stay away from them.

Right or Wrong ?

My friendly Board Member who has also been my mentor for some time now always brings up very interesting points in discussions. I have always enjoyed talking to him as he challenges conventional wisdom with his way outside the box ideas. Being technology savvy, discussions with him tend to be not just at a high level but at times I have to explain why one solution scores over the other. In one such meeting he brought into the open a dimension.

We were discussing a new Predictive Analytics solution and its adoption in the industry not just locally but globally. With no competitor locally using such a solution, with bright eyes he started drawing the end game that he wanted us to reach; the dimensions were simple in their representation but complex to execute requiring multiple data sources and algorithms that would challenge most. As the big picture unfolded, it had me and the team scared and excited about the leap forward for our company.

Using a formal matrix for evaluation of the solution is normal for IT; functionality, roadmap, customer success, ease of use, scalability, investment, and industry fit are some of the parameters. He helped us refine the list discarding most of them considering every solution scored a tick on them. It then came down to a few that focused on strategic intent and investments by the vendor. E.g. How many customers has the vendor invested in to enable them to succeed ?

Thus the discussion was at a different plane working on the methodology, plan and shared success criteria that had direct linkage to business outcomes. I could sense wariness in the business, IT and  vendor teams on the perceivably risky proposition. What if the solution does not work ? What if the industry changes shape or direction ? What if business users don’t use the end result for decision making ? How do we enforce the models that the solution recommends ? What if …

Success and failure rates of IT lead projects have been a statistics that scares every one; the reasons have not changed much over the years since I read about them first more than 15 years back. So there was some hope with a project endorsed by Board Member, but then the big question was if we can sustain his interest over the 18-24 month period in which the end outcome would be measured. We decided to raise these questions to moderate expectations and ended up inviting trouble.

Why are you all so risk averse ? How would innovation happen if everyone wanted a fool-proof solution that someone has used in the past ? Why are you always looking for precedence ? Early adopters always gain a competitive advantage even if it is short-lived; in most cases the followers get lesser benefits. If you keep working with a view that we don’t want to get anything wrong, is there a guarantee that you will not ? And not getting it wrong does not imply that you will get it right !

Doing nothing wrong would mean that status quo is the best place to be; trying something new is always fraught with risk. I am not implying that we take undue risks on new untested technology solutions. To get something right requires collective buy-in that CIOs seek for most projects; the marquee CIOs take a lot of calculated risks, and yes they do face failed projects more often than others. However they more than make up for them with their successes.

Inertia is not a good keyword for IT and CIOs; they should seek unexplored avenues to make a difference. I believe that we all strive for success and in the same vein we have a phobia for failure. The obsession to always succeed may result in a dull and boring existence that is disconnected from real life and business which has to compete every day in a new competitive environment with uncertainty. I tend to agree that doing nothing wrong does not mean that you are getting it right !

Good CIO, Bad CIO

The front page of a business newspaper carried an interview of some of the big 5 IT services company CEOs that had me engrossed as these industry captains shape the direction for the industry, influence decision making and are consulted by global CEOs on IT strategy and direction. Thus the interest was high to gain from the collective wisdom as they talked about their experiences with global CIOs, decision making process, budgets, successes and finally their perceptions of where CIOs could and should be.

There were some clear messages; the global economy will continue to remain under pressure for the next couple of years. Outsourcing deals will be smaller and of shorter duration as IT budgets will see a lot more rigor in the discussion. Talent shortage will squeeze growth for IT companies and Cloud computing will keep the hardware industry challenged. The CIO role will change again with technology evolution; the difference between the good and the challenged CIO will widen.

They outlined the differences on how CIOs across geographies and industries outsourced core and non-core activities to focus on what matters, i.e. you guessed it right, the business. But then they also mention in the same breath that CIOs that did not outsource remained challenged to align the IT objectives to business. Whether it is Remote Infrastructure Management, or Application maintenance and everything in between, the message was clear, outsource or perish, get relegated to reporting to the CFO.

Huh ? Now that is simplistically stretching a facet of the CIOs role to create a perception that outsourcing can be equated with strategic intent. If you don’t outsource, then you and your team is busy with things that do not matter to the business and thus you are likely to remain alienated. Was there a vested interest in the words from these CEOs who have been struggling to grow their business ? Some had taken over from ousted CEOs with a clear mandate to bring back the old days of high growth.

While I am a proponent of outsourcing and have partnered with IT service companies big and small to give away the technical or operational activities, in my experience there have also been cases of outsourcing not delivering to promise. CIOs connected with the pulse of the business draw the line on what needs to be given away and what should be retained. The company’s focus, perceptions of core, and finally the financial health determine what operating model should be adopted by the CIO.

The CEOs went on to talk about CIOs need to engage their stakeholders on what matters. People in a glasshouse do not throw stones at others. My plea to the same CEOs is to introspect a bit before preaching to their customers, the CIOs. The sales heads of the same companies want to engage with the CIO on nitty-gritties of technology that even the next level in the IT department rarely gets involved in (OMG I saw a data center). They do not practice what they preach. A few CIOs I met the next day agree !

So what separates the good from the challenged ? I do not for a moment believe that it is as simple as outsourcing operations or infrastructure or total outsourcing; a good CIO is a well-rounded leader who manages people and perceptions while ensuring that the delivery of promise is consistent with quality that is visible. S/he communicates effectively in all situations and is able to challenge business and IT partners/vendors in a discussion on the right solutions to business problems enabled by technology.

Is this the finite list ? No again, there is no checklist that determines the difference; you have to find your balance.