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.