Every CIO gets many calls from startup IT companies wanting to bounce their million dollar idea—to seek the CIO’s advice and understand whether it makes sense in the enterprise. Some of these are self-funded, while a few may have angel investors or private equity already in place for growth. The steady growth of such small startups in the recent past has created an interesting problem for the CIO. Why is it a problem?
In quite a few cases, there is not much to differentiate one startup from the other. So how does the CIO separate the chalk from cheese? What is the due diligence required before getting these vendors on board?
A majority of these startups are seeded in institutes like IIT and IIM (globally pertinent equivalents may be the Silicon Valley or MIT kind of institutes), where the idea takes shape fuelled by the entrepreneurial bug. Most such ideas take a while before they gain traction with their target audience. These are the real gems, and being an early adopter of such startups provides an immense advantage.
Having worked with a few such companies, I realize that it does take a lot of effort to get the product/service aligned to enterprise processes and direction. As the first or amongst the first few customers, the value proposition is almost always attractive. Their reference checks largely depend on their mentors (professors or others) who are able to provide the details behind their continued support to the new entity.
The second category of startups comprises breakaway groups from existing companies, where a group of people have decided that their ideas have higher value than what they currently see within a large entity. This group typically specializes in services for a specific technology, domain or application. Such companies do well to begin with as they are patronized by existing customers (supported by them) who see a price advantage with a smaller startup. Such entities pass the tipping point within 12-18 months by either reaching a steady state, or falling apart. The due diligence is thus largely dependent on the team’s leader and its past track record as they continue to offer similar services.
A variant of the second category is a group being lured by an investor who believes that unlocking the potential has good upside for everyone. The service offering is thus no different from the above. A private equity institutional player invests in existing entities that needs funds to scale up or laterally, but in this case the carving out was initiated by the investor. How does one ensure that the entity will survive and make it to the tipping point? The team comes with impeccable credentials; the unknown factor is the investor who may pull the plug. In such a case, it is critical to conduct diligence on the investor and his past track record. Search engines come to your rescue in such cases, as past footprints cannot be obliterated.
Either way, put in safeguards to protect your enterprise’s interests with financial, legal or even escrow accounts to address sudden disruption. Work with your legal team for once, ask all the questions even if they make the other queasy; at least you will be able to sleep with ease.
I met the CEO of a global market leading hardware and services vendor recently – he’s from an organization which has been engaged with us for many years. He was earnestly seeking customer feedback on how is his company contributes to the success of customers and what is required to sustain or improve the mutual value. My submission to him was that all is well and hunky dory; we think of their company when we needed something. Once the transaction is over, the Account Manager as well as my team part ways until the next requirement comes up.
As a purely transactional arrangement, this works well, but many other value added opportunities get missed as this vendor is not our first recall. The CEO was aghast and promised to remedy the situation quickly through a strategic meeting with solution heads and domain experts; this was to be repeated every quarter, or on demand.
Six months passed, and nothing happened. Another chance meeting, and this time the CEO turned crimson on hearing the progress. In the interim, some more business went to their competitors. The chastised managers began the chase attempting to fix this meeting, which materialized after another three weeks. Time requested and granted — 1½ hours, scheduled start 2:30 PM.
D-day arrived, and this is how events unfolded:
2:30 PM came and went with no sign of the delegation; No call, no SMS, nothing. The audience comprising of the CIO and a few General Managers waited with some concern and amusement.
3:00 PM: Account Manager turns up. After 10 minutes, the second person ambles along. Meeting starts at 3:15 with a presentation on how the vendor sees the current market. They shared their beliefs about our challenges, and thus the opportunities for engagement. He talked about services that we have tried unsuccessfully with the vendor as the key unique selling points.
3:30 PM: The Sales head joins the meeting while the discussion was on an organizational matrix—a model that would support us in the collective quest to take engagement to the next level. As we started tabling issues, the vendor team had reasons for all that had nothing to do with them. An ERP upgrade, change in account managers, shift of support personnel, I am sure you get the point. But there were only fleeting regrets that they did not update us on open issues or orders despite multiple reminders.
3:45 PM: “What are your priorities and projects for the next 12 months?” and we quipped “To explore new and alternative vendors”. My colleague whispers that this meeting is worth a mention on Oh I See. Saving grace for them came in the form of an urgent phone interruption.
4:00 PM: The reception announces arrival of the last person who was to join the meeting. I get up and walk out of the meeting.
I wonder whether the vendor realizes what they (did not) achieve with the strategic meeting scheduled by their CEO with intent to enhance business with our company. Why does the IT vendor fraternity not teach its sales force to listen, engage, empathize and show some patience – the four tenets of retaining your customers? All of them (except a handful) are interested in talking, or presenting the great slides provided by their local or global HQ with inane survey data that normally has no connect in the local dynamics of business. Like every other business, retaining customers is all about creating a differentiated experience, unless you always compete on price.
Last week, I was invited to speak to a gathering of IT Managers (CIO aspirants). The subject was of course “How to become a CIO”. With some confusion on the start time of my presentation, the audience had almost 30 minutes of waiting time, but in their desire to pick up some tips and tricks, they patiently waited for the session to begin. As I entered the room, the expectation written on the audience’s faces brought butterflies in my stomach.
The agenda included: timeframe to make the grade, domain versus technology expertise, degrees and qualifications, soft skills, management challenges and opportunities, managing teams, all the qualities that matter and what to watch out for. I decided not to use the standard slide presentations with bullets, process diagrams et al, or the usual stuff that most presentations are made up of. The idea was to engage the audience, and engage they did. With 40 minutes allotted, the hour passed quickly without realizing it–the questions took away another half.
Today’s aspiring IT Managers are well aware of the challenges faced by the CIO; they shadow their bosses. They learn by observation and try to understand the intricacies and finer nuances. The only thing that they lack is a playground to test themselves and a coach to hone their skills. It was refreshing to see the young talent raring to go, waiting for an opportunity to knock. Many are abreast with financial skills and also aware of how to justify hard numbers in the enterprise quest for ROI. Finally, the importance of networking and challenging status quo makes the well rounded personality that creates success.
Succession planning for the CIO creates a platform for the next level to demonstrate their acumen. Learning is real on the battleground; no amount of theory can substitute real experience. Mature CIOs are today working towards nurturing their teams to challenge them; this was evident in the post event networking where some CIOs of the IT Managers joined in. It was heartening to see the connect between these leaders and the potential leaders of tomorrow. As the current lot of CIOs plan their retirement by 2020, the next generation has to be ready to take on the mantle by 2015.
My takeaway from the session was that the skills that worked for current CIOs are required even for the next generation. Apart from this, the new CIO will also have to keep his antenna tuned to new developments like the cloud and mobility, the latter being driven largely by consumerization of mobile devices.
The Q&A revealed existence of comfort zones in what the IT Managers do — be it technology or business process enablement. Now the challenge is to give us their comfort zones if they want to move to the next level. After all, “You must want to fly so much, that you are willing to give up being a caterpillar”.
My Sunday morning breakfast with a CIO proved to be quite an interesting discussion. He was wondering whether it is time to change now, since he will be completing almost five years in the current company. “Renewal is necessary to keep the learning going”, pronounced the person sitting across the table, as he mulled over his toast. It’s not that he was underperforming, or that the company had suddenly decided to defocus on IT spending. The diversified enterprise enjoyed healthy above market growth. It was recognized as a strong company on the leading curve of technology adoption. Curious, I dug more.
The CIO’s reminiscence of his journey proved to be very enriching and rewarding. Industry recognition and internal appreciation from across business units helped with continued investments and new initiatives. So there was no adverse impact in overall sentiment during 2008-2009’s difficult times. I could not uncover any recent or past incidents that may have even triggered the thoughts of movement to pastures unknown.
Global surveys generally indicate the CIO tenure to be between three to five years depending on industry, geography, and personality. There are some who move like clockwork every three to four years. Compulsions vary for most of them, while words imply, “no new challenges to address … or no new opportunities”. Analysis indicates the existence of a well defined pattern across these movements.
Now, I am not outlining the type who has spent over a decade in a company and done very well. They are a small breed, who are either cherished by their companies or work in public sector enterprises or equivalents (yes, there are many enterprises where the culture, urgency and behaviors are akin to a public sector enterprise). Nor am I including the IT Managers with CIO titles—people who are called upon (and indeed enjoy fixing) the board room’s faulty projector.
Many CIOs are recognized as successful leaders who specialize in implementation of ERP solutions. Once these missions are executed, their interest in sustenance or alternative solutions diminishes quickly. These are the ERP specialists who get into enterprises with struggling legacy systems. They are masters in the implementation of a specific ERP that brings some efficiency, who then move on. They are extremely useful to set a foundation of technology; average longevity is in the range of three years.
Another type of CIO flirts from company to company. He is able to communicate effectively hide his ineffectiveness with a choice of phrases and jargon. Thus he impresses upon the CEO why he is their man Friday. With strong political skills, such a CIO uses the three envelope process quite effectively to last anywhere from two to four years in the organization (depending on how political the company is). With little to demonstrate as delivery, their networking and communication skills save the day with amazing consistency.
The last category consists of CIOs who are aggressive, consistent, demanding, and articulate. They get in, transform, create the next line of leadership, and move on to the next challenge—typically achieving this within a three to five year timeframe. It dawned upon me that the person across the table was such a leader who had completed the wave of innovation. In the pause that came after addressing all the discussed challenges and opportunities, he had a crisis of “What next?” These leaders grow from strength to strength, are not tied to any industry or technology, and are truly business leaders who understand how to effectively leverage the tool.
As the discussion progressed, it was evident that the question was rhetorical. It’s just a matter of time before the CIO finds another large enterprise to host his quest for innovation.
Recently, a respected publication’s edit piece on CIOs highlighted the enterprise’s changing expectations from a CIO. This insight was gleaned from “CIO wanted” advertisements as well as discussions with headhunters or executive search companies. Some of these headlines were on the lines of “CIO with ABC ERP implementation experience”, “Full lifecycle ERP experience is a must”, “Should have worked in discrete manufacturing”, and “Strategic CIO with operational experience reporting to CFO…”. The last one especially is a paradox!
After an oscillating experience between East Asian and Indian leaders on their perceptions of the CIO this month, changing expectations from the enterprise brings up an important question, “Is the CIO role changing subtly by taking a direction divergent from where current and future CIOs want to be?” Yet another passionate discussion revolved around enterprises hiring CIOs from outside the IT functions. This trend may be positive or negative based on your frame of reference.
Enterprises have faced challenges in the execution of large cross-functional (or high-end technology) projects. Many of these adversely impacted operations or delivered limited value commensurate to the effort. Some were possibly due to oversell by the IT organization which led to inflated expectations from these investments. However, a large number of these projects have observed no correlation to technology (as has been consistently reported by the Standish Group in their tracking of IT project success over a decade). Instead of technology, management involvement has remained the primary influencing factor in these projects. Even if it seems irrelevant at this point, the final buck for effective technology adoption stops with the CIO. Thus, this has given rise to the hypotheses that “forget the strategic part of IT, let’s get someone who can fix the operational pieces first”.
Outsourcing of the support services, changes in educational structure, and consumerization of IT has demystified the technology black box. The new workforce has grown up with technology. As a result, they are unafraid of exploring new frontiers that current set of leaders and managers in their 40s and 50s may not always be keen upon. With the continuous thrust on Business IT alignment (BITA) and many commentaries on “IT is too important for the enterprise to leave it to techies”, the new business leader is emerging from non-IT domains. More importantly, he is reasonably equipped to get started on the journey towards becoming a CIO.
The current generation of technology professionals (either CIOs or those moving towards the role) must pay heed to this new trend. As is evident, the minimal expectation is to ensure operational efficiency from all projects and meeting of baseline business expectations. Industry knowledge now supersedes technology expertise for the leader, but well rounded experience matters at the next level.
After all, if the enterprise continues to remain challenged on effective usage of technology for any reason, even if not attributable to the CIO, the role will be downgraded to the position of an operational IT manager reporting into the CFO.
Last week in my post OMG …, I wrote about a CIO perception that was probably the lowest that I have observed in so many years. That was the perception of those who labeled the CIO a CDO. It rankled for a while, as I tried to put that experience behind me. As a result, I was wary while getting into a discussion with a veteran leader and yet another politician a week later.
I came away pleasantly surprised from the experience.
At the annual event of a large software vendor (held with no sales pitch, presentation or brochures in your face), the invited dignitary presented a keynote that focused on the positive direction most economic indicators appears to project. The audience enjoyed this rollercoaster ride based on the vast experience (that promised more than it delivered); but then, an hour can only give so much. As he regaled everyone with anecdotes connecting the past to the future, the CIOs lapped up everything that came their way. And then began his narrative on IT.
Having led industries and media houses, the speaker talked about how his earlier companies used IT and increase in the pace of advances in technology as he grew older. Meetings with EDP and IT Heads merged with the evolution of the CIO–making it sound like the natural evolution that universally applied to this species called the Chief Information Officer. Then he turned to appeal to the audience–to give up this role and start imagining what the future can hold for them.
Almost like Isaac Asimov’s science fiction and Arthur C Clarke’s space odysseys, the CIO moved along this path made of dreams.
Déjà vu? Inception?
Dream within a dream, I pinched myself and so did a few others–wanting to wake up as if this was a dream, but hoping that it would never end. The words echoed and kept ringing much after I departed from the venue.
“Imagine what the world can be, what you can make it into, let your imagination soar as the spirit does. You all have the talent and the knowledge; make the world a better place with judicious use of technology like no other can. The world will know you as Chief Imagination Officers”.
The warmth in the room rendered the air conditioning ineffective, but no one was sweating. CIOs rewarded the speaker with applause and the questions that followed had nothing to do with technology and kept the speaker thinking while acknowledging that the CIOs have a lot more than technology on their minds.
Gratified with this experience, I walked away comparing the contrast in experience from elsewhere in Asia to India, and that reinforced the generally accepted view that the Indian industry adoption of IT and the general management maturity contributes to higher success rates and growth for the CIO. I like the way it sounds–“Chief Imagination Officer”.
After I finished writing this piece, I read an edit in a respected IT magazine’s recent issue which wondered why the industry seeks IT specialists while labeling them a CIO? But that is another story.
The other day, I found myself aghast by the onstage passions of learned men—those who had absolutely no kind words for the CIO. I tried to get up from my seat in the audience with a wish to raise my voice against what was going on (CIO bashing), but something invisible pulled me back. The 400+ audience comprised largely business folks (with probably a handful of CIOs), and that was their reality. I felt sad, as I internally seethed with no avenue to vent my feelings. I wanted to tell the poor audience that the CIO does not stand for Chief Invisible Officer—or clarify that they are not CDOs (Chief Disinformation Officers). So I began to analyze their reality, hoping to catch some of them later during the event. But, let me start from the beginning.
The event was a leadership summit attended by a cross section of global CEOs, Board Members, CXOs from various functions, and a few invited CIOs who were categorized as business leaders—not just a technology CIO. The setting was a panel discussion between few thought leaders, a senior Asian government bureaucrat, and a couple of CEOs; the topic, the economy, growth challenges and opportunities. Everyone was enjoying the insights and the rich knowledge being shared, as the subject veered towards business analytics, IT and the CIO.
It was evident that for most speakers that the CIO was an inept technical being—rarely visible except when something stops working like the Boardroom projector or WIFI. Beings for whom the phrase Business IT alignment (BITA) is foreign, while IT feeds the hapless business with inaccurate information. They evidently experienced the CIO’s challenged ability to come up to a level of basic understanding of business drivers. The CIO contributing to business discussions was alien to them. Thundered a bureaucrat, “I have only seen Chief Disinformation Officers, not Chief Information Officers …” Others almost broke off into a spontaneous applause.
Though a CEO did appear a bit uncomfortable, he did not consider it prudent to disagree. The thought leader commented on the CIO’s ability to stay invisible most of the time, and thus christened him “Chief Invisible Officer”.
As I walked out of the auditorium thinking about this discussion’s various aspects, I reflected on my experiences within my multiple CIO roles, interactions with peer CIOs, vendor speak, and discussions with CXOs across enterprises big and small. My reality appeared a lot different from what I had heard from the Magi, who have seen more of the world than I have, but from a different frame of reference.
Are CIOs living in illusions of grandeur in their castles far removed from reality or the experiences, especially of the government speaker as an exception? With some relief, I recollected many Indian enterprise CEOs talking positively about the contributions made by their CIOs and IT organizations. Of certain CIOs who have also took additional charge of business, as well as a few CIOs who have also led cross-functional enterprise projects that made a difference in difficult times.
I guess reality is multi-faceted and not bipolar. Everyone reflects their reality and experience; the world is full of diversity that cannot be captured into a stereotype. Many CIOs I know would react similarly upon hearing about the above discussion, while a few CEOs (hopefully none) may actually be able to associate with the panel’s experiences. As enterprises invest significantly in IT enabling the enterprise, they also recognize the importance of a CIO leader who can walk lockstep with other CXOs while working towards achieving excellence using technology driven efficiencies and innovation.
I believe that a consistent movement is required towards spreading the good work done by many CIOs in conjunction with their CEOs. The learning from these can be applied towards improving the kith and kin. It is also important to talk about and discuss the challenges faced so that everyone does not have to rediscover them as a part of evolution—not just in CIO events, but also in industry and other CXO events. After all, the wheel needs to be discovered only once, and then it’s about replicating success.
The last few weeks have seen many news and analysis items on the enterprise mobile market leader—a player that made ‘email on the go’ a way of life—in addition to creating sore thumbs and marital discord for many corporate executives. After all these years, now there are concerns around national security, not just corporate data compromise.
A few countries have taken a tough stance banning the service or seeking the key to monitor all traffic. The European Union decided to totally shift away to a popular consumer phone for their state offices with 20K+ users. The phone’s largest users as well as the associated services are worried about whether they will be required to shift away within a short span to another option. They are scared about imagining life without the familiar buzz every few minutes (of another email) and business applications.
Today we cannot think of work life without access to email, corporate applications, sales data and many more on the mobile. These devices have made 24X7 slaves out of their owners. Expectations of instant response to a message (irrespective of the hour) are becoming the norm. This increased productivity is now factored into the workload. Apart from enabling the sales force with planning, reporting and sales data, mobile devices have provided even the typical desk bound executive an ability to stay connected at home. Thus enterprises have seen improvements that were not possible earlier. Suddenly, all this appears to be under threat.
Should the CIO be worried about this looming uncertainty? While a total shutdown is not imminent, restriction in services is a reality. This may extend in the future and cripple the basic functioning of these devices.
To me, the answer is a resounding yes. Country laws and regulations are paramount for every entity operating within the geographical boundaries. There is no circumventing these; so if applications depend on a type of service, they may have to be rewritten or discarded. Alternatives should be explored and options made available, should a switch be required to reduce the adverse impact. This should be discussed with the management and the level of impact (if any), be communicated clearly and explicitly.
With an ever increasing number of mobile devices deployed by the corporate or just connected to the enterprise (employee owned), it’s important to periodically assess and review mobility solutions and options. Work with the service providers to create an insurance policy. No one wants to die, but insurance always makes sense.
Recently, I met a CIO who was berating the fact that whenever (which is infrequent in any case) a meeting was scheduled to discuss the strategic IT agenda, the gathering ended up discussing operational issues in almost every case. This was leading to a buildup of frustration, and the CIO was wondering if the business had no interest in pursuing the strategic alignment of IT for their enterprise. As I listened to these woes, I realized that the CIO had a remote possibility of getting there. This was not because the company did not understand or appreciate the value of IT’s contribution, but since the malaise had its roots in the way IT was engaging with the rest of the company.
Every CIO aspires (and rightly so) to create a significant impact to the company with the help of tools and IT enabled processes that give them tactical advantage many a times. IT organizations which are able to create several such initiatives sustain the benefits that IT provides, and creates IT advocates from within the business. However, this is possible only if everything else is working hunky dory, or at least has a jointly agreed review process that allows the organization to conduct a dialogue that focuses on the issues and challenges they face.
Periodic review meetings with different functions (like finance, marketing, sales and production)—singularly or jointly—provides a framework to list, review, mediate as well as track issues that are irritants to daily chores and operations within the enterprise. Over a period of time, as the IT organization resolves issues and engages in an open dialogue, these meetings become a regular way of exploring new opportunities that allow for mutual win-win situations. The assumption is that these issues are resolved to the satisfaction of “users” within the agreed to timelines. Where the formal review meetings are not the norm, any meeting that discusses IT in any shape or form becomes the ground to rage war with the CIO.
My CIO friend suffered from this lapse. He considered it inappropriate to engage the business in operational meetings, as he wanted to discuss only the strategic agenda. His team worked diligently to address operational issues when they were brought to their notice (normally when it was a crisis). As a result, the IT team was always fighting fires, without opportunities for an across the table discussion. This lack of a structured review mechanism ensured that the CIO rarely had an opportunity to table the strategic agenda which he was passionate about.
CIOs should balance the need for operational reviews, along with discussions that look at the long term impact created by innovation and new technology. Failure to engage the business across both planes will result in the strategic agenda being hijacked and loss of credibility to deliver business as usual. Such situations just end up further distancing the Business IT Alignment (See BITA).
Last week, I was part of a two day gathering (attended by a little less than 100 CIOs) at a great beach resort in the wonderful locales of Goa. It had stopped raining after 20 days of incessant rain, said the lady at the Reception while welcoming us. The next few days were expected to be cloudy, with some sunshine bringing smiles—the CIOs were looking forward to rewind, relax, and network while exploring some serious thoughts on IT during the day. Weather stayed faithful to the prediction—apart from the occasional showers, the sun played hide and seek with the clouds. I could recognize cirrus, nimbostratus and cumulus.
As the conference progressed, it was evident that every IT services and product company (irrespective of what they had to offer), created some connect with cloud computing. We had power management, data center hosting services, servers, virtualization, software, telecom services and some of the global top five IT companies—all talking about cloud computing as the essence of IT. This herd behavior had resonance with hype seen in the late ‘90s around the Web and Internet. Words from the past echoed, “Any company who does not have a Web strategy will be dead in the next decade”. We all know that most of the companies which had only a Web strategy fell off the cliff into the chasm of oblivion. Predictions and promises of the cloudy set mirror the irrational exuberance that was pervasive in the dotcom era.
Do you know what cloud computing is? A rhetorical question; the speaker did not wait for the answer and began his 30 slide presentation starting with what is virtualization. The next speaker added to the misery with green data center and energy efficiency, while acknowledging that IT contributes to only 2% of the carbon emissions. If everyone did their bit, carbon emissions would come down by 0.4%. And, if all of us moved our entire infrastructure to the cloud, maybe that figure will go up to 0.7%. Save the world, move to the clouds. Over the next day, almost everything (from basic definitions to use case models and in between) was pushed down on the hapless audience, which braved the frontal attack while wistfully looking at the sunny sky outside.
Out of courtesy to the speakers and organizers, CIOs continued to field the inane presentations as well as panel discussions on clouds, clouds, clouds, and some more clouds. A resurgent CIO challenged the vendor’s wisdom (on stage) about treating the audience like kindergarten kids. They were challenged on solutions for the enterprise’s current ailments or help for the CIO’s real life problems; not just talk about irrelevant solutions. CIOs broke into spontaneous applause which would bring a politician pride, but evinced no answers from the speaker—again, like the politician. Sections of the audience wandered away after every break, leaving behind a thinning crowd for subsequent speakers. The sun too teasingly invited captives to come out, as the waves’ murmur tortured the spirit. The CIOs saw merit in discussing cloud formation in the skies—no connection with the conference room’s discussion.
With the ecosystem yet to evolve and create meaningful cloud transition strategies for enterprise users, the IT vendors will do a favor by not increasing the hype and aligning to reality. Privately, most vendors acknowledge the fact that clouds are as yet mature, since the concept is surrounded by a lot of questions that require hard answers like security, geographical data residency, privacy, licensing, and many more. Their organizational compulsions prevent them from being honest in a public forum—lest it be seen as them not toeing the party line. Thus, vendors and consultants will do well to listen to their customers before charging ahead on their favorite subject for now, cloud computing.
As the conference was coming to an end, a tweet escaped the room, “Cloud in the sky, cloud in the room, my mind is cloudy too after listening to so many speakers on cloud computing”. Personally, I enjoyed counting the clouds outside than the utterances inside.