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September 2009
baldoni.jpgIf you have been a loyal reader of CIO magazine, you probably have come across Baldoni on Leadership. For several years, John Baldoni, an internationally recognized leadership consultant and author of six books, dispensed his management advice to CIOs. His CIO magazine columns include The CIO of Chief Communicator, Give Recognition Where Recognition Is Due, What to Do When You Are the New Boss, and Does Your Organization Provide the Space for Innovation?

In Baldoni’s new book, Lead By Example: 50 Ways Great Leaders Inspire Results, he describes the traits and abilities leaders need to know inspire others to follow. He says that a great leader does what is right for the team by supporting, developing, and defending them, in good times and in bad times. In addition to writing books, Baldoni also coaches C-level executives, including CIOs, as well as middle managers. In 2007, LeadershipGurus.net recognized him as one of the “30 Most Influential Leadership Gurus.” His articles or his comments have appeared in publications, including USA Today, Chicago Tribune, and Investor’s Business Daily.

Enterpriseleadership.org recently sat down with Baldoni to discuss how CIOs can improve their visibility and credibility in their organization.  Here is what he had to say:

EL. How does the leadership role of the CIO differ from other C-level positions?

JB. CIOs come at from a little different angle than other CXOs. CIOs have a specialized area of expertise, namely, technology. They oversee the IT function. For decades, CIOs have been known as the tech guys. In some companies, the CIO position plays a strategic role within the business.  Some CIOs, however, have an inferiority complex, such as ‘I really don’t belong here’ and that’s nonsense. Because IT is intimately ingrained and integral to any business function, CIOs know more about what’s going on in the corporation than most other executives at their level.

EL. If you were to develop a CIO succession plan, what key things would it have in it?

JB.  The person has to be technically competent and really understand the world of IT. That is a given. I would also look for someone with exceptional people skills. This person needs to have the ability to lead others, the ability to bring folks together for common purposes, and the courage to do what is necessary for the good of the organization. I would also look for someone who has the ability to communicate effectively. Many CIOs today face the challenge of how to bring more simplicity to IT. If you keep adding to your systems what people desire, then your systems will become complex and cumbersome to operate. A good strong CIO can stand up and face the challenge of pushing for simplicity. This person has the ability to persuade others to his or her point of view, especially people he or she has no authority over. This person also needs to have a strong vision of where the business wants to grow and how IT can enable that growth. And finally, this person must have good execution skills or the ability to carry out things to completion, according to business guidelines.

EL. You recently were the keynote speaker at a Society for Information Management conference in Dallas. What did you learn from that venue?

JB. IT people hunger for good strong management and leadership information. They like to explore new ideas. They want to be perceived as a leader in the organization. They are willing students. Because many IT people have engineering backgrounds, they, by nature, like to solve problems, gather information, and make informed choices.

EL. CIOs often get criticized by not speaking the language of the business. How do they improve their skills in this area?

JB. If IT professionals are hungry for this stuff, then I would recommend they enroll at a recognized executive education program. Another alternative is to take a graduate level management course or a finance course. Better still, they should take a course in anything they perceive they don’t know.

EL. CIOs often perceive their IT organization as being a partner with the business. What does it take to be a true business partner?  What are some of the key lessons CIOs need to learn in order to master this partnership?

JB. They really need to know everything about the business. IT folks are integral to what the organization does. So CIOs need to study up on the organization and its industry. They should network throughout the organization. Because CIOs are in a position to help the organization solve problems, they should not wait for people to come to them for advice and counsel. You might say, ‘I know you are wresting with this. Here is a solution for you. Here is how we can help you.’ That is how you raise your profile within the organization. In doing so, you learn how the business works.

I know this might not be the comfort zone of some CIOs. If CIOs want to be perceived as a true strategic partner, they need to get outside of their own skin and accept they are in the business of leadership. If you don’t want to do that, perhaps executive leadership might not be for you. The bottom line is this: If you want to manage others and to lead effectively, you have to extend yourself to others in an authentic way. That doesn’t mean you have to become a different person. You need to communicate, network, be proactive, and to seek out. You must be active, not passive.

EL. Not all CIOs report to the CIO or are part of the executive management team. What can an aspiring CIO do to secure a seat at the table?

JB.  If a CIO can demonstrate strategic value to the corporation, then he or she should be considered someone who can sit at the C-level table. You might have to start thinking holistically, which comes naturally to IT professionals. IT people can look at the entire system and then think tactically about how to solve the problem of a network. The person at the top of the organization thinks about how all of this stuff fits together. C-level executives need to have this kind of mindset. Look for ways you can introduce that kind of thinking to others.  It will not happen overnight.

EL. Any comments on the CEO leadership skills of Carly Fiorina, former CEO of Hewlett-Packard, or Rick Wagoner, former CEO of General Motors?

JB. Wagoner was with General Motors for many years. His is a very sad story. He was a very good manager and a good self-less leader. He liked to share the spotlight with other competent senior level executives. We don’t see that trait in many CEOs. The tragedy of General Motors and Wagoner’s demise focused on the organization’s failure to address some tough questions. These questions had been building up for more than 15 years. They include the following: Do we need to go to market with seven or more brands? How can we get a better hold on our labor costs? How can we reduce our fixed costs? How do we downside over time? How do we make a model mix that is more appealing to consumers? These questions demand tough answers.

GM has had a non-confrontational culture. You just don’t approach executives and ask them about the serious issues facing them or the company. Wagoner was a classic example of that. People I know who have worked for him say that he is a very wonderful, congenial person. You might call him a good guy. I was sorry to see him take the fall. Again, it’s too bad that he and his management team didn’t face those tough questions a long time ago.

Carly Fiorina was a brilliant strategist and a very capable executive. Her failure to build a network of support within the organization caused her downfall. Former employees said she put herself first ahead of the corporation and others. Many managers resented that. As an outsider, she should have done more to say, ‘I am a team player like you.’ Her team did not perceive her to be a team player. When the time came, she was hung out to dry.

EL. Which CEOs do you admire the most?

JB. I like Anne Mulcahy of Xerox who is retiring. She has turned the reins over to her number two person, Ursula Burns, a long-time operations executive. Mulcahy came through the ranks from human resources at Xerox. She cares about people. She understands the Xerox culture. She has made an effort to learn new things. For example, she tutored herself about finance so she could understand how the financial operations worked, and thus make more informed decisions about finance.  She also connected very well to the organization, and could people get to buy into her vision of Xerox. She helped saved the company. In fact, she did this within the existing resources of what Xerox is like.

I also admire Al Mulally, CEO of Ford. He took over a very serious turnaround effort. While Ford is not totally out of the woods, he made a key strategic decision to ride out the storm by opening lines of credit, especially while it is inexpensive He has received much criticism for this move. He has championed the idea of one Ford by pulling together for a common vision. He has done a good job of breaking down the silos.  It is very difficult for an outsider to come into a high bound culture and affect positive change. He has been able to do that.  He is a very enthusiastic person. People sense he has much energy. People trust him and want to believe in him. He has been a good person for Ford at that time.

EL. Are their other CEOs you would cite as examples of good leaders?

JB.  When we talk about iconic leaders, we need to remember that many organizations are led by fine men and women in the trenches. These people do a terrific job of leading with scare resources, especially an inadequate number of staff members. These folks have many challenges especially during these tough times. We don’t know their names. In fact, we might never know their names. Remember, people in the middle hold together many organizations. They affect change and positive outcomes. Leadership is alive and well within the middle ranks of corporate entities.

EL.  You have come across many CIOs who want to become CEOs?

JB. I don’t see many CIOs moving up. If they prove themselves as a capable executive, why shouldn’t they be considered for a CEO spot?  On the other hand, if they love what do in the IT world, they should stay put.  Management culture truly doesn’t recognize this yet. We unwillingly push people into levels of incompetency for reasons of prestige and compensation. We turn good engineers into managers. If they are comfortable working in the lab or in IT or in research, don’t put them in a management job where they would have to give up what they love to do. Why should you give up your technical competency to do a job for which many organizations don’t adequately prepare you for? That is a hard decision to make.

EL. Can you describe some of the coaching you have done with CIOs?

JB.  When it comes to CIOs, I do much work on leadership presence which is how to connect effectively with individuals, and how to demonstrate your earned authority. I work on how one can be a more effective leader by bringing together folks with a common purpose. It is all about leading with influence or without authority. Much of what gets done in a corporation occurs down through people of influence. If you approach a person on stature with your idea, you cannot expect them immediately to accept it, embrace it, and preach and teach it. For example, a CIO needs to sell leaders of operating units on simplifying their systems, and thus making them more efficient.  They might say their systems are fine. The CIO must use a fair amount of diplomatic persuasion to convince these leaders that the system changes are better for everyone and will not disrupt current operations.

EL. What are you doing to prepare executives for social media?

JB.   I am teaching them that transparency is alive whether you like it or not. If you are a leader in your organization or your function, you need to know what is going on via a variety of social networks. Social media may be an extension of the grapevine. You do not want to monitor it out of the sense of spying on people. On the other hand, we want to get a feel for what people are thinking. People will comply with an initiative from on high. Listen to your people. What is the feedback? Is there a better way to do something?  You do not want to create the Dilbert-like work force comprised of totally incompetent managers and incompetent employees.

EL. With so much emphasis placed on e-type communications, what is the best way for executives to communicate during these tough times?

JB. The e-world, through things such as social media, has fueled the move to flat organizations. However, in times of crisis we want a strong leader. It’s ebb and flow time. Leaders have the challenge of staying in tune with their people. They do this by listening either through Webcasts, or better still, face-to-face video conferencing or face-to-face town hall meetings.

Elizabeth M. Ferrarini - She is a free-lance writer and IT consultant from Boston, Massachusetts. Reach her at elizabethferrarini@yahoo.com.
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Why do some CIOs struggle to keep the lights on and butt heads with management every time there is another cut to the IT budget? In contrast, why do some CIOs receive all types of accolades, awards, and publicity for their IT leadership accomplishments? The latter CIOs have an easier time achieving business impact of IT than their struggling CIO counterparts for several reasons: These CIOs know how the business works and have been empowered to use IT to make things happen. What’s more, these CIOs work for CEOs who know that IT done well can make a difference in the company’s growth and profitability. These executives work together to find the right IT model for the business, make a range of IT investments to fuel current growth and to explore new ideas, and make sure the company can function in a digital global economy.  In other words, these executives are IT savvy. 

Executives who want to become IT savvy should pick up a copy a 150-page book written by Peter Weill, chairman of MIT Sloan School’s Center for Information Systems Research (CISR), and Jeanne Ross, director and principal research scientist at CISR.  In fact, the 160-page book is appropriately titled IT Savvy – What Top Executives Must Know to Go from Pain to Gain. Written in easy-to-read language, the book draws from research down by CISR, including vignettes about companies that have done a good job of transforming their IT organizations. The book’s appendix has a survey that allows you to rate how IT savvy you are.

Enterpriseleadership.org recently sat down with Jeanne Ross to dig deeper into the advice both authors provide in the book. Here is what she had to say:

EL. In the case of Aetna and BT, you talk about what the CEO did to bring about an IT transformation. What was the CIO’s role in this?

JR. We see successful cases where a CIO can take the lead and help the CEO see what it is possible. That’s not the point of this book. If you are a CXO, don’t wait for that to happen. You need to grab control and think of how you want IT to take your business forward. Meg McCarthy, Aetna’s CIO, will tell you that that Ron Williams, the CEO, was in charge. ‘He knew what he wanted, his vision was very clear, and my job was to deliver.’ She had to be extraordinarily good at that. On the other hand, she frames her role this way. It is a very different kind of leadership role. She didn’t have to convince anyone of the importance of IT to the company, as many CIO do. She just had to make sure that IT was first rate, and very professional. She also had to do the things so many CIOs assume they should do, but have trouble doing them. Why? Many CIOs lack the authority or have not been given the go ahead to take the business leadership role. Williams gives McCarthy all of the credit in the world for delivering.

EL. Okay, so what role did the CIO play in the IT transformation at BT?

JR. The BT CEO knew that IT needed to be more important than what it had been.  He brought in a CIO who could help him derive more value from IT. BT is a similar case to Southwest Airlines, which is also in the book. At Southwest, however, the CFO, who later became the CEO, spearheaded the IT transformation. These leaders realized that IT has to be really important. They also want to use IT in a way that yields the most value. They find the best CIO. Together they work hand in hand to make things happen in this company. In both cases, we saw a very tight partnership between an IT leader who helped provide much of the vision the CEO knew he wanted. The CXO was waiting for a CIO to help him see it more clearly.

EL. Is an IT transformation part of an overall corporate transformation?


JR.  Companies that base the transformation on moving more toward a global digital world will often recognize that IT has a critical element in making that happen.

EL. When selecting an IT operating model, what role does the business architecture and other architectures, such as enterprise, play in the process?

JR.  In an ideal world, you pick the operating model and then you define all of your architectures. Realistically you need to know where you are starting from. If you have had a siloed architecture, then you will get into trouble if you adopt, say, a unified operating model, where you standardize everything and integrate everything. If you grew up with siloes, you will have a long journey to unification. You would be better off taking intermediate steps that would take you to either replication or coordination.

Companies that haven’t had any discipline around technology, and that haven’t been thinking about architecture cannot just select an operating model. It just is an overwhelming change, and it is hard to do. As a result, companies in this situation might have their options limited. On the other hand, if you have always been good at architecture, you can select anyone you want and probably be able to pull it off.

EL. You say that IT savvy firms have a 20 percent higher margin than their competitors. Can you discuss your research process to arrive at this figure?

JR.  Because this is Peter Weill’s research, I need to piece this together. I should have asked him this question. Of the 600 firms in his sample, he took the top 25 percent of performers. He then went to those that were publicly held and pulled out the financial data. On the average, these companies had profit margins above 20 percent.

The methodology we used to pick these IT savvy companies would lead us to a very similar profile. My research focuses more on enterprise architecture, while Peter looks at how companies spend their IT dollars. We find a huge overlap in the companies with mature enterprise architectures and those companies that spend their IT dollars wisely.  Although Peter and I ask very different questions, we come to very similar conclusions on which companies are really deriving value from IT.

EL.  Many CIOs say that measure the success of their IT based on ROI. Is this a reliable metric? If not, what do you recommend they use?

JR.  ROI is not a bad metric. However, if that is all you are using, you will be headed down the road to more siloes. You have to be careful using an ROI. If you are going to make different kinds of investments for different reasons, you should be explicit about that. You do not want to have an ROI metric for everything you do because that it not why you are making all of your investments.  You are making some investments for ROI, and you might be making some investments to experiment on new ideas. ROI doesn’t work for experimentation or exploratory investments. You will eliminate all experiments real early if you use ROI.

In chapter 3, we say that your portfolio of financial investments has different goals so should your portfolio of IT investments. You should be very explicit about that and then match metrics to whatever you are looking for. So, most companies need to have an experiments budget for IT. Peter Weill calls them the strategic investments. As I mentioned, an ROI will absolutely destroy that effort. You need to look for a metric that helps you to evaluate what comes out of the ideas you have.  If you go back and look at the portfolio of things you did two years ago, you might look at what things had potential and what you should continue to invest in. If nothing had potential, you might say that you have the wrong approach, you are investing the wrong amount, or you are inveseting in the wrong projects. There is no single answer to that question.

We think that post implementation reviews are essential. So you put together a business case, and you ask yourself honestly what are we trying to get out of this? After it is done, you ask yourself if you did. That is how you are going to learn going forward. It is not so much what metric you use. It is about how you use those metrics. You need to follow up on them to check to see if they were realistic and you got what you expected.

EL. The federal government uses the earned value management metric for IT across all departments. Is this metric good for the private sector to use or is it just tailored to the government?

JR. I am not sure how they are doing that. I don’t think I can answer that. Our research does not extend much to the federal government IT. We have done a fair amount of presenting to government people and occasionally advising them. Our sponsors are all for-profit companies. That’s why we have had little interaction with the government.

EL. What are some of the methods IT savvy organizations use to communicate business value to their constituents?

JR. We noticed that Yury Zaytsev, CIO of Swiss Reinsurance Company, a global financial services company, always talks about IT situations in business terms. We said to him: ‘You are always talking about what the business is trying to do. It doesn’t matter if you are talking to IT people or business people, you instinctively talk about business. How do you do this and how do you train your people?’ He replied that he just does it. I get his point.

If you look at the cases in the book, such as Campbell Soup, Southwest Airlines, and Seven 11 Japan, executives at these companies do not realize they are doing something different from people who do not communicate well. They just say this is the way I talk. This is what we do in our business.

Some CIOs instinctively talk in terms of real business value, while other CIOs do not get it, but they think they have it. For example, these latter CIOs might talk about network downtime. No one cares about downtime. They might say, ‘Well, we talk about it in business terms.’ You do not talk to your business partners about downtime. You need to stop having interruptions or downtime by getting the basic operational stuff to work right. You should not have to explain what is going on with the technology, why it breaks, and why it is expensive. You have to get passed that.

You need to focus the attention of IT on how the business runs and makes money, and where does technology have an impact. If you start your own thinking process from the other end, then you will not be so concerned about how to communicate in value of IT or what metrics you use to measure IT value. You, instead, can concentrate on understanding the company’s biggest concerns and what IT can do about them. In IT savvy companies, CIOs think differently than their counterparts. IT savvy CIOs look at what is happening while everyone is in the valley tries to figure out what they are doing. These CIOs recognize that they have this unique perspective and can articulate and believe what is possible in the organization.

EL. Do you ask CIOs how they communicate with their rank and file?

JR. It is a very interesting question. George Westerman is working on that right now, and he will come back from this study with some ideas.

EL. In IT savvy organizations, what is the CIO’s role on the board of directors?  Do these boards have an IT committee or does the CIO sit on the audit committee?

JR. I will have to admit that we have not looked at that at all, especially in this book. We try to define the role the CEO and other CXOs ought to be taking. Are they savvy enough to recognize where IT fits in all of their operations and thus what they would have to report up to the board? You pose some interesting questions. I am surprised we have never studied that issue at all. On the other hand, if we go out and get a feel for the landscape, we will probably find many CIOs who have limited contact with the board of directors. We would have to search for those CIOs who engage regularly with their board.

EL. Have you looked at the types of portfolio management tools that companies use for IT?

JR. No. we have not gone into that at all. We have looked at the strategic view of how organizations think of their IT portfolio as opposed to what tools they use to manage it.

EL. About 60 percent of UPS’ one billion IT budget goes for running the business, and the rest goes for new investments. Do most CIOs have a good handle on a metric like this one?

JR. CIOs should pay much attention to that type of metric. Many of them don’t know the answer to that question. It is valuable to monitor that and to try to push money out of the operation and into the development side.


Elizabeth M. Ferrarini - She is a free-lance writer and IT consultant from Boston, Massachusetts. Reach her at elizabethferrarini@yahoo.com.

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