In the Age of Agility, Chief

Transcription

1 I the Age of Agility, Chief Iformatio Officers are Agets of Chage ad Busiess Trasformatio Key Takeaways Tomorrow s CIOs will fid themselves copig with ew duties, greater resposibilities ad higher expectatios. May CEOs ow view their CIOs as the orgaizatio s primary chage aget with their pricipal evaluatio criterio beig his or her ability to drive chage a ultimate sig of success. With competitive orgaizatios expectig their CIOs to serve as strategists as well as eablers, CIOs will assume leadership roles i product iovatio ad the opeig of ew markets. They will be perceived less ofte as maagers of techology ad more ofte as agets of chage ad busiess trasformatio. At progressive compaies, the CIO is oe of the few seior executives with a geuiely holistic view of the eterprise, particularly those havig udergoe trasformatio i busiess processes ad the uderlyig techology. By Kare Rubestruk ad Mark Polasky Welcome to the Age of Agility, i which ew busiess models evolve every six moths ad success higes o swift reactios to shiftig currets i the marketplace. I a eviromet marked by cotiual trasformatio, competitive orgaizatios icreasigly rely o the Chief Iformatio Officer (CIO) to serve as a prime architect of fudametal chage. The emergece of the CIO as a strategic player is ot surprisig. At progressive compaies, the CIO is oe of the few seior executives with a geuiely holistic view of the eterprise, particularly those orgaizatios that have udergoe trasformatio i busiess processes ad the uderlyig techology. As a result, today s CIOs are icreasigly assumig leadership roles i compay operatios ad ow i the creatio of ew products ad services ad the discovery of ew markets. CIOs are ofte uiquely placed withi their orgaizatio to both uderstad the real-world trasformatio challeges as well as idetify eterprise breakthrough opportuities, writes Garter Group Aalyst Graham Waller. The CIOs iterviewed for this executive report agree strogly with Waller s assessmet. The flow of iformatio services ito every ook ad cray of the moder corporatio sigificatly expads the resposibilities of the CIO. The omipresece of IT also requires the CIO to master a broad ew set of cross-fuctioal skills ad capabilities. Buildig cosesus across the eterprise I a very real sese, the CIO has become a idispesable executive. I may istaces, the CIO is the oly seior executive whose regular job ivolves cotact with every compoet of the orgaizatio. While it is quite ormal for busiess uit executives to view the world from a vertical The uiversal ature of IT forces perspective, the uiversal ature of IT forces the CIO to reach horizotally the CIO to reach horizotally across multiple silos ad to cosider the impact of decisios o the across multiple silos ad eterprise i its etirety. to cosider the impact of decisios o the eterprise i its etirety. New Opportuities for Leadership Arise as Orgaizatios Respod to Evolvig Markets ad Global Pressures Oly the most agile orgaizatios ca remai competitive i this kid of eviromet. IT ca build cosesus because we uderstad the roles of each busiess uit, says David Kig, Seior Vice Presidet ad CIO of Regal Etertaimet Group i Koxville, Teessee. We have developed the skills to commuicate horizotally across may busiess uits withi the orgaizatio. 1

2 IT is ow at the heart of the operatio ad my role as CIO has become vastly more strategic. Util recetly, our idustry did ot fully appreciate what IT could do. David Kig SVP ad CIO Regal Etertaimet Group Those skills are put to the test every day at Regal. As the atio s largest oweroperator of movie theaters, Regal competes i a market udergoig acute chage. I its migratio from film to digital media, the motio picture idustry is reivetig a busiess model based o techologies developed largely at the begiig of the 20th cetury. Such a radical trasformatio poses a uedig series of challeges ad opportuities for Kig ad his team. IT is ow at the heart of the operatio ad my role as CIO has become vastly more strategic, says Kig. Util recetly, our idustry did ot fully appreciate what IT could do. The trasformatio of the motio picture idustry truly qualifies as a extreme makeover. For decades, feature movies were loaded ito large metal cas ad had-delivered to theaters by couriers. Whe the movie fiished its ru at oe theater, a courier would pick up the cas ad brig them to aother theater. I the very ear future, feature movies will be distributed, stored ad projected utilizig ew techology. That s a mostrous trasformatio that will save the idustry billios of dollars i distributio costs, otes Kig. Digital ciema takes IT out of the back office ad puts it right i frot of the audiece, says Kig. I may ways, Kig is emblematic of the ew corporate CIO. He feels the weight of additioal resposibility but he also feels empowered by the potetial for makig a differece. I believe that IT leaders should use their advatages to drive chage that is meaigful ad lastig deep ito the orgaizatio, he says. I m talkig about chage that becomes part of the corporate fabric, ot just the flavor of the day. A portfolio of critical skills Sice IT is cetral to every corporate process improvemet iitiative, CIOs have already developed may of the critical leadership ad executive skills ecessary to serve as agets of chage ad busiess trasformatio. Project maagemet, prioritizatio ad sequecig are commo skills i IT, says Kig. As we automate processes across the compay, we become very familiar with the challeges ad resposibilities of all the busiess uits. We fudametally uderstad how they relate to each other. 2 The cotiuig importace of outsourcig as a lever of busiess trasformatio also plays to the CIO s stregths. I the past, outsourcig programs were hadled more like tactics tha strategies. For example, the CFO would hadle outsourced Fiace operatios, the VP of HR would hadle outsourced HR fuctios, ad the CMO would hadle outsourced call ceter operatios. Today, the CIO is much more likely to be directly ivolved wheever a busiess uit eeds to outsource a fuctio or process.

3 The CIO s cross-fuctioal view of the eterprise creates uique advatages whe egotiatig ad maagig outsourcig iitiatives, says Jeffrey Neville, CIO at Easter Moutai Sports (EMS) i Peterborough, New Hampshire. May CIOs already have years of experiece with IT outsourcig, so it makes sese to apply their skills ad kowledge across the orgaizatio. EMS is oe of the atio s leadig outdoor specialty retailers, with more tha 75 stores ad a growig olie presece. I additio to maitaiig a rapidly expadig IT ifrastructure, Neville ad his team serve as full-time chage agets. I really wear three hats, says Neville. I m the CIO of our traditioal brick ad mortar busiess. I also have P&L resposibilities for our alterative chaels, which iclude our web site, our call ceter ad a busiess-to-busiess operatio. Ad I m also resposible for drivig busiess trasformatio throughout the compay. This broader set of resposibilities clearly differetiates Neville from earlier geeratios of CIOs who served primarily as maagers of techology. Today s CIO must possess the ability to empathize with the problems facig other executives. Buildig bridges across the orgaizatio, fidig the right parters to drive chage ad ecouragig collaboratio are critical tasks for the moder CIO. It s ever too early to beig the process of geeratig buy-i for busiess chage projects. Prior to startig a project we get agreemet from all of the stakeholders i the busiess, says Neville. Collaboratio is essetial to busiess chage Oe of the CIO s major challeges is fidig the most appropriate iteral parters for drivig busiess chage across the orgaizatio. Before lauchig eterprise-wide projects at EMS, Neville seeks advice ad support from the head of Huma Resources. I really wear three hats. I m the CIO of our traditioal brick ad mortar busiess. I also have P&L resposibilities for our alterative chaels, which iclude our web site, our call ceter ad a busiess-tobusiess operatio. Ad I m also resposible for drivig busiess trasformatio throughout the compay. Jeff Neville CIO Easter Moutai Sports (EMS) We talk about the capabilities of the people ivolved i the project, explais Neville. These talet ad techology coversatios ca be extremely valuable because HR is more likely to see how a busiess chage project will affect other parts of the orgaizatio. HR helps me aticipate how various departmets withi the orgaizatio will respod to chages i the IT architecture. Two members of Neville s staff have bee officially desigated as process chage agets. Oe had iteratioal experiece as a sourcig maager, the other was experieced i retail operatios. Together they help Neville pursue the compay s goal of achievig growth through cotiuous busiess trasformatio. The results have bee gratifyig. I m very proud of the fact that we grew our olie busiess by almost 60 percet last year, says Neville. If I were 3

4 a traditioal CIO, I would t be able to say that. I could say that I eabled somethig, but I could t really say that I d accomplished somethig. Believe me, that s a big differece. We are growig so rapidly that we re a differet compay every six moths. IT ca t ad wo t hold us back. Therefore, we must be strategic. If we do t have the systems ad talet to aticipate where we are headig, we could seriously put our compay i a bid. Jody Giles CIO Uder Armour, Ic Like the other CIOs iterviewed for this report, Neville agrees that his job has become more strategic. That does t give him licese to igore the basics of IT, however. It s a balacig act, really. You ll always eed to sped a certai amout of time just keepig the lights o. Is the up ad ruig? Is the etwork dow? Are the stores coected? But you also eed to keep lookig two years dow the road. Cuttig across compay lies Joseph (Jody) D. Giles, CIO of Uder Armour, Ic., i Baltimore, Marylad, says his techology backgroud boosts his credibility whe he participates i strategy developmet. The CIO kows what s possible from a techology perspective ad ca explai it withi a busiess cotext without soudig arrogat, says Giles. That s a advatage you brig to the table durig strategy plaig coversatios. As CIO, Giles ca pose questios ad raise issues that cut across traditioal corporate boudaries. Beig the CIO allows you to ask questios without people assumig there s a hidde ageda. It s like, Hey, I m just the CIO here, maybe I do t uderstad all of the busiess issues surroudig this Uder Armour is a leadig developer, marketer ad distributor of braded performace apparel, footwear ad accessories. Although much of his daily resposibilities ivolve supply chai ad operatios support, Giles ad his team also take part i strategic plaig for the firm s lie of products. How cool is that? At sales meetigs ad cofereces, I meet ad shake hads with the buyers. Whe customers or talet (coaches, athletes) come through the buildig, I m part of the meet ad greet. I also ca t walk past a retail store sellig our product without talkig to the store maager! Giles takes special pride i his role as driver of busiess trasformatio. We are growig so rapidly that we re a differet compay every six moths, he explais. IT ca t ad wo t hold us back. Therefore, we must be strategic. If we do t have the systems ad talet to aticipate where we are headig, we could seriously put our compay i a bid. At Chico s FAS, rapid growth ad a large etwork of retail outlets forces Gary Kig to view all IT decisios from a strategic perspective. As EVP ad CIO, Kig is resposible for esurig that the compay s systems ca hadle the demads of a highly complex, multi-brad operatio. The compay operates 925 wome s specialty stores, icludig stores i 47 states, the District of Columbia, the U.S. Virgi Islads ad Puerto Rico. 4

5 The Kor/Ferry Istitute I additio to the discussios with the otable CIOs icluded i this paper, Kor/Ferry Iteratioal developed a questioaire to gai isight from the CIOs at the Fortue 500 compaies. Their resposes regardig trasformatio, iovatio ad the expectatios placed upo them are elighteig, yet hardly surprisig: Whe asked if trasformatio ad iovatio i busiess operatios, products ad services have become icreasigly importat to their eterprise, 93 percet of respodets said yes. Eighty-eight percet of those surveyed stated they are tasked with, ad fuded to trasform operatios, create chage, ad iovate more tha ever before. The majority (79 percet) of respodets believe they are better qualified ad positioed to maage busiess process improvemet ad iovatio tha other C-Suite executives. Every respodet (100 percet) stated they believe it has become critical for CIOs to become more effective commuicators ad cosesus builders as a ecessary elemet of servig as agets of trasformatio, chage ad iovatio. Whe asked if they believe they are viewed by seior maagemet as effective commuicators ad cosesus builders, ad as effective agets of chage ad iovatio, 79 percet of those surveyed said yes, while 12 percet said they were ot ad ie percet were usure. I terms of fudig, the respose was mixed. Whe asked if they foresee a resurgece of fudig for IT research ad developmet for ew IT iitiatives i support of trasformatio, chage ad iovatio, oly 42 percet said yes, while 39 percet of respodets were less optimistic, statig o ad 19 percet remaied usure. 5

6 There s time allotted at each board meetig for discussio ad update o our goals ad project deliveries. David Kig SVP ad CIO Regal Etertaimet Group commetig o expectatios that CIOs make a strategic cotributio. Growig up as a sigle brad with systems that were built for oe busiess model has meat that we eed to selectively replace our Tier 2 ad Tier 3 software with state-of-the-art Tier 1 systems, he explais. Ay trasformatio at that level is iheretly strategic. With aual reveues approachig $2 billio, Chico s FAS requires systems capable of addressig a differet scale of operatios ad a eve faster pace of chage. As a executive team, we have also tighteed up our maagemet protocols to esure fast decisio makig amog all departmets i the compay, he otes. As a CIO s status rises, expectatios also rise. Oe sure sig that Kig is expected to make a strategic cotributio ca be see at compay board meetigs. There s time allotted at each board meetig for discussio ad update o our goals ad project deliveries, says Kig. Toy Costa, VP ad CIO at Bumble Bee Foods i Sa Diego, Califoria, says that he costatly challeges himself to act as a busiess parter. He takes a leadership role i promotig busiess aligmet ad process defiitio wheever possible. As a CIO, you will always have the resposibility to provide the core stability, reliability, ad security of the ifrastructure ad techical solutios but the real value i today s IT orgaizatios is bridgig the gap betwee strategic directio ad solutios, says Costa. The more you separate yourself from techology ad acroyms, the more you will be viewed by the busiess as a strategic parter. Give the maturity of iteral IT processes ad models, the tactical capabilities of IT orgaizatios were ofte take for grated. Uder the rules of Sarbaes- Oxley, however, the performace of IT orgaizatios are measured. As a result, IT has become more visible. For the CIO, this icreased visibility has bee a mixed blessig. May busiess leaders look to you to solve their departmetal iefficiecies with tools ad solutios. I believe it is equally importat to collaborate ad challege each fuctioal leader to defie busiess processes to support their fuctioal ad strategic eeds, says Costa. Systems eable busiess processes; they caot compesate for the lack of defied, repeatable processes. Costa strives for balace whe staffig his IT orgaizatio. He looks for aalytical ad busiess talet, as well as strog techology skills. A IT orgaizatio eeds to collaborate ad commuicate at a level that the busiess parters uderstad ad appreciate. We strive to be viewed as value-addig parters, ad ot as a support orgaizatio, he says. 6

7 He also cosiders himself fortuate to have participated i several sigificat busiess chage iitiatives over the course of his career. I ve become comfortable with chage. I truly feel that chage is good ad I promote it regularly both withi IT ad the larger busiess, he says. I believe that if you wat to remai competitive i a corporate eviromet, you eed to challege the status quo. All of the CIOs iterviewed derive a high level of satisfactio from beig perceived as a busiess parter istead of a techology cosultat. The perceptio ot oly beefits the CIO it also helps the orgaizatio. My busiess peers say they geuiely appreciate a CIO with a busiess focus someoe ot cosumed by the techology but who uderstads the value of providig leadership to a solutio, says Costa. I still ejoy techology, but I challege myself to put it i the backgroud of the discussio. Pushig techology ito the backgroud of strategic coversatios makes sese for a variety of reasos. Although techology is very importat, ad i may cases ca be a differetiator, I do t believe the emphasis o techology is as strog as it was five to eight years ago, says Costa. Today, the value of a IT group is its ability to uderstad busiess requiremets ad provide highly efficiet solutios, regardless of the techology. Summary I today s ecoomy, ew busiess models appear, rise, declie ad vaish with uervig rapidity. Oly the most agile orgaizatios ca remai competitive i this kid of eviromet. My busiess peers say they geuiely appreciate a CIO with a busiess focus someoe ot cosumed by the techology but who uderstads the value of providig leadership to a solutio. I still ejoy techology, but I challege myself to put it i the backgroud of the discussio. Toy Costa VP ad CIO Bumble Bee Foods The emergece of IT as a irreplaceable feature of today s competitive ladscape has propelled the CIO from a supportig role ito a leadig role. As the speed of busiess chage accelerates, the role of the CIO will cotiue evolvig. Tomorrow s CIOs will fid themselves copig with ew duties, greater resposibilities ad higher expectatios. Oe tred appears clear: Competitive orgaizatios will expect their CIOs to serve as strategists as well as eablers. CIOs will assume leadership roles i product iovatio ad the opeig of ew markets. They will be perceived less ofte as maagers of techology ad more ofte as agets of chage ad busiess trasformatio. Best-practice CIOs are icreasigly beig viewed by their CEOs as the orgaizatio s primary chage aget. Ideed, a ultimate sig of success is whe the CIO s pricipal evaluatio criterio is his or her ability to drive chage, writes Meta Group s Graham Waller. 7

8 CIOs are headig ito ew ad excitig territory. Fortuately, the skills ad kowledge they have acquired will serve them well. Their uique uderstadig of eterprise-wide busiess challeges has prepared them to meet the demads of a ever-chagig busiess eviromet i which techology is a meas to a ed, ot the ed itself. Kare Rubestruk is a Seior Cliet Parter i the Northe Virgiia office ad Member of the Iformatio Techology Officers Ceter of Expertise i North America. Mark Polasky is a Seior Cliet Parter i the New York office ad Maagig Director of the firm s Iformatio Techology Officers Ceter of Expertise i North America. About The Kor/Ferry Istitute The Kor/Ferry Istitute was fouded to serve as a premier global voice o a rage of talet maagemet ad leadership issues. The Istitute commissios, origiates ad publishes groudbreakig research utilizig Kor/Ferry s uparalleled expertise i executive recruitmet ad talet developmet combied with its preemiet behavioral research library. The Istitute is dedicated to improvig the state of global huma capital for busiesses of all sizes aroud the world. About Kor/Ferry Kor/Ferry Iteratioal, with more tha 70 offices i 40 coutries, is a premier global provider of talet maagemet solutios. Based i Los Ageles, the firm delivers a array of solutios that help cliets to idetify, deploy, develop, retai ad reward their talet. About our Iformatio Techology Officers Ceter of Expertise Kor/Ferry s Iformatio Techology Officers Ceter of Expertise focuses exclusively o the recruitmet of eterprise Iformatio Techology maagemet CIOs, CTOs ad their direct reports as well as seior maagemet at orgaizatios that provide products ad services to the eterprise IT marketplace. 8 For more iformatio, visit the Kor/Ferry Iteratioal Web site at or the Futurestep Web site at Copyright 2008 Kor/Ferry Iteratioal