How to Make Sure the Downturn Doesn't Widen the CIO-CEO Credibility Gap
Gartner has issued a warning to enterprise CIOs and their service providers: Budget cuts are coming and the CIO better be ready. For too many CIOs, this is a too-soon reminder of the fiscal issues which CIOs faced during the last economic downturn. It's also an uncomfortable reminder of how those issues affected relationships, reputations and credibility.
And now, after several years of solid budgets and (hopefully) careful investments in projects and people, CIOs may be facing another CIO-CEO credibility gap. When the profitability crunch comes, plans and people come under fire, sides are taken, and credibility suffers.
IT: A Target in Good and Bad Times
Even now, most CIOs get weekly or even daily reminders that IT is-and probably always will be-a primary target when things don't go well. The flip side, unfortunately, is almost as bad: IT is rarely given credit when things do go well. From businesses' point of view, in an ideal world, the IT function should be transparent and seamless.
With IT budgets potentially being reduced, circumstances mandate that CIOs think hard about protecting their credibility with their CEOs. Those CIOs with good credibility will have the most leverage in decision making in the lean years. Those without it could become the dinosaurs of the past.
Forget Your Ego
What's the key to maintaining CIO-CEO credibility when the discussions often revolve around what's not being done? When I counsel CEOs on improving relationships with their bosses (board members and shareholders), I tell them one thing: Recognize and accept your role as a business enabler and forget your ego. For CIOs, that means acknowledging your service provider role and making the most of that role. Then, do what's necessary to demonstrate your value to the other lines of business. Here are five steps to take.
Step 1: Focus on Your Contribution-Not on What You're Doing
The first step is to focus on your contribution, not on what you're doing. Too many IT executives get caught up in their process or daily activities. CEOs aren't interested in how you get something done; they're interested in the contribution you make and the costs of that contribution. When presenting formal reports, or even just in conversation, show what you've done and the difference it's making.
To make sure your contribution actually matters to the CEO, make sure that your goals are driven and supported by the CEO and the other execs running the business. That leads to the next two steps.
Step 2: Stay Aligned with the CEO's Strategic Direction
The second step is to ensure that you are clearly aligned with the CEO's strategic direction. To be successful, you need a high degree of personal and functional alignment between yourself and the CEO. You want to do things that have strategic and functional value to the CEO, thus ensuring that the CEO "gets it." If you do this, your contributions will have more potential to add overall value to the business.
To do this, you must know the CEO's expectations explicitly: What constitutes success and what would the CEO consider failure? The only way to find this out is to ask. If your CEO isn't making this clear, be sure you take the initiative and drive a dialogue.
Step 3: Win Internal Advocates
The third step is to make certain you win internal advocates. Be sure you're aligned with the vision of your peers. Recognize that expectations may vary from one business to another. One group may want a speedy response. Others may be focused on technical expertise. Ask to attend the business meetings of the people who run the business so that you understand what they're trying to do. Overtly ask for feedback on how well IT is performing and welcome criticism as a gift. Ask what you could do to make your peers more successful. Incorporate their responses into IT's goals and objectives.
Once you've received feedback, make adjustments and be responsive. Then, go to the next step and report back to your peers. Often, we think that the changes we've made will be noticed, but they rarely are. Make sure your peers know how you're adjusting to provide them better service.
In addition, make sure that you generate data on how IT has met its goals. Then demonstrate how this has helped other departments meet their goals. Showing how your service has helped make others successful will make a persuasive case for you. If you can demonstrate that you're responsive to the business lines and supportive of their success, you'll win internal advocates who'll sing your praises to the CEO.
Step 4: Be Able to Document What the IT Role Costs
The fourth step is to make sure you're able to document what the IT role costs. A lot of companies try to hide IT costs-and that's a big mistake. Have a clear idea of what the business pays for your services. Know what IT services cost, how money gets allocated and what services your customers receive as a result.
Having these numbers at hand will benchmark costs and provide a useful framework when budget-cutting time comes around (as it always does). Budget-cutting is a way of life in business. Your approach should be: "IT's been providing X services at Y cost. What can you live without?"
Whatever you do, don't promise to come through with the same services at the same level if your resources are cut by 20 percent. You're just setting yourself up for a massive failure.
Step 5: No Surprises. Ever.
The fifth step is to make sure the CEO is never faced with any surprises. Ever. Don't suddenly discover that there will be a week-long system outage because the vendor didn't deliver. The minute you learn of a problem, let the CEO know. Accept responsibility and identify what you'll do to fix it. The longer you wait, the more it looks like you're trying to cover up, whether you are or not.
The Bottom Line
The bottom line is, an IT department is a service provider. Being successful in that role requires figuring out how you can best add value to the business lines and documenting just how you've done that. When you're doing that consistently, you'll find you've earned abundant credibility.
Ken Siegel, Ph.D., A.B.P.P., is president of The Impact Group, a Los Angeles-based group of psychologists who provide consulting services to the management of leading global companies. Over the past 20 years, Dr. Siegel has lectured around the world on leadership development, cultural clarity, strategic alignment, team enhancement, management development, conflict resolution and executive coaching. He can be reached at email@example.com.