When Andre Hoeben, of Océ, comes across proposals from his IT counterparts, the first question he always asks is “what is the gain for the company”. His second question will be “Why is it happening now, why is it needed or why to this extent”.
As the holding company for the Océ Group, Océ manufactures production printing and copying hardware and related software. The group has around 24,000 employees globally and gross income of more than $3.5 billion per year.
As managing director, Hoeben runs the Singapore and Malaysia offices of the Holland-based company. He also takes care of the organization’s distribution network for the region.
The third key issue, he says, is to consider the perspective of the entire company. IT decisions might be made without really looking at the effects on other business units within the organization, he explains. And finally, another important question he will be asking is about the precise costs stemming from the IT decision.
“When you invest and there is no immediate return from a money perspective, there should still be returns from an operational or process perspective,” says Hoeben.
Demonstrate market victory
Dave Aron, vice president and research director in Gartner’s executive programs, focuses on CEO-CIO interactions. He said that generally, CEOs want their CIOs to explain IT issues in terms of business strategy and value. In every business case that a CIO presents, it should include a statement on how their proposal can help the organization win in the market, he says.
“Whether it’s an application, infrastructure or regulatory compliance investment, they want it in terms of business strategy and business value, not in technical terms,” Aron said. “In terms of business strategy, this means a statement of how will this investment help our enterprise win in very simple business-focused language.”
Specifically, when a CIO presents a project, CEOs typically are keen to know what the CIO has previously asked for, what had actually been delivered and what is the next step, says Marianne Broadbent, managing director at executive search firm Edward W. Kelley & Partners (EWKP). Broadbent works with CEOs on assisting in the selection of CIOs for organizations and undertake leadership capability assessments for CIOs and their teams.
Yes, ask dumb questions
In any conversation with their CIOs, the CEO has to make sure his counterpart in IT explains everything clearly.
“It is very important to ensure that CEOs behave with CIOs in the same way as they would behave with other executives. Do not be afraid to ask dumb questions and not be afraid to really push the situation with the CIO to have them explain and justify in business terms what is it exactly they are seeking to do,” says Broadbent.
Oce’s Hoeben is never afraid to ask questions, no matter how simple or obvious they are. “Sometimes if you listen to the IT people, it makes sense until someone asks a silly question, then suddenly everyone stops and goes ‘oh, I have not thought about that one’,” he explains.
Besides being able to ask the pertinent questions, the CEO can play a part in enhancing his relationship with the CIO. He can constantly work to translate and clarify exactly what the organization’s business intentions are as well as what are the key risks and opportunities so that the CIO can understand and embed these factors into the IT decisions, explains Aron.
Value rather than cost
One of the biggest misconceptions that CEOs have of CIOs is to view IT only as a cost, instead of a source of business advantage or value. “So quite commonly the way a CEO will look at IT is to ask ‘Are we spending too much or too little on IT as a percentage of revenues or even as a percentage of total business costs?’ rather than ‘are we getting the right value from IT, is it pointed in the right strategic direction?'” says Aron.
Often the CEO’s perception is that the CIO is too technical. This is because a CIO will sometimes speak to his CEO without really explaining what does it really mean to the business. “For instance, how this has made the business more profitable or has it helped us serve the citizens better in a government case, or how does it help new products to market faster,” says Broadbent.
All these problems probably grew from the way both executives work. CEOs and CIOs tend to have different mindsets on their working style, according to Aron. The CEO tends to be more results-oriented when the CIO is naturally more capabilities-oriented. Also, the CEO tends to be more ‘future-looking’ where the CIO is more ‘present-looking’. The CEO tends to be slightly optimistic while the CIO is slightly conservative.
“In general, the requirement is for the CIO to be able to adapt to the CEO’s mindset, to be more future-oriented, evangelizing results oriented in the way they think and communicate with the CEO, without loosing connection to his own role,” says Aron.
The CEO is the CIO’s ‘Customer’
Since the CEO is the boss, the onus is on the CIO to put more effort in making their relationship work. Ultimately, the CEO is, in a sense, the customer of the CIO, says Aron.
Firstly, CIOs should consider themselves as business executives. CIOs today wear a number of hats. While one hat is as the most senior executive responsible for IT, the CIO is also part of executive leadership of the organization. “In that sense they have to be just like other executives and be able to look at the business as a whole, not just their part of it,” says Broadbent.
Also, IT departments need to look at themselves like other support units–finance, human resource, logistics–of an organization, says Naresh Kumra, president, Asia Pacific for Belden. All these units need to understand business priorities to help grow and improve the performance of the company, he adds.
Broadbent believes CIOs should communicate with their CEOs in a simple three-point process. “You need to say, ‘here’s what we promised; here’s what we delivered; here is what we want now. There’s no point pitching a business case without that context.”
Oce’s Hoeben says his experiences from an IT consultancy role at Dutch bank ABN Amro gave him a better insight on how IT executives communicate.
“From an IT perspective everything seems easy to explain but the counterparts at the other side of the table don’t follow because they don’t have the same background, and don’t look at the process in the same way. So the translation to layman terms, is a big challenge.”
Most CEOs and their leadership teams are not experts in IT, points out Belden’s Kumra. This means that the CIO is in a unique position to assist the executive management in analyzing business issues and help them understand what issues can be best resolved using IT.
Make friends, influence people
CIOs often misjudge the extent and nature of communication with fellow executives that is required constantly. According to EWKP’s Broadbent, a good CIO has to spend at least 50 per cent of their time talking to their business colleagues. Anything less could mean that management is neither well informed nor engaged about the major technology development currently happening in the organization.
“It is very important to appreciate that your business colleagues want things done with them, not to them. It has to be done in a way that the business can readily understand why this development is taking place and how it will improve the business.” says Broadbent.
Another often neglected aspect of a CIO’s communication with his fellow executive management is that the CIO tends to come up with answers instead of options during meetings on business cases or developments.
The CEO can help establish the culture at the workplace; how work needs to get done, but the CIO has to build strong ties with the CEO so that when there any disagreements, the CEO would respect the CIO enough to listen, says Broadbent.
“What we call political capital is very important. This and the credibility that you built up so that when you need to bring the bad news, you will not be ignored because you haven’t put in the time to build the relationships. It’s really about your interactions every single day. That’s really what it’s all about,” says Broadbent.