Laying the Pavement for the Future-State CIO Journeypost by Chris Curran on January 14, 2011
Guest Post by Louie Ehrlich, President Chevron Information Technology Company, and CIO, Chevron Corp.
Note: This is the third in a series, start with part 1 - The Journey of a Business Strategist CIO
I’ve written a couple of posts on what the CIO role can be in the future and the importance of our profession leading the way there. This is my last post on this topic and I want to focus it on two things: why this is an important journey to take and, more specifics on the two stages of the journey that lead to the goal of “business strategist CIO.”
It’s simply not possible to function as a business strategist CIO, driving company strategy as a true business peer, if you haven’t addressed and mastered the previous two stages of the journey: the functional, where the IT function and the CIO earn credibility by delivering effective and efficient services, and the transformational, where IT and the CIO become influential by successfully leading enterprise change through IT enablement. I’ve learned that you have to determine what stage you are primarily in, identify barriers to success in that stage, and get specific about removing the barriers.
So what are those specifics? When I’m operating at the functional stage of the CIO role, one thing I’ve done to identify the gaps and also build credibility is to benchmark. It’s difficult to have credibility around things like efficiency and cost if you have nothing to compare to in measuring your progress. Business leaders are used to benchmarking their competitive positions respective to the industry, so it’s really critical that you do that too. This removes the emotion about the gaps, provides insights in terms that make sense to the business, and helps you get specific on ways to achieve the functional excellence that has become table stakes in the CIO profession.
Another specific thing we’ve done is to create a deliberate and very transparent plan for making improvements relative to those benchmarks, with tangible commitments, goals, and key performance indicators that are validated by organizations outside of the IT function and communicated rigorously over time. There are many other specifics, but at the end of the day, experience tells me that benchmarking, building a plan against the benchmark, achieving the plan with excellence, and being very transparent about it all, move the credibility needle significantly.
Once the foundation is in place and the credibility is of sufficient strength, advancement to the transformational level becomes easier (not easy - just easier). My observation is that most CIOs are primarily operating at this stage today, although we still worry about the functional stage - and that’s appropriate. At the transformational level your personal focus as a CIO shifts outward to the enterprise. Your team becomes more process oriented. Your relationship with stakeholders becomes more of a trusted partner, and the competencies you’re primarily leveraging are collaboration, influence, and change leadership. The value delivered at the transformational stage is additive to the value delivered in the functional stage and is measured on factors such as optimizing business processes and enterprise agility.
Experience tells me that there are four key aspects in successfully achieving and sustaining this stage: Effective governance; portfolio management; enterprise architecture with teeth; and business knowledge in IT professionals.
In terms of governance, we’ve done three things that have helped to create success. First, I chair an enterprise-level governance structure that consists of very senior level business leaders focused on strategic alignment. In addition to the obvious alignment and integration this fosters, it creates great credibility. Secondly, I also chair something we refer to as the CIO Leadership Team that includes the senior IT leaders across the Chevron landscape. This group primarily focuses on functional excellence and developing the strategies that are ultimately tested with the senior governance group. Finally, we have been smart to know that decisions are made all over the globe, many times a day, that obviously cannot and should not be made by a single governance group. We have laid out a policy and a set of procedures that very much aligns with delegation of authority all over the world, but ensures decisions made have been considered in the context of our intended direction. We then audit these over time to ensure alignment.
With regard to portfolio management “bottom line” it is a must in this stage. Good portfolio management ensures that the highest ROI is being returned for the investment being mad - and this is ultimately the goal for IT and all investments in a business.
On enterprise architecture I offer one key message: give it teeth. In other words, find a way to link the approval of funding and project decisions to architectural alignment. Without that, and even with very good intentions and people, experience tells me that driving towards an intended architecture in a large organization is very slow going.
And lastly, but I think most importantly, none of this is really possible without an organization of IT professionals who understand the business (many of which are co-located or embedded within the business) who can bring the possibilities for improving business processes forward. That’s how you gain influence as a partner and create a successful transformational IT organization.
Pass those functional and transformational milestones and you’re ready to move on to the third stage of the journey - a position as a true business strategist. One final comment: all of this is a continuous journey. As CIOs we are never solely in one “stage.” Our goal in defining the Future State CIO Journey isn’t to leave any stage completely behind; fit is more about creating and maintaining success in each stage, so that you, as the CIO of your enterprise, can dedicate adequate time, as a business strategist CIO, in using your unique combination of business and technology knowledge to create great success for your company. That’s what it is all about at the end of the day - and it is what will ultimately sustain and grow the importance of the CIO profession.
Louie Ehrlich, President, Chevron Information Technology Company, and CIO, Chevron Corp. Ehrlich is an advisory board member of the CIO Executive Council and one of the architects of the Council’s Future-State CIO Journey Framework.