January 26, 2009, 10:40 AM — I always thought that I was lucky to be born in Brazil, but the real value of my ancestry became apparent to me only after I became CIO of General Motors Europe. As you can imagine, a lot of my energy was consumed by the process of managing a large, decentralized team that was both multinational and multicultural.
As a native Brazilian, I was considered a "foreigner" by everyone. That perception offered me a cloak of neutrality that came in handy whenever I had to resolve disputes. It also provided me with a unique perspective on the skills required to manage a busy IT shop in a global economy.
Now seems like a good time to share some of the insights that I acquired at General Motors and other global organizations such as DHL, General Foods and Philip Morris. I hope you will find them useful as you confront the challenges of today.
As the global economy unravels, IT executives face dilemmas of truly mythic proportions. Despite understandable feelings of helplessness, they must still choose their destiny. Whether they emerge as heroes or scapegoats is up to them.
Many CIOs will find themselves trapped in a labyrinth from which there appears no hope of escape. On one hand, they must focus on cost reduction. On the other hand, they must produce tangible results for the business.
Striving for cost reduction, their decisions are driven more by panic than logic. Some of those hasty decisions can make it nearly impossible for IT to deliver the results necessary to sustain the business in times of great stress.
As a survivor of four previous recessions, I can testify that hard times present excruciating business challenges. Hard times also bestow incredible opportunities for building the infrastructures required for future growth.
So you have a choice. Do you hunker down and wait timidly for fate, or do you seize the moment and act like a hero?
To the sacrificial lambs, I offer my condolences. To the would-be heroes, I offer two pieces of advice:
- Cut IT expenses deeply, but remember to set aside adequate funds for development and revamping of your systems and infrastructure. Think of those funds as seed money for growing the business.
- Whatever you do, make sure that you keep enough money in the budget for retaining your top performers. They will get you through the hard times.
Even if you stop reading now, I hope that you consider those two pearls of advice and take them to heart. If you do, you will increase your chances of surviving through the next couple of rough quarters. You also will be nicely positioned for the recovery-when it arrives.
For CIOs with genuinely heroic souls, I also offer the following suggestions:
- Build a great team. As the manager of an indispensable organization within a larger business, one of your primary responsibilities is attracting nurturing, promoting, motivating and preserving talent. This responsibility to find and manage talent extends well beyond the traditional boundaries of the company to include vendors, consultants, business partners and all the various outsourcers that IT depends upon. A deep pool of talent is a great asset and the best hedge against the uncertainties of a bad economy.
- Proactively establish goals for IT. Don't wait for someone to tell you what to do or you'll always be trailing the pack. In a downturn, it's actually easier to set realistic goals and accomplish them than it is during periods of growth. Since all areas of the business are in cost-cutting mode, now is the perfect time to simplify your IT landscape by eliminating legacy systems and redundant components. Remember, IT owns the systems, so there's no excuse for not acting swiftly when the opportunity arises to ditch a costly and inefficient legacy system and replace or revamp it with a more cost-effective alternative.
- Hold all of your vendors accountable. Make certain they are delivering on their promises to you. Remember, they're part of your team. If they're not delivering, dump them or renegotiate the price. In today's economy, you can get two projects done for the price of one.
- Extract maximum value from existing IT investments. OK, maybe you inherited a bunch of clunky mismatched systems from your predecessor. Go back to the vendors (or their parent companies) and get them to show you how to get the most value from the systems they installed. If they're smart, they'll see your request as an opportunity to build deeper relationships with your team, and they'll jump at the chance to help.
- Make sure that everyone knows that you are responsible and accountable. It might seem counterintuitive, but now's the perfect time for you to step up and take on more responsibility. Don't be afraid to define your role broadly, and don't hesitate to be accountable. Let's face it: You're going to get blamed anyway if something goes wrong, so there's no point in trying to duck. You own IT, so act like a leader and show your pride. Demonstrating ownership and accountability makes it less likely that someone else will try to usurp your legitimate role as the company's technology czar. The last thing you need in today's environment is some self-appointed "expert" from a business unit telling you how to run IT, or recommending which systems to purchase from which vendors. I have a simple rule for establishing boundaries: If it looks like IT, feels like IT and smells like IT, then it's IT-and the CIO is responsible for it.
- Build and manage relationships up, down and sideways across the enterprise and beyond its traditional boundaries. Remember that IT is a team effort, and you need cooperation from an extremely wide range of participants, in and out of the organization, to get the most value from your IT systems. Usability and user acceptance will always be critical issues, so don't forget to include the user base in your considerations.
- Act like a CEO. Maybe it will be different in the future, but for the time being, CIOs are the chief executives of complex businesses that exist within larger complex businesses. When you act like the CEO of IT, you generate respect for the IT organization. That respect usually translates into more cooperation from all the various constituencies required to keep IT running smoothly. Acting like a CEO also makes it easier for you to sell your programs to other C-suite executives, making it more likely that your budget requests will be approved and funded.
Last but not least, I urge you to think green. Sustainability is more than a trend; it's a reality of global business. It's also a smart strategy, especially when you consider the amount of money that will likely be spent by the U.S. government on green construction and green energy projects in the next four years. IT can play a crucial role in developing, managing, auditing and analyzing green projects across the enterprise, so do yourself a favor and don't surrender this opportunity to accumulate more responsibility.
When I began my career back in the early 1970s, I never dreamed that IT would evolve into the driving engine of a global economy. Even as the global economy falters, it seems to me that IT is more important then ever. This puts a heavy burden on the shoulders of CIOs. A couple of years ago, people wondered if CIOs were adequately prepared for their new roles as C-level executives. Now people wonder if CIOs are prepared to face a complex set of evolving challenges in a radically altered economy.