Are You a Bear Market CIO?
From 2005 to 2008, my approach to business development was simple. I would walk into my office, put my feet up on my desk, throw open the window and smile as bluebirds flew in with juicy search projects in their beaks. I was a bull market executive recruiter.
In 2009, with executive search revenues down considerably, my approach is a little different. My feet are squarely planted on the floor as I tirelessly work my networks to unearth companies in need of IT leadership. I have adjusted for the bear market. When reflecting on this change, it occurred to me that CIOs must make a similar shift from bull to bear. In bear markets, a company's goals, culture and practices can change dramatically. CIOs who adjust will fare far better than those who do not. If you're a bull market CIO in need of help, I offer this checklist:
Reach beyond IT. From human resources to customer service to call center operations, the majority of today's CIOs (nearly two-thirds of you, according to CIO magazine's 2009 State of the CIO Survey) have taken on at least one major responsibility beyond IT. If you have not, the bear market should provide you with significant opportunity to do so. Not only will this help you find new ways to leverage IT during these tough times, it will also help you to raise your own visibility as an enterprise leader.
But clean up your own shop first. The CIO survey reported that 70 percent of CIOs believe that IT is considered an integral business partner and is beloved by the company. But it's not all a lovefest. In fact, 46 percent of CEOs gave IT marks of "fair" or "poor" when it comes to improving the quality of products or processes, according to the survey.
"In tough economies, 'one must be purer than Caesar's wife,'" says Greg Buoncontri, EVP and CIO of mail services company Pitney Bowes. "You cannot offer assistance in other areas unless you've got your own function in order."
CEOs are deciding which of their executives are keepers. Now is not the time to take your delivery record for granted. Know your numbers. Any bull market CIO knows "IT as a percentage of revenue" or "IT's share of corporate expenses," but in a bear market, aggregate numbers are not enough.
"Good times are forgiving and people are less focused on expenses," says Frank Wander, CIO of mutual life insurance company Guardian Life. "In down markets, you need to have detailed figures of your expense pools at the ready."
In 2007, Wander and his IT team began to gather cost data, and in 2008, they put in a formal expense optimization program with a structure for engaging the business in cost discussions.
If you and your senior leaders do not have total visibility into what you spend and why, now is the time to set up something formal.
Make new friends. In tough times it is tempting to spend time with the people who love us and steer clear of the people who don't. If during your company's last growth spurt, you won the devotion of the head of sales and marketing, you now need to win over executives who drive controls and efficiency.
"As the market shifts, so do the spheres of influence inside your company," says Buoncontri. "Be sure to focus on the people whose stars shine brighter during tough times."
Involve your project management office. In good times, the job of your project management office is to keep track of all of those wonderful investment initiatives; in lean times, the project office is no less valuable.
"In my project office, I have experts in technology, finance, architecture and procurement," says Ray Barnard, CIO of Fluor, a large engineering and construction services company. "Their job during this economy is to take last year's plan and meet with the lines of business to gain consensus about prioritization, so that I can reset my plan. They ensure everything from delaying software purchases to advising on edicts against travel."
If you haven't done so already, now is the time to make the project office a critical part of your cost management offense. Discover who your real partners are. "Let's say I've got 30 key suppliers when times are good," says Barnard. "During this down market, only five of them have stepped forward to talk about how we can work together during this economic period. You would have thought they would all come forward, but it turns out that some of them behave like commodities, not real partners."
To separate the proverbial wheat from the chaff, Barnard's procurement office sends a letter to all of IT's suppliers. The letter asks them who can offer increased value during the downturn.
"Our focus in these discussions is not about cost, it's about partnerships and value, " says Barnard. "The ones who step up know that while our relationship may not be as beneficial to them today, we'll all make good money down the road."