Kroger CIO: Four lessons for strategic IT

Michael Krigsman



Almost every modern chief information officer wants to develop strategic relevance to their organization. Relevance is fundamental because technology expertise has extensively proliferated outside IT into business units and corporate functions, like marketing and finance.

During a lengthy CXOTalk conversation with Chris Hjelm, the CIO of The Kroger Company, we discussed these important issues.

Kroger is a huge company, with almost $110 billion in revenue and 400,000 employees. Given his experience, Chris' perspective is highly valuable and can teach us a lot.

As a brief summary, here are his four points on how a CIO can contribute strategically:

  1. Earn credibility as a reliable service provider
  2. Learn the business profoundly well
  3. Develop relationships with leaders across the company
  4. Rely on experts, both internal and external to the organization, to help you keep up with the latest technology

This simple advice presents a roadmap for CIO and IT relevance. However, executing the four-step program requires infrastructure, process, people, and technology. In other words, it's far easier said than done.

Despite the combined simplicity and difficulty, we should listen to Chris Hjelm's comments. He is a senior executive for one of the largest companies on the planet and has been there and done it.

Please watch the entire conversation below:

Here is a partial transcript of our conversation. edited for length and clarity. You can read the entire transcript at the website.

How do you ensure alignment between IT and the business goals of the organization?

First of all, having a seat at the table and being part of developing the strategy for the company.

Next, make sure the strategy manifests itself down into departments of the organization. Ultimately, we are the broker that has to manage dependencies and resource constraints across the entire organization and translate the macro strategy of the company into merchandising, logistics, or marketing.

Then, get senior business leaders to help prioritize projects across business domains.

There is always a strategic conversation that has to happen for the big bets. Those bigger bets often require getting an executive-level group together. They can look at the dependencies and trade-offs, so whether that's capital or expense, talent, or operational capacity, or the capacity to take on change.

How do you approach making strategic technology investments?

One of the early investments we made on the innovation front was a system we refer to as Queue Vision. It was very novel, but today many people have copied it.

It used a combination of infrared technology and predictive analytics to count the people coming in our stores and at our checkout lanes, to estimate when someone was going to get to the front of our store. That technology allowed us to take an average wait time of around four minutes down to roughly 30 seconds.

That was a fairly significant capital investment. But, we [created] a dramatic improvement in service with very little to no incremental labor. That is the kind of transformational change about which customers care.

Those strategic investments will stand for many years. A lot of companies and IT departments struggle to get [strategic projects] approved. People think about it, but [do not know] how to make it happen.

How do you ensure that IT and the business come together on strategic projects?

We have customer relationship managers whose specific role is to work with the senior business leaders. They sit in their strategy sessions, their staff meetings, and help build business cases around change, around innovation.

Senior IT leaders and I make sure the company understands what's possible, from a business perspective. We have to be the voice of what's possible and help build a business case that is tangible, real, and allows the company to make strategic bets with confidence.

What is your view of IT as a cost center?

One of our strategic objectives is continuing to optimize how we run the business every day. Within Kroger technology, we have clear objectives around core services that serve eight million customers a day and support our 400,000 associates with highly reliable systems and response times.

That's the ante just to get into the game.

But we put pressure on ourselves to continue to do this more cost effectively so that we can help invest more of our IT spend on the things that we believe create a long-term sustainable competitive advantage.

What advice do you have for other CIOs?

First, earn credibility as a service provider who delivers every day. Without that credibility, you're not going to be able to take that next step in the relationship. You have got to earn your stripes.

Second, go deep and really, really understand how your business works. That means more time in plants, more time out in the stores; whatever it takes to become an expert in the business, so you speak their language and truly understand their point of view. Listen and have a two-way dialog with leaders of the company.

Third, you have to keep up with what's possible in technology. None of us can know it all, but you have to divide and conquer with your team. As the senior leader, pick up nuggets of insight from your Chief Technology Officer about infrastructure, servers, and networks. Do the same thing with your head of R&D; look at other industries and what great things they're doing.

You have to become the pragmatic person helping the organization understand what's possible.

To be successful, you're going to have to take some risk. True innovation has the highest level of risk. It's the most fun, has the most reward, and it does make a difference. You just have to be willing to take a little bit of risk to be part of those conversations.

If you have not proactively asked to be part of the strategic conversations or to be part of making those decisions, insert yourself and explain why your opinion counts.

Oct 13, 2015