Digital Transformation and the CIO

Business expectations of the Chief Information Officer role have changed dramatically, forcing CIOs to adapt and evolve. This episode explores what's happening with CIOs and offers practical advice to both the business side and to CIOs themselves.


Jul 11, 2015

Business expectations of the Chief Information Officer role have changed dramatically, forcing CIOs to adapt and evolve. This episode explores what's happening with CIOs and offers practical advice to both the business side and to CIOs themselves.

Our guest is author Martha Heller, who is president of Heller Search Associates. Before she established her career in executive search, Martha was Founder and Managing Director of IDG's CIO Executive Council, a professional organization for CIOs.

During her seven-year tenure at CIO magazine (IDG), Martha developed leadership programs for CIOs and directed the CIO Best Practice Exchange, a members-only network of IT leaders from top-tier organizations. Martha wrote a weekly column on IT leadership and led a series of executive events on IT staffing, career development, and leadership. Before CIO, Martha was an editor at Rutgers University Press.

Martha continues to engage with CIO audiences every day. She is author of The CIO Paradox: Battling the Contradictions of IT Leadership, and Be the Business: CIOs in the New Era of IT. Martha writes’s Movers & Shakers blog, and her e-newsletter, The Heller Report: You and Your CIO Career, is read by thousands of IT professionals every week.


Michael Krigsman: Episode number 198 of CXOTalk. I’m Michael Krigsman, and CXOTalk brings the most innovative leaders in the world to talk about the impact of digital disruption on our world, on our society, and on our companies and organizations. Today, I am so thrilled, because we’re speaking with Martha Heller. Martha is a multiple book-author, and she is the founder of Heller Search Associates. Martha is a very prolific speaker at Chief Information Officer events, and without a doubt, one of the leading and most important thought leaders among CIOs, and supporting that CIO community anywhere in the world. so, I’m so thrilled to welcome Martha, and I want to say a huge thank you to Livestream, which provides our video infrastructure. And Livestream folks, if you are listening, we love you, you guys are great. Thank you. So, Martha Heller, how are you?

Martha Heller: I’m doing great! You’re making me feel like a rock star, Michael. I appreciate it!

Michael Krigsman: Well, I think in the world of CIOs, you are the rock star, and that’s no lie!

Martha Heller: My point exactly!

Michael Krigsman: So, Martha, tell us about the things that you do, give us some sense of context and place, and I see sitting next to you is your latest book, so tell us!

Martha Heller: Absolutely! So, thanks so much for the question, Michael. You know, I joined CIO Magazine back in the late 90s, when I started an online column for CIO magazine called “Soundoff”, and aging with the CIO community ever since then. So, I believe I have communicated some kind of message to the CIO community on a weekly basis for the last 17 years. So, if you do the math on that, that’s quite a bit of content, quite a bit of volume. In 2005, I decided to parlay that experience in those networks into the wonderful world of executive search, so my firm recruits CIOs and the folks who work for them, and boy once you’re trying to convince a CEO to hire a CIO, your knowledge of the challenges and contradictions of the CIO world becomes quite acute. So, at this point, I run a search firm, and I write all kinds of content for the CIO community, and I’ve just been endlessly fascinated by the evolving nature of that role.

Michael Krigsman: You know, I aso find it interesting that historically, and this is changing, historically the CIO role has been a male-dominated profession. You’re one of the top influencers in that community, and yet you’re a woman. So I find that’s also quite interesting as well.

Martha Heller: Well, you know, I’ll just address the gender diversity among CIOs. It’s true that the percentage of women who are CIOs is very, very small, and you know, what’s changing is that IT is not the only destination for women who are interested in technology. Marketing, for instance, is hiring technologists. Every company is becoming a technology company, so women interested in technology need not have IT on their career plan, there are many other opportunities for technology-oriented women. In terms of my role, being a woman in this sea of men, my background is journalism, and journalism, which has been more oriented towards gender diversity, let’s say, than IT. So even though I have chosen the wonderful CIO as my journalistic subject for the last 17 years, my background really ultimately is journalism, where you do have more gender diversity.

Michael Krigsman: In fact, we are doing a show next week with Andi Karaboutis, who used to be the CIO of Dell, and is now an executive vice president at Biogen, along with Kim Stevenson, who was the CIO of Intel, and is now Chief Operating Officer of one of their divisions, and we’re going to be talking next week about exactly these issues.

Martha Heller: What is interesting about that is both those instances, very strong female CIOs who are now leading organizations that have CIOs in them, while they have moved on to more broad business responsibilities. I’ll bring up another topic in a moment, and that is CIOs on boards, and that is a topic of great interest to the CIO community and corporate boards, “How do I get in on one of those opportunities?” In many instances, CIOs on corporate boards involve women, that, you know, whether it’s corporate boards trying to achieve diversity? I don’t know. But you have many instances of CIOs being appointed to corporate boards.

Michael Krigsman: So, you mentioned, you spoke about tensions, and of course the CIO role is changing, the goal of technology in the organization is changing, and maybe a good place to begin is what is your view of what exactly is changing in the world that’s driving CIOs to need to evolve?

Martha Heller: Sure. So, you know, I’m going to quote Bask Iyer, who is the CIO of VMWare.

Michael Krigsman: He was a guest on our show.

Martha Heller: It’s a small circle! You run in small elite circles. So Bask talks about the “CEO missing out syndrome”. And it’s where a CEO says, “I like my CIO. He, or she, has kept costs down, we’re as secure as I believe we can be, we’ve outsourced the appropriate functions, we’ve got good resilience, employee productivity tools; my CIO has done a great job, in fact, he’s done everything I’ve asked him to do! However, I feel like I’m missing out. There are cool things happening in Silicon Valley. You know Uber? What’s going to be the Uber in my industry, and are we really on top of the technology innovation that’s going to allow us to not be disintermediated? And, I look at my CIO and think, my CIO has never really been an innovator. He’s an operator which is everything I’ve asked for, but I’m going to go hire a Chief Digital Officer.”

So, that move, which many CEOs are making, can be fine, but it can also spell trouble for an organization for a number of reasons. CIOs who would like not to work under yet another technology leader, would be well-advised to step into the so-called “digital technology void”, and drive digital transformation not by themselves, but through partnerships and alliances as they’ve always done everything. But why now, what is happening with the CIO role? It is CEO-driven. And it’s in part, and it’s CEOs saying, “We need digital transformation, but my CIO’s an operator. I’m going to hire this other person. I’m not going to hire a new CIO.” So, digital transformation is driving an evolution of the CIO role toward influence, strategy, getting closer to the revenue stream.

What I will also say is that I’ve talked about the demand-side part of the CIO evolution, it’s CEOs expecting more from technology, more from IT. But I think CIOs themselves are also thinking, “You know, how am I going to spend this incredible digital revolution that we’re in the middle of? Am I going to sit around implementing the ideas of others, or am I going to move and go to another company, or change my role here, that allows me to really be a part of it, and to create a whole different layer, or level, of change?” So, ultimately, what’s changing is every company is becoming a technology company, software is making its way into products and services in ways that we’ve never seen before, that will have an impact on the leader of the technology function.

Michael Krigsman: So when you talk about the digital void, what do you mean by that, and how can a CIO fill those shoes?

Martha Heller: So I think one important concept to understand is that digital is not a function that requires a new executive and new hires and new resources. Digital is a capability that companies need to adopt across all of their businesses and all of their functions. CIOs who understand their roles as critical capabilities champions, “I have a uniquely end-to-end view, and I can see where we’re doing little pockets of digital innovation, where we’re not doing any innovation, which business leaders are spending on digital technologies and which aren’t. I need to create digital as an enterprise capability, and bring all of that to my company. Because if I don’t, we’re going to have little pockets of what I think of as ‘vertical digital innovation.’ We don’t have enterprise scale, we don’t have an enterprise strategy, and we’re entering risk into the organization.” So, you know, the “digital leadership void” is where CEOs are attempting to clamp down on, or get behind this concept of “digital”, so their instinct is to throw a new executive at it and throw a function at it, when really, digital is an enterprise capability that a CIO with an end-to-end view is capable of driving.

I’ll make one more comment on this. Whenever I talk to a CIO and they say something pithy or philosophical or existential, I steal from them and I tweet it out. I tweet out something that they said without attribution because A) we don’t have the character space and I want it to be more real-time than that. And then at the end of my book, I took my favorites from the last year and I listed them. And one of my favorites is when a CIO said to me, “We don’t need a digital strategy. We need a business strategy for a digital world.” And I think that that is a concept that all the leaders in the company need to have, rather than thinking, “What’s digital? We don’t know what it is, it could mean a lot of things, maybe it’s marketing, maybe it’s supply chain, maybe it’s employee productivity. Let’s hire a new executive to figure it out.”

Michael Krigsman: So the idea that the digital strategy is really a business strategy, rather than just a technology strategy, makes perfect sense. But I think the question then comes up: if you are a CIO and you want to be the person that is leading this, what are the obstacles that may interfere with that happening, and how do you overcome those obstacles?

Martha Heller: So, probably the greatest obstacle is the perception that IT is an operator, and that IT is about support and enablement, and not about innovation and strategy. And, what I would say to CIOs in their own companies is that if that perception is so embedded into the fabric of this culture and it is so deeply held, perhaps, this culture is not the right environment, not the right place for you to achieve your digital leadership dreams, and it may be time to pursue another opportunity where you have a chance to change those perceptions. That would be one major obstacle, and probably the most significant.

Another obstacle is the team. If you have a team of people who feel that their role is wait for the order, then take the order and execute on the order, you will not be able to achieve digital leadership, because you may change your relationship to the business but if your senior team hasn’t changed theirs, and you don’t have the right people in those spots, you will also have trouble changing that perception. But I would say, you know, the best way to start moving toward digital leadership is again, to recognize that digital is a competency and your job is to create that competency.

So I’ll give you an example: Dave Smoley is the CIO of AstraZeneca. And Dave said that, “We’ve got pockets of digital activity happening all over the place, but we’re not talking to each other.” So he set up a digital center of excellence. This is a cross-functional group, it does not exist in marketing, it does not exist in IT, and he brought in people from all different parts of the business that he felt had a leadership role in digital transformation. Once he got the center off the ground, he brought in a leader from another area of the business, someone with a lot of experience and respect, and this is critical, had some systems implementation experience. It’s fine and pretty to talk about the front end, but everything’s got to tie up with architectural integrity, and somebody with implementation experience will understand that.

He also made sure that in the center of excellence, he placed somebody in his IT organization. He happened to put his CTO in there. What he said was, “I want to avoid the scenario where there’s the digital conversation, and then there’s the IT conversation. There should be one conversation.” And so Dave incubated it, he got it off the ground, and then once he felt that the digital center of excellence was on firm footing, he moved on within AstraZeneca to climb other mountains.

Another thing that he did and that I’ve seen maybe CIOs of companies do, is that they take their executive committee on a field trip to Silicon Valley, where they meet with a whole host of digital vendors who are doing cool work in their field! That’s the work of a CIO in digital transformation, and those are some first steps, and it’s not easy, but what’s easy really? Those are some first steps CIOs can make to combat the past perception that IT enables and supports but does not drive, and to start getting that digital competency grounded across the enterprise.

Michael Krigsman: Yes. Dave Smoley is certainly a great CIO and innovator. Arsalan Khan on Twitter is asking how do you prioritize things like strategy, politics, education, from the CIO perspective? How do you move forward and fill that digital void, as you call it?

Martha Heller: Well, I would say the first priority is get your house in order. You know, if we think about Maslow’s Hierarchy of Needs, don’t talk to me about self-actualization before I have a roof over my head. Don’t bother having a conversation about strategy is no one’s getting their email. So, I would say, if you’re going to prioritize, the first thing you would prioritize is if you would have your basic fundamentals of IT in shape. The second piece is the team. If you have a team that can partner with a certain area of the business, and have a conversation that that business leader feels is peer-level conversation. You have that in order. The other thing I would look at is, do you have Agile development and DevOps and some other forward-looking development and delivery processes in place, and once you’ve got your house in order, it’s about making sure that you’re part of the conversations where vision and strategy are discussed. And I’ll bring up another concept now in response to our audience question.

This comes to me from Scott McKay who is the CIO of Genworth Financial. And Scott says, “In a boardroom, in an executive boardroom, around me you’ve got chairs around the table and chairs along the wall. The chairs around the table are filled with the ‘what’ executives. They decide what the company is going to spend its money on and what the company is going to do in terms of strategy. And then you’ve got the chairs around the walls, and those are the ‘how’ executives. ‘Oh, that’s the strategy? Thanks for letting me know, and here’s how we’re going to get it done.’ And CIOs have traditionally been in that ‘how’ seat, and it’s a good thing too, because ideas without execution are cheap! So, the ‘how’ executives, the CIOs spend their careers getting stuff done. Now, when IT has an opportunity not only to support business strategy but actually to inform and define it, it’s time for the CIOs to switch chairs and to get up to that ‘what’ table. Now you can’t let go of the enabling because everything has got to get done, but it’s about expanding their horizons.”

So, in terms of prioritizing, I would say get your house in order which includes your killers in your team, but after that it’s to do that gut check and make sure you’re ready to be that “what” executive. It’s a different level of peronal risk to say, “Here’s what we should do” versus how we’re going to do it. And then it’s getting into those meetings and making sure you understand the strategy. And then of course if you don’t understand the business context, don’t worry about the strategy. And then it’s just like everything else: vision becomes a strategy, strategy becomes goals, goals have timelines, and Lord knows CIOs know a lot about that.

Michael Krigsman: Martha, everything you’re saying, of course, makes perfect sense, but it also has built into it the assumption that the CIO has the business capability, the experience, the skill to take on this innovative business role, and work across silos and departments and organizations inside the company. And that can be a challenge as well.

Martha Heller: Well, that’s part of the job. You know, recently, I was giving a keynote to a large group of CIOs, and when I got to the section about being a ‘what’ executive rather than a ‘how’ executive, and doing the gut check and taking the personal risk to do strategy, a CIO stood up and said, “I don’t have the skills to do that. I like implementing. I could implement all day long.” And I said, “Great! Know yourself. Know that you like to implement, but don’t be surprised or confused or concerned when your CEO hires a Chief Digital Officer or Chief Innovation Officer.” So what I would say to those CIOs who say, “I don’t have the skills, I don’t have the business acumen, I’m happy doing what I’m doing,” keep doing it but understand that as the business becomes more technology-oriented, your role will be marginalized and new technology leaders who are not in IT are going to come on board and you’re going to have to deal with them as business partners. So, know if you don’t have the business skills or the business context and you’re ok with that, define your role accordingly. But if you want to be a digital leader, having business understanding is everything.

Here’s a great place to start. This is actually quite pragmatic and revolutionary all at the same time…Let me just finish this thought Michael… Here is a great place to start. Stop using traditional IT metrics to measure your team. Stop defining investments by 3-9’s and uptime and least-times, and start using the metrics of the business. JetBlue, for example, Eash Sundaram who was CIO of JetBlue but is now CIO and Chief Innovation Officer, he’s certainly someone who’s moved forward in this way, he no longer measures his team on any traditional IT metrics. He shares with them the metrics held by the entire airline, which is called “Departure Zero”. How many of our flights leave the gate 0 minutes after departure? He measures his team’s performance and he measures their investment priorities based on its impact on D-0. When you are measuring your team based on the same metrics that the business holds dear, guess what? You’ve got a level of business acumen that you didn’t have before, and so does your team.

Michael Krigsman: And you know, it’s a very interesting point. How common is it in today’s world that’s very much in transition?

Martha Heller: I would say, one of the biggest challenges for CIOs is letting go of a degree of traditional control that their own IT organizations have always had over technology. And when you let go of metrics such as uptime and resilience and cost, and start using business metrics, it can be very unnerving and scary for people who have not done that before. So I think that in the whole wave of companies that have been slow to adopt new technologies that have kept IT in their own silos, I would say that business metrics are a ways off. But, my book is filled with CIOs who are leading innovation in their companies, who are business leaders, and it’s become much more widespread. And I think we will see a permeation through IT organizations in all different industries of business metrics as the barometer of success rather than IT metrics. And a comment on that: when those CIOs turn around to manage their IT vendors, I’m sure they will be employing traditional IT metrics.

Michael Krigsman: We’re talking with Martha Heller who is a multi-book author and truly one of the most important influencers in the CIO community. And Martha, you have your most recent book next to you so please, hold it up for us.

Martha Heller: I do! Here it is right now!

Michael Krigsman: “Be the Business.” And Martha, let’s talk about the relationship between the CIO and these positions like CDO, Chief Digital Officer. And you explained how the CDO role comes about, which is there’s this “digital void,” as you call it, and if the CIO doesn’t step up to fill that void, the organization will hire somebody else who does. But in many organizations, that’s not even an explicit decision that happens. The organization or CEO says, “Hey, we need to get a CDO in here.” And so, what is the quote-on-quote “right relationship” between the CIO and other executives like the CDO, CMO that are all encroaching and overlapping with IT today?

Martha Heller: You know, I’m going to take a step back in answering that question and say that we have been in an industrial economy since, I would say, the very early 19th century. We’ve been in a digital economy for about five or ten minutes now. The industrial economy is all about “more assets, more plants, more real estate, bigger teams.” The industrial economy is all about building walls around companies to separate us from other companies, and building walls around our departments. The digital economy is very different. The digital economy is all about algorithms trumping teams. You can do something with an algorithm and you don’t need a team, and that is often a better way to go. It’s about leveraging partnerships and breaking down the walls between departments in a business. It’s about creating permeable boundaries so that our vendors are not held at arm’s length, but become part of our workforce. And so, the most important work for a CIO to do vis-à-vis her executive peers, as per your question, is to use an end-to-end perspectives to free executives from their traditionally-held vertical prisons so they can look up, across, out, at their digital future together. So it’s the CIO’s ability to get their peers thinking fundamentally different about their business, and I’m going to give you a great example.

So this is one of my very favorite CIOs, Kathy McElligott. She is now the CTO at McKesson, but when I interviewed her, she was the CIO at Emerson, the electronics company. So when she was CIO at Emerson, when she came on board, she said, “You know, we’re aligned, IT has a strategy that is aligned to where the business is going. However, this business is putting sensors in all of our products, we’re collecting a tremendous amount of data, which is great, but we have not crafted a business strategy that capitalizes on any of that. The very fundamentals of what we are and what we do as a business must change, based of Internet of Things and Big Data and all of that.”

And so what she did what she put together what she called the “Business-IT Strategy Board,” 25 executives across the business, and they want to meet quarterly, monthly, I don’t remember the frequency, and let’s talk about big topics. So in her first meeting, she got them all together, and then she realized they were all sitting around waiting for her to give project status updates. And she said, “That’s really not what this meeting is.” So she brought IBM in to really workshop a strategy with them, and then after that she really was able to run meetings about internet security, about Internet of Things, about, “What would happen if we put the customer at the center of everything that we did here?” Now, some of these topics had a technology bent and some did not, and that’s almost irrelevant. Her job, as CIO, vis-à-vis her executive peers, was to facilitate a conversation that allowed them to look horizontally and together at the future of the company, regardless of whether there’s a CDO or a Chief Information Officer in the mix. That’s the CIO’s most important work.

Michael Krigsman: But still, as a practical matter, the organizational boundaries and the politics in many companies start to come into play. So again, what is the right way for the CIO to interact with these peers?

Martha Heller: Well, I would say, you know, this is classic stuff, I mean I probably wrote this article in 1999 for CIO Magazine. But it’s understand your business partners’ challenge, understand in business terms; consult with them about the growth plans or challenges of their business, and then define an IT strategy to help them with that; and then oversee its delivery. I mean, that’s how you win friends. But when it comes to driving innovation, which is one of our topics here, pick a fearless executive for who you have successfully delivered in the past, who believes in you and has your back, and work with that person on something new and innovative, and use that as a test case. Once you’ve got a success there, as my friend Steve Gold, the CIO of CVS says, “Wash, rinse, and repeat.”

Michael Krigsman: So collaborate on an innovative and interesting business case with the right business partner.

Martha Heller: Absolutely, and use that almost as a marketing tool to bring in the more skeptical executives.

Michael Krigsman: That’s a really key point. Now you talked about putting the customer at the center, and how does that translate into the CIO and the CIO activities?

Martha Heller: Well, I think for a long time we looked at business opportunities from the perspective of our supply chain, or our manufacturing processes, or in terms of what makes our numbers move in order to create shareholder value. Well, now we’re in a situation where customers call the shots. Customers have a lot more flexibility in who they do business with, customers have different thoughts about the style in which they want to to business, and companies that are not acknowledging that the customer is at the center of everything that they do are going ot be spending money in the wrong places.

I would also issue a cautionary tale. Putting the customer at the center of everything you do was a strategy that Kathy McElligott at Emerson brought forth to her team. But here’s where I would have a cautionary note about that. When companies imagine the idea of digital transformation or innovation, very often they think about marketing, right, and the customer-customer engagement and marketing. “That’s our digital, that’s our technologies, that’s where we want our CIO to spend most of his or her time.” But the fact is that digital is not marketing but with social media instead of print ads. Digital is much more than that. Digital is supply chain. Digital is employee productivity. Digital is the way we engage with our partners. So, you know, while, sure, you want to put the customer at the center of everything you do, you want conceptualize digital transformation as something larger than at that point where the customer and the company meet.

Michael Krigsman: Now, we’re going through some of the strategies that you go describe in your book that CIOs should adopt to be successful, and an interesting one is you talk about storytelling, and we hear storytelling again in relation to customers, we hear storytelling associated with marketing. So when you say that the CIO should be a storyteller, tell us what you mean by that.

Martha Heller: Sure. So ever since we were little, we loved to hear a story, right? And for those of us who have children, you know exactly which books have the pages falling out of them because we have to read the story so many times. And stories are a great way for two people of different backgrounds to get to a common ground on something abstract, and CIOs are always in a position of having to get to common ground on something abstract. So, I’ll just give you a quick example. Malini Balakrishnan, when I spoke to her, she was the CIO of a construction company, and when she got there, she said, “We have such old technology, we’re having outages left and right, and what we need is an ERP.” So she went to the team and said, “We need an ERP” and the CFO said, and this is a verbatim quote, “You will pry the old system out of my cold, dead hands.” So she thought, “Ok, I need another approach.” So she came up with the idea of taking a clip from the movie “Speed,” and in that clip, Keanu Reeves is a detective and he’s on a bus that’s got a bomb on it that will explode if it goes less than 50 miles per hour. So he has the idea of bringing another bus onto the highway, got to keep both of them going at 50 miles per hour, and everybody from the one bus has to walk across a rickety scary plank on the speeding buses from one bus to the other. So, she presented that clip to the executive committee and said, “This is our ERP situation. We’ve got to get a new bus ready while the old bus is running and everybody’s got to walk from one bus to the other.” And once she was able to show that clip, she was able to get them to the point of understanding the need for an ERP, and of course, people mentioned that story to others, so she had people carrying that story forward for her, where if she had shown an architectural schematic of the legacy systems overlaid with the ERP, she would not have had as much of an understanding of what was needed to move forward within the company. So that’s just an example. She didn’t have to come up with the story herself. She found something great that everybody could relate to, that’s a great way to get executives on the same page, at least initially, in moving forward.

Michael Krigsman: So the issue here is communicating in a manner that the business will find compelling, particularly that the business will find relevant and meaningful to their situation and that will push the business, therefore, to make the change that you as the CIO want to be made.

Martha Heller: Absolutely! I’ll give you one more example, and this was the CIO of a large pharmaceutical company who said he was having trouble getting his fellow executives to understand the multiple roles that IT plays. So he hired a photographer to take an aerial view of a three lane highway. In the highway you had one lane, motorcycles, in another lane, taxi cabs, and in another lane, big 18-wheelers. And he said the 18-wheelers are our global processes and our global technologies, we’re not creating change there, don’t even bother asking us to change that, that’s solid. The taxis are the more localized solutions for different regions that need something more specialized, and the motorcycles are pockets of innovation, new, cool stuff we’re doing, and with time, the motorcycles become taxis and the taxis become trucks. But he said, after he walked out of that meeting, having shown that aerial view, he saw the light in the eyes of his executive committee. So a story doesn’t have to be a fable. It can be a photograph, it can be a pie chart, but it needs to be designed to expressly communicate something abstract to a variety of audiences.

Michael Krigsman: So relevance is at the heart here, and we hear about relevance and the CIO. So let’s talk about factors that make a CIO relevant to the business.

Martha Heller: I love that question because I have a great answer for it. And this comes to me from the CIO of GE, because you know, Michael, I have no original thought, all I do is take the good thoughts of CIOs and put them together in a palatable form. But what Jim Fowler, the CIO of GE is concerned about is the relevance of CIOs and the relevance of IT and he says that, “We have a generation of workers graduating from college and coming into our businesses, and they are self-helpers. They want to create their own algorithms, their own digital tools, and they don’t want to wait around for IT. So for IT to stay relevant, it has to find a way to embrace that innovation, and be a catalyst for that innovation.”

So I’ll bring up the concept of “shadow IT” for a second. When I think about that old-school style of IT saying, “No shadow IT on my watch! No business executive is going to go out and buy their own technology and damage my architectural integrity, and introduce security risk and cost challenges into my infrastructure,” I imagine a man alone on the beach with his hand up, and a tsunami is coming over the beach. Well, that CIO can go ahead and put another hand up, but it’s not going to stop the rise of workers who want to be much more powered with the ability to create their own technology solutions. So Rob Lux is the CIO of Freddie Mac, and when he joined Freddie Mac, there were a lot of concerns about end-user computing, that is business leaders who hired their own development shops to create their own applications. Well that’s all well and good until those applications become mission-critical and have performance problems, and then they call IT to say, “Hey,” and the phrase they use is “productionalize,” “Can you productionalize?” And IT would say, “Boy, it would have been nice if you had involved us a little bit earlier.” So rather than clamping down on EUC’s, or End-User Computing, Rob created a development platform to allow end-users to go crazy! Develop your own tools, but do it in a secure environment using these tools. So a real concept here that I want to get across is, it’s one thing to say to IT, “Be the business,” but another thing we’re really saying is, “Let the business be IT.” IT does not own IT innovation, and delivery investment decisions and adoption, or even development! If end-users want to develop, they’re going to develop. Let them do it. So give them the platforms to do that. So that is being a catalyst and staying relevant, rather than saying, “Yeah, I’ve got to wait for IT.” That’s a perfect way for CIOs to become obsolete.

Michael Krigsman: We have about five minutes left. So it seems that the core of what you’re saying is that the successful CIOs are finding ways to engage the users, not put up boundaries, but invite the users in.

Martha Heller: That’s exactly right! So what we’re starting to see, and I’m glad you mentioned we only have five minutes because, you know, I could go on all day long. But, I want to bring up an important concept, and I’m seeing CIOs replace titles in their organizations, of, you know, this is an applications manager. This person has responsibility for all the technologies. And instead, they’re starting to talk about product management. Whether that product is something that will hit the external market, or whether that product is a finance system that’s for internal use only. And so what we’re starting to see on these product teams are cross-functional teams, so marketing, business analysts, business development, IT. You know within IT you’ve got apps and ops and architecture all on these same teams. And in fact Jim Fowler, CIO of GE, calls it a “teams of teams” structure. So when you conceptualize email as a product, or ERP as a product, suddenly you realize, on that product team, you can’t only have people from IT on that team, you need end-user representatives on that team. Product teams blur the boundaries between what is IT, and what belongs to the, quote, “business” that IT serves. So that product management, and one of the chapters in my book is called “Think Product” because as software makes its way into most companies’ products, where does IT development stop, and product development start? That is a blurry line that product leaders and CIOs need to start figuring out, because that is where a lot of innovation can happen.

Michael Krigsman: So we have just two or three minutes left, Martha, and would you summarize the distilled essence of your advice to CIOs. What’s the bottom line here? What’s most important?

Martha Heller: I would say that what’s most important is that 1) CIOs start to conceptualize their role in the organization, and this comes to me by the way from Cole Chapman, the CIO of the Gap; “As an internal professional services firm, that professional services firm provides information security, software development, product development, management consulting, email, data center hosting, vendor management, and once you see yourself as the CEO of a professional services firm, providing all these services out to the business, suddenly those boundaries in organizational design is all going to become clear to you. So that’s one. 2) Let go of control. Not everybody who uses the tools of finance in a company report into the CFO. Not everybody who considers themselves a developer needs to report into IT. Let your people go. Get into the digital mindset where empire-building is out. It’s about collaboration, blurring boundaries, letting go of control. And here’s the critical one: 3) Despite the fact that you run an organization, CIO, that is not your primary role. Your primary role is to use your end-to-end view and all of your analytical tools that demonstrate what is going on in the enterprise and become the critical capabilities champion of your company. Let your executive peers know what your company is good at, where it needs improvement, and that is where they should be spending their precious investment dollars. That’s your job.

Michael Krigsman: Wow, well, Martha Heller has given us a textbook on how to be a CIO. And there it is! You’re holding up the book, Martha’s most recent book, and what an amazing show this has been! You’ve been watching Episode number 198 of CXOTalk, with Martha Heller. And if you’re a CIO, catch the replay. Go back to the CXOTalk site, there will be a transcript up in a few days, and you can read it, and there’s your textbook. Martha, thank you for joining us today!

Martha Heller: It was my pleasure, Michael. Thank you.

Michael Krigsman: And I hope you’ll come back and you’ll do it again another time.

Martha Heller: Are you free tomorrow?

Michael Krigsman: [laughter] Next week would be good! Everybody, thanks so much for watching. Come back next week, we have two shows, they’re both going to be great, I’ll see you soon. Thanks, bye-bye.

Published Date: Jul 11, 2015

Author: Michael Krigsman

Episode ID: 387