Chapter 1: The new CIO
A CEO can chose the management team, propose it to the board and eventually adjust this proposal. He
chooses the CIO, not primarily because he has a lot of background in information technology, but because he
has a lot of ideas on how IT should be run and he is a great manager. A huge part of the organizational change
will be IT.
IT management is about management. More than any other group within a company, IT is positioned to
understand the business end-to-end, across departmental boundaries. No other department interacts with as
many different parts of the business as IT. This says that IT people have an advantage in gaining a deep
understanding of the business: it does not mean they do a good job in seizing that advantage.
The usual state of affairs in IT management situations can be shown as business knowledge (“smarts” in the
diagram) and technical knowledge having no overlap, but needing to be pushed together (pg. 13). The top
responsibilities of the IT manager would be to take actions that pushed the two circles closer together. This
way of thinking about the problem suggests that communication issues are a big deal. Business people and
technology people should share more knowledge, more understanding, so they end up better able to
communicate with each other. The people able to operate in the area of overlap where “Value” was created
were a resource to be hired (business-savvy guys in the IT department or tech-savvy people from business
units).
There is a IT leader/general manager capability gap (pg. 14). At the top of the “Executives” hill, you understand
the company’s general management, business strategy, and operations issues. Moving over to the IT leaders
needs understanding of IT strategy, and operations. This valley can be spanned from either direction. It might
be a bit easier as a career business leader to acquire enough understanding of technology, than the other way
around. Technical knowledge – as much as you need to know as an IT leader – is relatively explicit and
learnable, whereas lot of the understanding that made managers effective is tacit (mastery of relationships,
understanding of political factors, and so on).
The IT leader’s job can be historically described as ‘a roller coaster ride’: expansion of the commercial internet
(1990s) elevated the status of IT workers, but it peaked in March 2000 and began a relentless descent (the dot-
com explosion). IT work went from awesome to uncool and IT was sent back to the IT basement. This
downtrend bottomed out around 2002 or 2003, when the status of the IT function started back on an upswing,
until the financial crisis of 2008 hit and another recovery was made after that.
During the upcycles, IT departments landed bigger budgets and IT employees served as crucial consultants to
their business-area partners. In a downcycle, all this would change. IT projects launched during good years
became sources of unacceptable cost, because service demand had vanished now. IT investments tend to occur
in “chunks”, so projects often could not be easily switched of mid-execution, so they stumbled with costs over
budget and benefits undershooting expectations. Projects were canceled, declared total losses. Discussing bold
IT-enabled futures were no longer in the mood: the harsh realities that descended on IT managers put them
into basic survival mode, amusingly labeled as hunt, kill, eat. They needed to focus on cost savings, and few
new applications are developed, making the IT organization reactive.
So we can state: IT leaders need to possess a special kind of ambidexterity – to be effective in good and bad
times. Even in down cycles, superior technical features can be important though.
IT managers need to understand and demonstrate to others that the need for shrewd IT management does not
vanish when over-hyped technologies do. This is because the fundamentals of IT management (just as in
finance or marketing) remain relatively stable at its core, it is not transitory.
Chapter 2: CIO challenges
“You’ve got to know what you don’t know”, means to know the things you know, and know what you don’t
know. There are some categories of things you know, and some things that you don’t: you have to know what
,is in which category. As a manager it’s important to figure out who in your team is really good, but lots of (IT)
managers never really know that – for IT managers because they often don’t know the ‘techie stuff’. They don’t
know what they don’t know, which makes them do stupid things, like putting people on the wrong projects or
rewarding dolts and underappreciate geniuses.
The first (logical) thing to do as a new CIO is to have a meeting with your direct reports, discussing the current
status of the activities within their areas, the challenges that needed to be met in the coming months, and
opportunities to create value for the company. Using the current situation as a basis, you can then work
together to construct a future vision for the role of IT in the business. Next to this, it could be interesting to
look at the financial information that pertained to IT budgets and expenditures.
Although you have to be careful about whether the way very different kinds of companies used IT would be
relevant to your company, you could be meeting the CIOs of other companies to share how they thought about
their jobs. You’ll need to have a relationship with these people by meeting multiple times, because in one
meeting, you will probably only discuss the surface-level stuff. The most valuable guidance will come in time,
not right away. Next to this, meeting industry folks, analysts, people who work for IT-vendors, maybe some
industry movers and shakers, people who are involved as investors or who have other reasons to keep track of
where things are headed in the IT industry.
See notes on “The IT Manager as a Business Leader” on pg. 37.
- What is NOT the first thing a newly-appointed CIO should do during the first week?
- What is a result of CIO not knowing what he/she does not know?
- As a CIO, you need a network of knowledgeable people around you. Match what knowledge you want
to get from each group.
- Which barrier prevent IT managers from becoming business leaders the most?
Chapter 3: CIO leadership
Monday morning: a meeting with the people who reported to the CIO (the operating manager). They exchange
greetings, and submitted brief status reports, when the CIO floated his idea of an off-site management meeting
to set the direction for the department. Direct reports doubt of this is doable with ‘the five of us alone’.
A supervisor’s job is to encourage employees to engage in appropriate actions, habits, and behaviors, and to
direct changes in those actions, habits, and behaviors when business conditions shift in ways that necessitate
such changes.
How could the direct results supervise if they couldn’t even hold a management conversation without
consulting technical specialists (sidekicks)? Because IT is different. No IT manager can do the job of anyone in
the IT department (whereas a general manager, you can). Technology moves fast and you can’t keep track of
the specialists and the way they program now. You get the gist of it, but details leave you in the dust. More
than anywhere, the details matter in IT. We can’t keep up with the technical stuff, so we depend on sidekicks
to help us tease apart business and technical issues, and to put dimensions on trade-offs.
In the IT department, there are groups that perform mostly staff functions (1): process improvement,
identifying new IT approaches, and so forth. The ‘database group’ (2) makes sure there are robust database
designs underlying all of our systems, and is developing new business analytics capabilities. The group focusing
on infrastructure and vendor offerings (3) make sure that as new vendor products and services appear (a new
computer or portable device, a new service offering proposed as replacement for the old one, and so forth),
they all work within the existing architecture. Support customer service systems (4) focus on the corresponding
customer service-oriented business unit as a business applications systems group. This is done for the
department ‘Loan Ops’ as well (5). The last group is Infrastructure Management (6), making sure we can
, depend on more and more systems from out in the cloud, but also keep an eye out for the oldest systems to
work.
Knowing who your key people are and being able to supervise them and know what they are doing requires
management skill and talent. A general idea of what all the IT is about is generally enough to manage this.
