The Most Important Leadership Quality

Is there one? There are innumerable books, masses of research, and a plethora of answers telling us about the hallmarks of successful leaders. I love Adam Bryant’s 5: passionate curiosity, battle-hardened confidence, team smarts, simple mindset and fearlessness.

Here are some other qualities you will see as you comb the web: honesty, communication, delegation, humor, confidence, commitment, creativity, intuition, inspirational, positive, motivational, persuasive, persistent, patient, organized, flexible, people oriented, IQ, EQ etc. there seems to be no end!

But is there something that underpins all this? Is there a single thing that provides a foundation for all the rest? Here is what I think. AUTHENTICITY.

To be authentic you must have grown as a person, made your own mistakes, had your own successes – and be open and candid with others about who you are. You must understand your own journey and be comfortable with your own strengths and weaknesses.

I am a head hunter and for me, determining if a leader is authentic, is the main thing. Testing for technical capability and particular skill can be relatively straight forward. You have done it, have the education, or work in a company with a reputation for being good at it; we can read it in your resume. But what about how you function – those qualities listed above – is that really you, or are you wearing a mask?

Getting a candidate to take off the mask and show who he or she really is – that is what all good head hunter’s strive to do. And mostly it’s about blood. Blood or scar tissue. I often ask candidates to talk about both successes and failures. Successes are great, but if you have never failed – you probably never took on big challenges where you really needed to step up and learn – not only about the task, but more importantly about yourself. I want someone to reflect on their own growth and development and to have an appreciation of self, such that they can be authentic with others. People get to know if you are genuine or authentic – either very quickly, or over time. And if you want to be able to exercise all those traits mentioned above I believe that you need to be authentic.

Advice: Take on all the challenges you can; stretch assignments, overseas gig’s, management tasks outside your specialty, the stuff others are scared of. Push to see who you are, be self-reflective and humble, and you will develop an authenticity that will set you apart.

What is The Purpose of Every Company?

Shaking Hands 1

My simple definition is this: To Find and Keep Customers.

Why is this relevant?

If you are part of senior leadership (SLT) and you don’t know where you fit in this definition, you are not adding value, and you are not relevant.

I am a head hunter and focus on CIO’s and the companies that sell to them. The role of the CIO is changing from “leverage” (the bottom line) to “customer” (the top line).

If your job as CIO is not deeply involved in “finding and keeping customers” – do something quick, because you are not relevant right now.

If you are a CIO and don’t want to be irrelevant here are some tips:

  1. Make sure the leverage stuff works. If the base systems aren’t functioning, you won’t have credibility and no one will listen to you.
  2. Know the business. If I eavesdropped a SLT meeting would I peg you immediately as the CIO? What I should be hearing is a thoughtful and engaged business executive talking about the “art of the possible”. Contributing on all issues; deeply knowledgeable about IT.
  3. Don’t be boring. Too many CIO’s look and act like geeks. Don’t drone on about technical stuff – it just puts everyone to sleep. If you want to influence the SLT and Board – be compelling.
  4. Be a talent magnet – which presupposes strong leadership (more on this in another blog).
  5. Learn all the time. Be curious, connect dots, connect with people, etc.
  6. Be authentic. This is for everyone (I will unpack this in another posting).
  7. There are other factors – but I am trying to be brief – and not boring!

There is no better time for CIO’s to be involved in “finding and keeping customers”. The technology is there, and senior leaders want your contribution.

PWC says that CEO’s are concerned about 5 things: Security, Mobility, Analytics, Cloud and IoT. If you can’t find something in there to help your organization find and keep customers – perhaps you should rethink your own purpose.

Why Aren’t There More CIO’s On Boards?

PWC put out a study in 2014 to say that the top 5 things that keep CEO’s awake at night are: Security, Mobility, Analytics, Cloud and IoT (Internet of Things). They are all technology related, and yet if you look at Boards, you find few CIO’s. What’s going on?

Don’t get me wrong – there are CIO’s on Boards. Our firm has been involved in a number of searches where forward thinking CEO’s and Nominating Committees have taken action. Hats off to them. But why isn’t everyone doing it? Security is a key topic in the Boardroom, and every CIO I know is spending more and more time with their Boards, talking about what the company is doing. Hiring a great CIO is definitely part of the solution, but having a CIO on the Board is the next logical step.

Companies increasingly acknowledge that they are technology businesses. Early on FedEx realized this – the data about the package are as important as the package. A CIO I know said – “we are a technology company with wings”; an insurance CIO said “we are a database and software company operating in the insurance space”. Technology is increasingly at the core of the purpose of organizations. I have a simple definition of the universal company purpose – “to find and keep customers”. CIO’s used to be “leverage” – harmonization, standardization, cost reduction, but now they are “top line”. And if they are thinking top line, then my contention is that any major corporation needs to have a top caliber CIO on its Board.

In one organization where we placed a CIO on the Board, the CIO of that organization said to me “I am nervous about having someone who really knows IT at the Board level. My life may become miserable!” but a year later she said “it is the best thing that has happened to our company. I now have someone on the Board who understands how technology can enable, and helps me explain the technology journey, but with the credibility of an insider on the Board team”.

Reboot IT

This blog is a summary of thought from a CIO group that I have the privilege of moderating. They are the top CIOs in the Bay Area – so this is relevant. Not sure I agree with everything, but it is thought provoking.

Why Reboot IT? There are many reasons – here are a few:

  • Outsourcing is broken. It doesn’t reduce cost much, but does reduce flexibility, innovation and accountability.
  • Integration and customization = huge complexity, and you can’t introduce cool new stuff to meet the business needs because you are in the land of Lilliput.
  • Waterfall methodologies are arcane.  Slow, costly, etc.
  • It’s really hard to measure value.  Conversations around IT are often directed toward cost-saving, whereas they should include deep discussions around revenue generation as well – see my IT Benchmarking blog (published 9/13/13).

So – what’s a CIO to do?

The simple answer is that the IT department must be just like a technology company with products.  The head of development is like the VP Engineering, and should be supported by Product Managers who are responsible for the various offerings (Think as if you are Workday, Salesforce, etc., building commercial products – for internal use).

Technology Choices:

Build with the Cloud in mind, Web scale resilient apps, open source, embrace mobility (the form factor of a PDA screen requires a different development approach to apps delivered on PC and Mac/iPad), build everything scalable, and embrace choice.

How should you run IT?

  • Agile, self-directed project teams of 6 – 12 including product, technical and iteration management and developers.
  • Create product and service lines.
    • E.g., a product could be a CRM platform that would be charged to the business and handled like any other product.
    • Help desk would be a service – measured by cost and value (customer satisfaction).
    • Follow agile and/or scrum-based software development methodology for both custom and off- the-shelf development.
    • Follow product lifecycle – eliminate less used products.

 IT Department – Principals

  • Flat hierarchy: 8 – 15 directs with teams being self-directed.
  • Hire engineers capable of building products for commercial use.
  • Managers should have a combination of skills: leadership, business, and Technical.

What should an IT organization look like?

  1. Shared services group comprising IT:  infrastructure, security.
  2. Office of the CIO: focus on metrics, portfolio management, communication, finance.
  3. IT Operations: Problem, Change, Incident and Release management. First and second level support, NOC, Help Desk.
  4. Product Management. Strong business relationships, understand customer demand and translate into features/initiatives.
  5. IT Development. Services-based platform development of the products tied to capabilities, continuous delivery and deployment, modern tools, develop in-house capability (muscle memory).

What should you measure?

  • In a word – everything, with the objective of tying business capability enabled, to the benefits realized.
  • Build a big data store and capture logs, telemetry, capacity data, metrics, adoption data, incident management data, financials, etc.
  • Build BI on top so decisions are increasingly based on data, e.g., – products should have telemetry and adoption logging so you can see which features are being used and how.
  • Business pays for products and services delivered by IT on a usage/consumption based model. If product is not used, reduce support and then scrap.  This forces IT to be cost and value conscious so it can compete with SaaS products.

IT Benchmarking

Is IT benchmarking total garbage?

IT is often benchmarked – on cost, performance, strategy, all kinds of stuff – but why?  Ostensibly, it is to know where IT stacks up, justify a budget, increase a budget or cut a budget. You can benchmark almost anything. But what underlies the urge to benchmark?  Here are some thoughts on the subject, gleaned largely from the ideas of members of a CIO Forum that I have moderated for the past eight years in the Bay Area.

Business leaders have external pressures – mostly exerted by market forces. They have to deliver a decent product/service at a competitive price or they simply won’t “find” or “keep” customers (see Blog Archive: Driving the Bottom Line posted 5/30/13).  Their feet are regularly toasted at the fire of stiff competition.

When benchmarking comes up at the request of business leaders it is usually their attempt to hold IT’s feet to the fire.  They want a lever that will drive IT, something like the market levers they experience. Benchmarking is an easy sell, and the IT consulting firms play to this by hyping what benchmarking can do.  Well, the truth is, benchmarking will do whatever you want it to do – or whatever the person paying for the benchmarking wants it to do.  No two companies or industries are alike, so you are never going to get apples with apples. Cynical, but reality!  IT shops that are in exactly the same industry, but have different legacy systems, can be at totally different places when it comes to business initiatives.  One can be in SOA heaven, the other in the land of Lilliput – where Gulliver was held down by a million tiny wires.

And what’s more, if you look at IT’s performance/value per dollar invested, it typically far exceeds the value from investments in other parts of the business.  Consider this, does Marketing or Manufacturing have ROIs like IT, or can they cut costs and improve performance like IT?  Not often.  If you have business customers who are demanding a benchmark – there is probably something else going on.

So, before your organization embarks on a pointless, costly, in-fight producing, overly broad or irrelevantly narrow, inaccurate, and immaterial benchmarking activity, take a step back and try to figure out what is really driving the “urge to benchmark”.

The Answer:

  • Figure out what levers you can give your business partners so they feel they have some control. (More on this in a later Blog – Consumerization or “I want” IT is already in the front room).
  • Be more strategic – lead the charge. See Blog Archive: Driving the Bottom Line posted 5/30/13.
  • Report your historic performance.
  • Keep your own benchmarks, so you can trot those out regularly.
  • Be totally transparent.

Traits of Successful CIOs

There has been so much written on this topic that it’s hard to come up with anything “new”. Well, as far as leadership is concerned, there is not a lot of “new”. It’s about people, and leaders going back to Hannibal have exhibited many of the same traits – here is my view of those traits that set leaders apart. It is based on the search work I have done and leaders I have met, my experience over 10 years as a CEO, and some good stuff I have read. Great CIO’s typically:

  • Possess an Integrative mind. A CIO who can see and connect the dots.
  • Are Life-long learners. This factor is seen as the strongest predictor of success across any industry. These first two factors often accompany someone who has been successful in many environments and has a globally diverse experience base. The right candidate will understand the requirement of modifying behavior to achieve impact in differing market settings and cultures.
  • Create a compelling vision, focus the organization around that vision, and execute on it. Great communication skill goes hand in hand with this.
  • Build and motivate teams. Top CIOs are able to attract top talent and challenge them to perform at exceptional levels.  The most successful teams are often cross-functional and multi-cultural, and the leader is able to capture the collective intelligence of the organization in solving business problems. A buzz phrase here would be ‘encourage the heart’.
  • Drive a customer focused/game-changing project. Successful CIOs have typically been responsible for a major game changing corporate initiative. Sometimes they are lucky to be in the right place at the right time, but often the CIO has seen an opportunity to add value, and seized it. The Haas School of Business Renaissance CIO project identified a number of transformational CIOs who had enduring impact through key undertakings such as Dawn Lapore – online trading at Schwab; Max Hopper – Sabre online air reservation system; Rob Carter – online shipment tracking at FedEx. For current CIOs, opportunities exist to have big organizational impact with the emergence of technologies such as:
    • Cloud (SaaS, PaaS and IaaS).
    • Social (e.g., crowdsourcing for helpdesk and product development).
    • Mobile. Delivering organizational capability and products in a mobile world.
    • Big Data and Small Data (analytics for zero unplanned maintenance, product innovation, business performance improvement).
    • Consumerization and BYOD.  (Flexibility, customer satisfaction and cost management).
  • Develop a deep knowledge of the business.  This often drives candidate selection toward industry insiders.  However, there are notable successes where candidates from different industries have had enormous and enduring impact. I placed Phil Fasano at Kaiser Permanente. He came from Financial Services and brought organizational change skills and forward-thinking capability that have made him a standout leader. He has now been at Kaiser for six years, and not only has he revolutionized the way KP does business, but he is also having impact on a global scale. Phil recently published a book entitled “Transforming Healthcare, the Financial Impact of Technology, Electronic Tools and Data Mining”. Not bad for a guy who used to worry about your credit card balances!
  • Have strong influencing capability.   Top quality CIOs understand that they need to deliver a functional operating platform, but as important is their ability to work with business unit heads to help drive value.  A CIO must understand operational goals, and explain how technology can either enable or improve business outcomes. He or she can then push to the front of the bus and help with revenue generation activity.
  • Are trusting and trustworthy.  A capable CIO must develop strong relationships across the business.  We have found that leaders who have a strong EQ (emotional intelligence), and are principled in approach, have enduring impact.

Driving the Bottom Line

Tying into my “No Better Time” Blog (posted 5/14/13) addressing the top line, this Blog will focus on the bottom line.

How IT leaders drive the bottom line:

Another way to say this is how does the CIO get leverage from what he or she does? There is leverage from scale, and from being more efficient in the way the business is done (process harmonization).

Here are some thoughts on what to focus on as you leverage IT for bottom line management:

  • Keep the lights on. Sorry to start with this, but if you don’t offer a great service to the organization you won’t be taken seriously at the top. Your stuff has to work – all the time.
  • Get sourcing right. Negotiate effectively with vendors. I have seen a lot of contracts go wrong because CIOs were too hard on vendors. Vendors can really help. Let them make a fair buck.
  • Analyze IT demand and build a plan that delivers the capacity you need without getting trapped in technology dead ends. Cloud now offers amazing opportunities to manage this equation and deal with spike demand.
  • Get your IT standards in place. This is often about architecture and balancing control with innovation.
  • BYOD. May not save you as much as you expect, but the plain truth is that Consumerization is an opportunity that CIOs need to embrace. And let’s face it; the consumer-oriented products are way cooler than what the enterprise offers!
  • Harmonize process. There are great opportunities when a new platform is installed to harmonize business process and reap organizational efficiency. The CIO can be a major player in getting this right.
  • Embrace the Cloud. Cloud offerings in applications, infrastructure and platforms can have an enormous impact on an organization. Figure out what is suitable and make it happen; you can free up $ in base cost and offer some really cool stuff.
  • IT Governance. It is important, and will catch you out if not done right. Get the right level of business participation, have decent portfolio management – so the IT spend is understood and committed to, and then execute well.
  • Security. Increasingly important with Cloud, Consumerization, Social and Mobile. There are just so many more ways the bad guys can infiltrate. This keeps the CEO up at night, and if you get it wrong, you are out of a job!

There is, however, a balancing act that the CIO needs to understand that hinges around centralization vs. decentralization. Some IT shops want everything centralized for maximum security, cost management and control, but business users typically want IT decentralized for increased speed and flexibility. What’s a CIO to do? Sorry, there is no simple answer here. It all depends.

Randy Spratt at McKesson has a great perspective on this and here is what he is doing:

For the top line stuff – growing revenue – he has adopted a more decentralized strategy. So the new products and new markets initiatives that I referred to are very decentralized, then as those new products are adopted into the organization there is more control. This ensures that customer satisfaction and experience standards are met. When the products become more mainstream, they are standardized for process and operational efficiency and finally, when the products are commodities, the focus moves toward bottom line cost management. It’s a great way to think about lifecycles.

You probably don’t have Randy’s scale and scope so his example may not fit, but the positioning of your IT department on the continuum of “total control” to “anything goes” needs to be thought through carefully. The lesson to take from Randy is this – the centralization versus decentralization challenge is not uniform across an organization, its products and processes. You need to decide what approach makes the most strategic sense for your company right now.

Kim Stephenson of Intel has a really interesting quote around this – she says “there are no IT projects – only business projects”. This is a great mantra, and key to understanding your role as CIO. You are there to add business value.