“You want to give the new person a head,” he explains. “You don’t want to be seen as a person looking over everything.”
When this happens, the contact with the ICT department goes into a different level. “You can’t delink with what is happening in the business with what is happening in IT,” he says. “But it is important not to meddle. One of the ways I tried to do that, and to varying degrees of effectiveness, was by saying to my new team we are not going to IT until we know what the problem is ourselves.”
Baker is in charge of Project Keystone, a company-wide initiative at Foodstuffs set to deliver a series of integrated processes and systems covering all facets of production and price management around the company’s three major retail brands PaknSave, New World and Four Square. Before this he was general manager — retail sales and performance, which was essentially the chief operating officer.
So what did he learn from the transition through the different roles?
Baker says the skills of an effective CIO are very transferrable. “A good CIO needs a similar set of skills to any general manager, but you have to have a good commercial background, understand profit and loss, business cases, net value and that sort of thing. You have got to be very good at change management and very strong at systems thinking.
“These are very effective in distilling non-information issues and quickly coming to potential options.” He says having these skills has made his move to the general management role much easier.
He says that as CIO, he had managed a cost centre and had always done some degree of internal charging. He has also worked on cash management.
While working with the dairy industry, he decided to get an MBA from Massey University, which he finished in two-and-a-half years. It was a full-on schedule because at that time his employer was in the midst of a merger and launching Fencepost.com, of which he was the CIO.
Another lesson he learned is that the rate of change is slower compared to that of being CIO. He says that as a CIO you span the entire business, meaning that you are working across the change programme for all divisions. When you have your own line of business division, the rate comes down, as you’re dealing with a reduced breadth of business.
In addition, the rate of change in technology, solutions and providers within general business is much slower than in the IT sector. The same process you adopt at a project level for implementing changes, is what you must adopt at a line of business level, he states.
Baker also says one must not assume your staff have the same end-to-end understanding of the business as the analysts or project managers you worked with as CIO.
“When you are in IT you are seeing right from the purchase order from inventory to sales, so you know how one affects the other. Whereas in a function, people only see their part of the business and they may not see the total business. You need to make sure that you spend time in assessing people’s understanding and bringing them along with you and say ‘The reason we are looking at this is because if you get it wrong the person down the track will be affected’.”
On the front line
An adjustment for a CIO moving to general management is being in the front line more often. “As a CIO you have a shared responsibility. When you become a line of business unit head you are the face of the business, and the media and the public are more interested in what you are doing, so you are the front line of that, sometimes daily,” says Baker.
In fact, he says, this increase in external communication — the media, suppliers and customers in general — was his biggest challenge.
As CIO, he used to take 10 to 20 calls from the media and public a year. When he became a general manager, this was the same number of calls he will take in a week. “There was no downtime from the job in the proper sense that my phone was always on. I will take calls Christmas eve. That is fine and that is part of the job,” says Baker, who has been asked to comment on a range of issues such as the sale of liquor and fireworks, to ways to combat obesity.
Surprisingly, the strike at competitor Progressive Enterprises just a few months after he became general manager of retail did not figure high in his list of challenging experiences.
He proudly points out Foodstuffs was able to cope with the increased demand on the business. “Our supply chain guys worked fantastically, our stores worked fantastically, it was great,” he says. “We had two Christmases in one year [in terms of customer demand] and we held on to a large number of those customers.”
Evolutionary approach to change
Three years ago at the CIO Conference, when Baker shared his experiences in working from ICT to the line of business role, he had cautioned against what he calls the “big bang” approach to change management. He remains steadfast in this belief.
“You break things, you break people and organisations,” he explains. “I don’t think now, certainly nowadays, you can afford the risk of a big bang.”
He says this belief does not stem from personal experience. “My aversion comes about through seeing in case studies of mergers the things that go horribly wrong. There are so many examples where people try to change brands overnight and it hasn’t worked,” he says, citing the contrasting experiences of two other companies. The one that went for the big bang approach towards expansion failed, while the other, having failed in a similar overseas expansion, took on a “nice and slow” approach the second time around.
Another lesson he has learned from his years in the business is that end users should own the cost benefits from the project. “With the focus on cost at the moment, CIOs should be very careful that projects have a business sponsor and the business sponsor is the sponsor for the cost, not the IT person.”
Baker says in most organisations, what is usually called an IT project is not an IT project. “There are very few IT projects,” he says, “as anytime it affects the user it is not an IT project, it is a business project.”
Baker also has a pragmatic view on technology investments, as he calls on the need to “sweat the existing assets”.
He believes that if an organisation with software that is five to 10 years old that does not need to be replaced, it does not have to be replaced. “You could spend $10 million replacing your current system with the best of breed or integrated package or you could just spend $400,000 to $500,000 a year and not incur the project cost and the ongoing maintenance for the upgrades,” he says.
“I use the analogy of a supermarket, every retailer has a number of old supermarkets. You are never going to have all your supermarkets [be the] newest and best one. [But] that doesn’t mean you close them or stop them from trading.
“Every supermarket upgrade has to stand on its own merits in terms of brand and sales … if you don’t upgrade, you would lose sales, but you don’t replace a supermarket every 10 years. So why would people want to replace their software? We call them legacies, we have a lot of legacy supermarkets. We have 4Square stores, but they are still serving the community.
“Unless your business processes are going to change, why are you investing in new technologies? It is time to sweat the assets.”
He says ICT should also take a good look at ICT productivity and maintenance agreements. “Take the time, fix some of the common things up and move them to creating value.”
An actively acquiring mind
Baker says he tries to find something new to do every five to seven years. That has been a pattern of his career since he started working as an information systems auditor and strategy advisor at Telecom Cook Islands. He had also worked at Lowe Walker and Open Technology, prior to moving to the dairy industry and then retail.
As such, this month, he is moving to a new role as business consultant at MIH. This stands for ‘Make IT Happen’, a company he set up in 2001 after leaving Kiwi Co-operative Dairies, where he was the chief technology officer. He also wants to spend more time with his family.
For the next two years he wants to be “just working alongside businesses”.
“I can never see myself not working for businesses,” he says, although he finds himself looking at a different arena now. “It is really to help business and people I work with take their reports and their good ideas and turn them into reality.”
“When companies get reports done by consultants, there are lots of good ideas, but [they are] not quite sure how to remove the roadblocks or get traction on some of them.”
He is already utilising his skills as a volunteer for two not-for-profit groups. The first is the IHC, an organisation that helps the intellectually disabled, and another community group which he requests not be identified. Baker was a volunteer for about 12 years at IHC, where his mother used to work. “I just thought it is time to get a bit more balance,” he says.
He is looking at working at different sectors, like manufacturing, retail, education and health. “What are the things they need to focus on?” he says.
To this, he applies his background in the hard sciences, mainly chemistry. “One of the key skills which came out of my science background is to distil a lot of information quickly and go where this seems to be the cusp of an issue.
“It is how you observe and test,” he says.
CIOs have a “truckload of skills” that can take them to several areas of the business, says Baker. “The thing is to be as broad and interested as possible.
“If you look at IT, you get to see the whole of the business and the whole of technology that supports the business end-to-end. That is what I mean by being as interested in the business as possible.
“Be articulate in the area, finance or logistics or the total value chain, be interested in everything,” he continues. “You never know where the next question is going to take you.
“Some people call it ‘keeping an open mind’. I think it is more than that because you are actively inquiring,” he says. “The reality is in professional and personal life today you never know what is going to pop up.”
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