A shift from CIO to CEO is relatively unusual, but Ratcliffe emphasises it was not an abrupt change of roles. He has an extensive background in various aspects of business both within and outside Telecom. This ranges from running a small software company, to working as a consultant for Ernst & Young, to responsibility for what is now called the wired business of Telecom.
“I regard myself as a generalist but with better IT skills than your average generalist. I became a CIO by accident,” he says. “I don’t have a traditional IT background, but [in 2000] Telecom decided it needed a CIO.”
There had obviously been someone in charge of internal ICT before, but it was not [previously] an executive position. “I’d been in and around the IT community in Telecom for five or six years before that. I had broad commercial skills as well as a deep understanding of telecommunications, and they picked me.”
The title of CIO covered a broad portfolio. “Among other things I looked after Xtra for a couple of years; I looked after Yellow Pages for a couple of years as part of that portfolio. [Telecom] bought Gen-i and Computerland and integrated them with Telecom Advanced Solutions. The CIO portfolio always involved some traditional IT and some business management functions within that.”
As a result of his broader experience, he says, “I have a lot more understanding of what non-IT people expect from IT people, because I’ve been on the customer side of [the IT business] and I’ve also been a supplier of services to external organisations as well as Telecom. I’ve had quite a lot of experience in dealing with major enterprise customers and not a lot of New Zealand CIOs have that.”
A lot of them, too, still don’t sit at the executive table.
“They report in to an operations manager or a finance manager or someone like that.” This leads to an undesirable narrowing of viewpoint to particular IT concerns. There has been some progress in recent years in giving the CIO broader responsibility, he says. “Banks often have the CIO running property and procurement. That’s a positive development. You’re responsible for so much of the logical infrastructure of the business as the CIO. So it’s natural to give you responsibility for some of the physical infrastructure too and to give CIOs, who are responsible for a lot of automation activities, some of the manual [corporate] processes to run, mostly the back-office ones, where you’re looking to do stuff more efficiently.
“As a CIO you’re often involved in negotiating quite major contracts, so you’ve probably got as good negotiation and supply chain management skills as any other executive. So giving you responsibility for some other part of the operation is a logical thing to do.” The willingness to do so varies between one industry and another, he says. In manufacturing a production manager might tend to specialise, “but in service businesses, where you use IT as the heart of how you provide customer services, CIOs end up with quite broad jobs. So it is more likely in a service-based industry that a CIO can take a step into a CEO role.”
There have, however been some surprising examples of the move, he says; it would not be expected in banking, for example, which is concerned chiefly with risk management; yet Ralph Norris made that move more than 20 years ago and went on to become CEO of Air New Zealand. “He was a banker at heart, who just happened to be a CIO, I think. There’s a difference between people who have done CIO as part of a portfolio of business jobs, as opposed to someone who has come through the IT department.”
That phenomenon is not just limited to the CIO role. “CFOs who’ve been in a number of other roles, in sales and marketing, for example, make good CEOs.” Those who have limited themselves to finance are not as good candidates, he suggests.
But he would not describe CIO as a temporary role in his career. “Nothing is temporary; there are always lots of opportunities out there; you just choose the best one at any one time; but also nothing is permanent. If you work for a large organisation, you tend to go where the organisation asks you to go.”
His move into the role of CEO of Chorus came about “simply because [Telecom CEO] Paul Reynolds offered me the job. I think he was looking for someone who had a deep understanding of the business and serving wholesale customers in an equivalent way and was acceptable to the multitude of stakeholders that we have.” The managing of multiple stakeholders’ needs is a skill that any competent CIO needs to cultivate, he says. “There are a whole lot of complex projects to be delivered on.” Chorus, he says, is “building infrastructure for New Zealand as opposed to [an IT department delivering] infrastructure of an enterprise, so there are some similarities there”.
What specific skills are transferable from the CIO to the CEO role? “I’m used to leading large groups of people. I am used to working in an environment where we have heavily outsourced.” In the case of Chorus maintenance of the network in the field, for example, it has been outsourced to Transfield and Downers. “Ninety per cent of the people who work for Chorus aren’t employed by Chorus. That’s not a dissimilar environment to the one I had [as Telecom CIO] when working with EDS [as a partner].”
A good understanding of the core systems of Telecom is naturally also indispensable to his new role.
The challenge of “alignment of business and IT” may be much discussed, but as far as
Ratcliffe is concerned, it’s a concept that makes no sense. “The perspective I have is that to be successful in any organisation, you can’t stick to just understanding the discipline that you work within. You have to understand the business your customers are in [and] the dynamics or your suppliers; you have to understand what your colleagues are about. I just don’t see this weird notion that there are ‘business people’ and ‘IT people’ and they have to be ‘aligned’. What is this thing called ‘the business’ that is external to IT? You never hear a lawyer, an accountant or an HR person talking about their colleagues as though they were ‘the business’ and [the specialists] weren’t.” Some IT people, he says, suffer from a “cringe factor” or even a “victim mentality”, seeing “the business” as something opposed to IT or uncomprehending of IT’s obvious benefits. When IT people have this attitude, he says, it’s because they haven’t been exposed enough to areas outside their speciality.
“I never subscribed to the idea of myself as an IT person. I’m just someone who goes to work for the enjoyment of it and the benefit of the shareholders; someone who happens sometimes to work in IT.”
How do you cure this tunnel vision? “Just encourage people to think beyond their immediate portfolio,” he says. “I talked [on the morning of the CIO interview] with the head of technology for Chorus, who has a deep background in product management in Telecom. I’ve asked him at management meetings not to just think of himself as head of technology, but to bring every skill he has got to every conversation.”
Ratcliffe is solicitous in avoiding any hierarchical structure implying an “A team” whose members have more right to speak up than those on the “B team”. If [anyone at the table] thinks that what we’re doing is a wrong thing, I’d rather they identified that quickly, rather than just try to think of a good story [to justify it to customers and other critics].”
Ratcliffe says the legislated separation of Telecom will change, in some respects, the work relationships he has been used to. “The CEO of Telecom is still my boss and I can still participate in a lot of the discussions within Telecom. There are some discussions I will need to withdraw from and of course things pertaining to Chorus are for Paul and I to have conversations around.
“The sort of conversations I will be having with Telecom are the sort I’d be happy to have with any other customer,” he says.
“I’m in something of an unusual position in a large organisation, in that my colleagues don’t give an opinion on what I do. In most organisations there would be a corporate office function writing policy that impacted you. I get to decide my own corporate policy. My boss can tell me what to do, but I’m not subject to what many would consider the restrictions of working in a large organisation.
“The downside of that is I don’t have quite as collegial a relationship as I would normally have with [Telecom colleagues] because I’m separated. I’m used to having peers that I can exchange challenges with and get ideas; now I have to be more careful.”
There are ways of making up for that deficiency. “I’ve got a boss with a lot of experience in the industry; I’ve got a lot of industry [forums] I can go to as sounding boards; I can talk to our customers. I’ve obviously got an experienced team of people to help and quite a network of people I’ve worked with over 20 years in New Zealand.”
There’s no “absolutely right answer” to making a transition from CIO to CEO, he says. “A lot of it is about your inner motivation; how much do you want to balance up between what you do at work and what you do outside work. That determines a lot about where your career might or might not go.”
Being an oldest child used to getting his own way helped, he says, not entirely in jest. “I suspect that if you look at leaders in any organisation you find a disproportionate number of them were the oldest or youngest child in their families. As the oldest you were the only one at one time and as the youngest there was no-one else coming along behind you.
“I don’t think I ever consciously sought [as a long-range career plan] to be anything in
particular,” Ratcliffe concludes, “but my nature is to grab opportunities and make the best of them.”
Fairfax Business Media