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CIO Conference 2007: Giving direction

CIO Conference 2007: Giving direction

Today’s CIOs are using ICT to not only support, but drive change — and not only enable, but lead innovation, across the enterprise.

Leadership is a dance, in which leaders and followers jointly respond to the rhythm and call of a particular social context, within which leaders draw from wells of collective experience and energy, to engage followers around transforming visions of change and lead them in the collective creation of compelling futures. Air New Zealand CIO Julia Raue cited this quote from The Dance of Leadership by Peter Cammock in her opening keynote at the CIO Conference 2007.

The theme of the conference was about the new CIO agenda — business leadership and innovation.

At Air New Zealand, the CIO portfolio includes innovation and ventures. The airline’s success in the online space - with projects like Grab a Seat and Holidays Experience Gallery - is a testament to the possibilities for enterprises putting ICT at the forefront of innovation.

But, as Raue emphasises, the culture of the organisation is important in inspiring and enabling successful innovation. This culture was tested to the fore when Air New Zealand decided more than two years ago to tap its internal resources to develop its online business.

The decision was prompted by the airline’s experience with an offshore vendor when it was developing the domestic booking engine some five years ago. The launch was already behind schedule when Raue was tasked to head the project.

Working with a vendor in a different time zone meant team members attended “endless” teleconferences outside working hours as the vendor was not open to holding these outside its working hours.

Raue recalls one time when the airline had problems with its international booking engine and the only person who could help them was out to dinner and told them he would not be able assist them for two hours. “While this was evening in the US, we were in the middle of the NZ morning, and losing revenue, and there was basically nothing we could do,” she recounts. They called his manager who said it was his birthday, and offered to pay him so he could get out the next evening, or pay his cab so he could get to the office faster.

Raue was then eight months pregnant and was relieved to take a break knowing the airline had already shifted its booking engine to a “new generation”. But when she returned a year later, the challenges remain.

“We were unique in our requirements, and along with driving high cost, the vendor was typically trying to fit in releases for other customers,” explains Raue.

Another key issue was that Air New Zealand was also trading away its intellectual property (IP).

When Air New Zealand worked on its new booking engine some two years ago, it assembled an in-house team whose members had significant technical and business knowledge of the airline. They had the full support of the business to challenge the traditional and debate and discuss new approaches, says Raue. The 12-week proof of concept confirmed what she already knew — “When you combine industry knowledge and IP, along with strong technical capability, the result is extremely powerful.

“For me, it was a huge lesson in trusting what you know,” she says. “And as CIOs, that is so important. We’ve been in this industry, we’ve done our time, we have instinctive senses that drive us to make decisions, and we should trust that every time.”

The online engine is now over a year old and “our stats scream value,” says Raue. Whereas the old engine delivered $100,000 of online sales a week, the new engine delivers up to several million dollars in one day.

For Raue, a primary factor for success when implementing projects across the business is having the right relationships with the executive team, along with the other managers and stakeholders. For instance, Raue reports to the CFO, Rob McDonald, but the executive team sees and treats her as a peer, and she meets them regularly one-on-one or as a group. She can discuss ideas with CEO Rob Fyfe, who used to be the airline CIO, and get his feedback or direction.

This relationship is made possible by the fact that IT also achieved $47 million of operating cost savings across four years. “By strong delivery to the business and proven value of IT, we earned the right to work ‘outside the square’,” she says.

She says it is crucial, however, that the initiative is well understood and supported across the company. “Your success depends on you accessing the best resources, and you can not compromise this.”

Having a strong understanding of the business — its stakeholders, the business challenges and how technology can drive success — is also important. “You need to be able to build, motivate and sustain a high performing, sometimes virtual, team.”

Raue says once Air New Zealand achieved this, the next challenge was to drive the performance of the rest of IT to match that. “We worked hard to create an environment where there was a feeling of elitism, where people wanted to be a part of something unique,” she says. “We are now achieving that right across our IT team of around 220 people. It has been a huge lift to our internal culture, and our external message of Air NZ IT being a great place to work, full of development and opportunity.”

An in-depth knowledge of the team — its combined capabilities, strengths and weaknesses — is vital so that you can mitigate, develop or strengthen these. In the same vein, it is crucial to know who your strategic partners are — what they can leverage, and how and when you can obtain maximum benefit when working with them.

“It is really important that you know what you want to achieve and that you set the principals to achieve this up front, and don’t compromise,” says Raue.

Conquering adversity

Andre Mendes knows how it feels to go “from hero to zero to hero to zero”.

Mendes is vice president and global CIO, Special Olympics International in Washington DC. The organisation has experienced “explosive growth” in the past five years, with chapters in every state in the United States, and 160 countries. In 2001, a million athletes participated in its events, and in 2007, this number has grown to three million, of which two-thirds are from outside the United States.

Mendes joined Special Olympics from Public Broadcasting Service (PBS), where he spent eight years and was in charge of developing and implementing strategy in the broadcasting engineering and information technology divisions. He is now applying the insights from those years to Special Olympics.

PBS is a “great organisation” but with legacy systems, fiefdoms and workflow problems, says Mendes.

He was tasked to implement an overhaul of the systems that included consolidation around standards, streamlining the entire environment and technology upgrades. His team used the work on the Y2K remediation to get rid of a lot of old platforms and migrate to Oracle Apps. The project was completed ahead of schedule, by two weeks, and under budget, around US$17,000. “It was not much,” he says, “but how often does this happen?”

Users, he recalls, were largely unaware of the changes that ensued except for experiencing better performance, faster deployment of programs, and rapidly increasing uptime statistics. His CIO status, by then, had zoomed to “hero”. In May 2001, Computerworld magazine named him as one of the “Premier 100 IT Leaders” in the US.

The dotcom craze beckoned and Mendes left PBS to join a start-up company. Eighteen months later, following the collapse of the “biggest pyramid scheme”, as he calls the dotcom bubble, he returned to PBS and like the prodigal son, had a “returning hero” status.

The strategic plan for PBS was formulated and included continued standardisation, supply chain optimisation and heavy adoption of IT infrastructure. The executive team loved the changes and the chief technology and integration officer — Mendes’ title — was again lauded as a “hero”.

But in the implementation, Mendes took on the mantle of change agent by himself, which he says was one of his first critical mistakes. He says he overestimated the staff’s appetite and stamina for change and failed to prepare for management challenges. “People got tired of going to meetings,” he says and the attendance to the monthly executive committee meetings tapered off.

That, he says, should have been the first warning signal. He says if this had happened to him today, he would have called off the project due to lack of executive management and buy-in. “There are no saviours” for those in this role, he says. “Unless you get cooperation from all sectors of the organisation, you will fail.” The new workflow and organisational structure, which was formulated in 18 months with users in an “exhaustive workforce meeting”, had sparked a quasi staff riot. “It was unbelievable,” says Mendes whose status had sunk to “zero”. “I was close to clinical depression.”

Looking back, he says, it is very important not only to get the support from all layers of the organisation, but also to provide continuous briefing to the senior management. “Ironically, technology is the easy part of the job,” he says. “Cultural and anthropological issues can derail the best laid plans.”

People mourn legacy applications and workflows, he says, and eliminating fiefdoms and silos requires deep executive commitment.

The project went live 10 months late, and US$330,000 over budget and was able to reduce the full-time staff by 37.

His status? “Absolutely human and humbled,” he says.

Nonetheless, his work in migrating the PBS to an IT-based digital broadcasting platform and consolidating technical operations has been recognised. The Maryland High Technology Council named Mendes as 2006 IT Executive of the Year for the Mid-Atlantic region in the non-profit category. He also received the 2006 Mid-Market Leadership Award by CIO Decisions magazine and a 2005 Technology Leadership Award by Broadcasting & Cable magazine.

As Mendes recounts the lessons from those years, he harks back to this quote: “It must be remembered that there is nothing more difficult to plan, more doubtful of success nor more dangerous to manage than the creation of a new system. For the initiator has the enmity of all who would profit by the preservation of the old system and merely lukewarm defenders in those who would gain by the new one.”

The author? Nicolo Machiavelli, who wrote this more than 500 years ago. Yet they remain so true today.

But for all the challenges they face, the future is bright for today’s CIOs, says Mendes.

There are more CIOs “at the table”, he says, and regardless of industry, “Information technology is the lifeblood of corporations.”

ICT on the frontline

Lt Col Karyn Te Moana holds probably one of the most interesting — if dangerous — jobs in ICT. She is the director of the NZ Army command and control systems, Communications, Computers and Electronic Warfare — which provides network support for the New Zealand troops in peacekeeping and disaster relief operations, and in combat.

ICT plays a critical role in the front line, as it supports the flow of information to attain decision superiority, she says. Commanders often receive, among others, unprocessed “information dump” and endless PowerPoint charts. What they want are shared understanding, identified threats and opportunities, actionable knowledge and tailored decision frameworks.

The critical thing is to make things work, and to leverage what is available, she notes.

Today, she says, all deployed personnel can make a welfare phone call and can receive an unclassified email, and most have access to the Defence information network. All large deployments with medium or above threat levels have access to classified data systems.

The challenges, meanwhile, are varied. These include ICT resource shortages to support deployments and training. Every deployment is different. “We have to restructure our ICT differently every time we deploy,” she says.

This requires, she says, a 24x7 “focused leadership”.

“We train for certainty, educate for uncertainty.”

Team work is as important as soldiering is a “team activity”, she states. The people are rotated to allow transferable skills, problem solving skills are critical. There are times when one has to forego the “niceties of life”.

And this, she says was demonstrated clearly when she joined the first landing of the Kiwi troops in East Timor. They were surrounded by burning buildings and were assigned to secure the environment for the local people, while setting up the communications system for the troops.

Lt Col Te Moana has joined peacekeeping missions in the Sinai and the former Yugoslavia, but East Timor, she says, was her most challenging field assignment so far.

Digital natives in the workplace

Jason MacDonald, director of ICT Services at Kristin School, details the nuances of working with ‘digital natives’ the generation of users who grew up with the technology.

MacDonald calls them the “hyper connected generation” and they are looking for new leadership styles and using collaboration styles that will require new applications, service and network demands.

Some of these “digital natives” are already part of the workforce. They will definitely make up your staff tomorrow, and be the CIOs of the future.

The presence of different generations in the workplace presents a challenge to the “digital immigrants”, a term he attributes to Marc Prensky, which refers to those not born in the digital world, but have adopted the new technologies.

So what are the implications for the CIO as this younger generation of workers enter the workplace? MacDonald draws from his experience working with students at Kristin School. Among others, they will want unlimited bandwidth and ubiquitous access to the net, and are using a range of online collaboration tools and methods. They will bring their own IT tools to work. “Are we prepared for this?” he asks.

What’s next on the CIO agenda?

Mary Ann Maxwell, group vice president, executive programmes, Gartner, has worked in ICT for more than 30 years.

Maxwell recalls starting out as a machine operator and moved on to an evolution of job titles, including what she calls the “title of choice” in the 1980s — chief information officer. “I was once introduced as the bits and bytes bimbo at a company meeting,” she says, with a laugh.

Over the last five years, leading organisations and leading CIOs have redefined the characteristics of the role, she points out. Business has beat out technology. Many companies have started to hire, promote or rotate non-technology executives into senior-level IT roles.

Thus the effective CIO of tomorrow, she says, will be a technology-savvy business leader rather than a business-savvy technologist. In the next five years, she says, there will be unprecedented opportunities to exploit ICT in the most competitive manner.

She says boundaries between business and IT are also blurring as enterprises are moving from using IT to enable business processes, to creating new business technology processes. She cites Gartner’s estimate that by 2012, people with business or business/technology hybrid experience will be responsible for at least 75 per cent of strategic IT decisions, up from less than 40 per cent in 2006.

If you want to be a “real” CIO today and in the future, she suggests developing and demonstrating a range of skills and capabilities. These include understanding the business, and leveraging IT to support a winning business. “Act as a peer to the business leaders and deliver services that are valuable and valued. Drive relentlessly to satisfy business needs,” she advises.

Her final advice involves people. “Take care of your people,” she says. “Listen to them, nurture them, challenge them, reward them, and lead them. Do that and you will be a respected head of a successful organisation.”

© Fairfax Business Media

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