Lead, Follow, Or Get Pushed Out of the Way

Courtesy of Optimize

One of the all-time great business leadership stories involves the moment when Intel executives Gordon Moore and Andy Grove were trying to figure out how to stanch the company's losses to Japanese companies in the memory business. As noted in Grove's autobiography, Only The Paranoid Survive (and cited in the Fortune essay, "The Education Of Andy Grove"), Grove asked Moore, "If we got kicked out and the board brought in a new CEO, what do you think he would do?" Gordon answered, "He would get us out of memories." Grove thought about it a moment and asked, "Why shouldn't you and I do it ourselves?"

Gartner analyst Michael Bell believes that IT is at the same kind of crossroads, the same kind of defining inflection point: "IT will either become more of a utility, something like 'IT Lite,' or it can become a more strategic unit." Gartner calls it the "internal service company" model: "You adopt the principles of an external service provider, but you do it inside."

This is not a new concept, certainly, but what is new is the urgency. Outsourcing and offshoring are giving CEOs greater options for redefining whether IT should be strategic or simply tactical in a company. The time for vacillating is over—as Bell notes in this Q&A, CIOs need to take action now or risk being marginalized … or worse, fired.

Q: You've recently put together a leadership checklist for CIOs. How are you defining leadership?

A: It means taking the IT organization from where it is to where you want it to be. Managing internally with a technology-centric attitude is inadequate. Moving the IT organization into a commercial service-oriented paradigm implies change management, and that's certainly leadership. You need to communicate effectively, become more engaged with business partners, build your credibility and that of your department, and then take a seat at the table.

CIOs know this, but they have to understand how you identify and train leaders within the organization. They have to understand how to make leaders more business-savvy—not just run the data center but also understand client demands and take IT from being a utility to being a strategic resource.

Q: We've been talking about this for years. Why is it more crucial now?

A: Two trends right now are having a big impact: the globalization phenomenon and consumerization. More and more, people are getting their technology not from the enterprise but from consumer channels. It's the iPod phenomenon, the proliferation of WiFi and broadband connectivity. The preeminence and monopoly that IT has over the infrastructure is diminishing.

Q: You mean that people outside of IT are feeling more comfortable with technology?

A: Yes. With the ubiquity of connectivity, everyone is becoming more tech-savvy. We've gone from mainframe to client/server to the Internet, and the hegemony of IT organizations is beginning to yield to that reality. So how do you become a strategic partner? How do you change from being a tech-centric left-brained person into being a businessperson?

Q: I'm confused about one thing, based on the length of time we've been talking about IT alignment. How is it possible for IT not to have already gained greater understanding of the business?

A: The sad news is that in the survey we did on leadership, 72% of respondents are still stuck in a traditional silo model—centralized and function-based. Only 15% have adopted a service model. The reality is that either the IT staffers jump into leadership or cede it to another department, whether finance or marketing.

Q: So you're saying the world is not catching up with what analyst and journalists are saying?

A: Exactly. The top 10% of the CIO population do get it, but they're in the minority. The majority acknowledges the pressures, but they're still stuck in traditional mode. We need more guidance on developing leadership, to be competitive.

Q: Do you think it's just a question of inertia?

A: That's possible. Battleships are hard to turn, and IT does have decades of having a monopoly in the enterprise. But there is another issue to deal with in terms of regaining credibility: the hype about the Internet introduced skepticism back into companies, and IT has to fight that as well.

Q: So what do people need to think about in terms of leadership?

A: Be brutally honest with yourself. Look at your behaviors and practices. Do a self-assessment. Are you proactive and strategic about problems, or are you just reacting to them?

Q: Sometimes it's a cultural issue too.

A: In our report on leadership, we suggest that you engage with your peers and create a common vision. Change your culture to one that's collaborative, trustworthy, and credible and has strong emphasis on your performance indicators. Become customer-centric rather than technology-centric.

Q: But cultures take a long time to change, and then you run into the issue of CIO tenure too.

A: It's a two-to-three-year process. I've talked to clients who launched efforts like this three years ago, and they're still not there. It's Change Management 101. It entails all of those disciplines: weeding out naysayers, promoting those who exhibit leadership behavior, recruiting business-savvy people, and cycling them through the business units and back into IT.

Feedback question: Tell us how your efforts to become a more strategic IT organization are progressing, or comment on this story at the new Optimizeblog.

Q&A conducted by contributing Web editor Howard Baldwin.