I recently caught up with Piyush Singh, the senior vice president and chief information officer of Great American Insurance Group’s Property and Casualty Operations. He was excited to share with me five lessons he has distilled from his almost ten years as a CIO – nearly seven of them at his current company – that he believes are lessons to follow for CIOs to be successful. He refers to them as “Piyush’s Big Five”.
1. CIOs can ensure that a higher percentage of IT budget is spent on development than on maintenance
Many IT departments spend too much on maintenance and not enough on developing new and innovative capabilities for the companies within which they operate. Singh quotes the standard metric in the insurance industry of 80/20 (80% spent on maintenance and 20% spent on development). Getting to parity in maintenance and development and driving for a higher percentage on development can be a daunting task. He makes the point that too many CIOs wait for the business to change the agenda or expect them to concede on maintenance issues to achieve the flip. However CIOs need to do the heavy-lifting to right-size the intellectual capital /workforce plan, optimize and eliminate redundancies and operate more efficiently. This heavy lifting, something they prefer to avoid, is required to achieve a better balance.
A business-oriented CIO realizes that he or she needs to be a partner to support the business environment. In fact, to wait is to wait for the issue to become even more difficult to solve. CIOs who display creativity and ingenuity to focus on development will be respected for being responsible custodians of the limited people and financial resources that are available to them.
2. A CIO’s accessibility to other business executives is directly correlated with the degree to which he/she is integrated into the business strategy
Singh makes the point that weaving IT into the narrative of business strategy is more than simply attending scheduled meetings, planning meetings and creating documents as a support function. The so called “seat at the table” has been a misleading expectation as it leads to being asked to attend planned and scheduled meetings. The first thing a CIO needs to do is understand the domain, create an ongoing conversation and an engagement model that involves learning and participating on the front lines. It is important that the CIO be accessible to other executives and reach out to them proactively to understand their opportunities, their challenges and their aspirations. He/she needs to become a trusted business partner and advisor and someone that the business counts on to bring ideas and innovation into the enterprise. Relying on attendance at formal meetings and taking an order to deliver a system is not enough. Traditional CIOs have had moderate success in establishing deliberate strategic directions and supporting plans to achieve the same. Modern CIOs need to engage with the business to evolve their strategic plans. The plans need to be adaptable so that the emergent strategic plans are in tune with the dynamic business environment. These informal interactions and a solid understanding of the business are critical.
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3. Develop solutions, not just automation
The traditional expectation is that CIOs are expected to automate what is already in existence. Executives that are seeking to develop competitive advantage want truly creative CIOs who work with them to develop game-changing solutions that can be disruptive to business problems and challenges. Singh makes the point that IT executives must engage leaders from across the company at the point where their pain points have been identified or where opportunities have occurred to them, and then collaboratively design solutions to meet existing and, more importantly, emerging needs. The most critical aspect for their solutions is that they should be sustainable as the business world evolves. This does not suggest that in certain cases automating existing processes are not a part of the CIOs’ jobs, but it should be a decreasing percentage of the project work that the IT department undertakes.
This means that CIOs have to channel and develop their intellectual capital base to focus various different skills/traits that are continuously evolving: lateral thinking, innovation, business process expertise, user experience design, new business models from outside industries, etc. An IT staff that has a variety of skill sets and exposure in these areas will become a key differentiator in making IT a competitive advantage.
4. A CIO ’ s longevity in his or her job (more than the average tenure) can be inversely correlated to his/her ability to develop game-changing ideas and take risks.
CIOs, like most individuals, may become more risk averse as they get settled in the role or achieve significant success (or drag) in the major transformational endeavors they launch. As a consequence, they may tend to shy away from game-changing ideas or transformational changes as they lack the luxury of timeframe to see the results of their efforts happen. At best, later on in their careers, this means a series of projects that are derivatives of what is already in existence or small incremental changes, and at worst it means not sounding the alarm bells when major change needs to be made for fear that they “rock the boat” or, worse still, not succeed if the initiative is given the green light.
CIOs typically accept a lot of risk, especially as IT is a growing and sometimes a key source of innovation in most companies. Risks by their very nature can lead to failures – in case of IT they tend to be very public and large scale. For the leader of the IT function to be expected to achieve a 1.00 batting average, he or she starts pursuing a safe path over the one that may be disruptive or game-changing and help drive competitive advantage.
One of the major reasons behind this scenario is also the fact that CIOs in most companies hit a career ceiling within the companies that they work in. Creative companies that recognize the talent will tend to expand the responsibility spectrum of the CIO to capitalize on their talent and involve them directly in business operations.
5. On-time and on-budget is not the only criteria for project success. Sustainable competitive value proposition should be a critical metric.
Singh makes the point that pushing to ensure that projects are on-time and on-budget is important but those cannot be the only criteria to gauge the success of IT projects. It is critical to understand if the intended value (as defined upfront and as the environment evolves) is achieved. This presupposes that a value estimate has been made for projects’ strategic business proposition that is more than functional feature counts. It also means developing projects in an agile fashion so that, with each iteration in the project’s development, there is an opportunity to validate the assumptions and consequently adapt and enrich the value offering of the project.
This reinforces the view that the deliberate strategic plan with a defined time and budget might not be applicable to the emergent strategic plan that has been subjected to the time test of assumptions and complexity of the environment. The emergent strategic plan should also impact the resources allocated to the project. Finally, it also suggests that project value is evaluated weeks or even months after the project has concluded, since value oftenbegins only after the project is implemented.
Piyush’s Big Five has served him well as in his two CIO stints, and the ideas apply well to companies in a vast array of industries as well.