• Categories
• Director de información
• Gestión estratégica
• Liderazgo
• Liderazgo y tutoría
• Fusiones y adquisiciones

Citation preview

Mike Sisco’s

Practical IT Manager GOLD Series

What To Look For in a CIO

get more value from your IT investment

“helping IT managers of the world achieve more™ success”

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

-2-

Practical IT Manager GOLD Series

What To Look For in a CIO get more value from your IT investment 2nd edition

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

-3-

Introduction Hello and welcome to the Practical IT Manager GOLD Series. I'm Mike Sisco, President of MDE Enterprises, Inc. and a career IT manager and CIO of more than 20 years. Since 2000, I have devoted my life to, "helping IT managers of the world achieve more success". My practical processes and tools are used by thousands of IT managers in every part of the world.

Mike Sisco, ITBMC

The challenge of managing technology resources has never been more demanding than it is now. Change occurs more rapidly and technology resources are in more demand than ever before.

People and companies respond to strong leadership. Effective leadership skills give a technology manager an edge in creating and maintaining a stable business environment. This leads to more success and an IT organization that's valued and appreciated by the business managers of your company. The material contained in the entire Practical IT Manager GOLD Series of books has been developed from my experience in managing technical organizations of all sizes for more than 20 years. The examples are ‘real life’ experiences of things I know to work, or hard lessons learned from things that did not work. I developed every process and tool you will learn about to help me manage IT organizations during my career. They worked for me and will for you as well. Two tools I use to enhance the material or to clarify a point are: Sidebar: a comment or clarification to help make a point Personal Note: a personal experience or “war story” to reinforce a point. You will find a bit of humor to make the reading more enjoyable and to emphasize certain points. Because of my very “dry sense of humor”, you may have to look for the humor, , , sorry about that. I also hope you like the images I pop in at times to make the reading more interesting.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

-4-

The Practical IT Manager GOLD Series includes the following titles: IT Management-101: fundamentals to achieve more™ IT Assessment: the key to IT success IT Strategy: align your IT vision for business value IT Organization: right-size your organization for success IT Project Management: a practical approach IT Staff Motivation and Development: build a world class team IT Asset Management: tracking technology assets IT Budgeting: operational and capital budgeting made easy IT Due Diligence: merger & acquisition discovery process IT Assimilation: consolidating redundant technologies What to Look For in a CIO: get more value from your IT investment , , , plus more titles to come To view the Table of Contents for each publication or to discover other IT manager products and services we offer , go to www.itmanagerinstitute.com for more information. Interested in our IT Manager Institute and IT Business Manager Certification (ITBMC) program? It is one of the most successful IT manager training programs in the industry and available in both classroom and self study formats. Go to www.itmanagerinstitute.com for details. Managing IT organizations at a high level is serious business, but having fun along the way is also important. I hope you find the material helpful in your quest and welcome your feedback. You may contact me at [email protected] . Best regards and success,

Mike Sisco, ITBMC

MDE Enterprises, Inc. www.itmanagerinstitute.com Additional resources from Mike Sisco ITLever Blog www.itlever.com Free tips and tools, , , updated frequently

IT Manager Institute www.itmanagerinstitute.com Both classroom and self study versions are available 20 Minute IT Manager www.20minuteitmanager.com Complete library of over 160 e-Learning sessions Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

-5-

What To Look For in a CIO Table of Contents

Introduction ……………………………………………………………………………. I. First – Identify Company Goals and Objectives ………………………………. A. Quantify business objectives ……………………………………………. B. Importance of business planning ……………………………………….. C. Where is the company today? …………………………………………… II. How Important is Technology in Your Company? ……………………………. A. Strategic …………………………………………………………………… B. Operationally critical ………………………………………………………. C. Supportive …………………………………………………………………. III. CIO or Technical Manager? …………………………………………………….. A. Every company does not need a CIO ………………………………….. B. What are the differences? ………………………………………………... C. All CIO’s are not equal ……………………………………………………. IV. Successful CIO Traits ……………………………………………………………. A. Assessment ………………………………………………………………. B. Strategy …………………………………………………………………… C. Planning …………………………………………………………………… D. Organization ……..……………………………………………………. E. Implementation …………………………………………………………... F. Leadership ………………………………………………………………... G. Communication …………………………………………………………… V. Defining Your “Ideal” CIO ………………………………………………………. VI. What Should You Pay? …………………………………………………………. VII. Where to Look …………………………………………………………………… VIII. The Interview ……………………………………………………………………. IX. The Offer …………………………………………………………………………. X. Ready, Set, GO! ………………………………………………………………….. XI. Summary ………………………………………………………………………….

4 7 10 17 20 21 22 23 24 26 26 29 31 33 34 44 48 49 50 51 53 54 57 59 60 62 63 65

APPENDIX: A. My Resume ………………………………………………………………………… 66 B. Sample CIO Job Description …………………………………………………….. 69 C. Blank Technology Leader Skills/Experience Matrix …………………………… 74

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

-6-

I. First – Identify Company Goals and Objectives It’s a simple concept. How can you determine your need in a CIO unless you have first determined what you want to accomplish as a company? You probably thought we were going to jump right into talking about CIO attributes and capabilities. Don’t worry, we will get to that soon enough. You wouldn’t just go buy a new manufacturing machine, truck, computer, or other resource without first defining what it is you need it for, , , and whether you need it at all, would you? Of course not. Well, a CIO or any other employee in your company is an asset just like a piece of equipment. Certainly there are many other things to consider when hiring someone, but I think you get the point. A CIO is a significant asset in your company because this position can impact every department and individual in your company. A key to a successful Information Technology (IT) organization is for IT to be “in sync” with your company’s business needs. For this to happen, you need an IT leader with the right skills and experience who can identify these business needs and issues and then focus the IT organization appropriately to support them. Putting the appropriate level of manager in place for your company’s immediate and future needs requires an understanding of where you’re taking the company, what has to take place to get there, and where you’re starting from. Knowing these issues will help define “how big the mountain is” that you’re about to ask someone to climb. Such an evaluation will also tell you whether you need someone who can scale a Mount Everest versus a tall hill. Getting the right fit is important for your company as well as the CIO you bring in for long term success. Don’t just pass over this. Put serious thought into what your company wants to accomplish. Later on you will see that defining your business objectives is the most important aspect in determining the ideal CIO candidate.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

-7-

Let me ask you a few questions: “Do you know what your IT organization is doing and why?” “Do you know how much money you spend in IT and why?” “Do you understand your CIO when he makes a recommendation to do something?” “Do you enjoy talking about technology?”

If your answer to one of the first three questions is “NO”, there is a high likelihood there is a gap between your IT organization and your business. Are you aware many studies suggest an “IT-Business Disconnect” occurs in over 50% of all companies in the world? If this disconnect exists in your company, it is costing you big time in lost productivity and flushing money down the drain due to the IT organization focusing on the wrong issues. Most CEO’s do not know how to identify whether an IT-Business Disconnect exists or how to fix it. In fact, it’s not the CEO’s job to fix an IT-Business Disconnect. The IT organization has to determine if it exists and resolve it if it does exist. The problem is that when a disconnect occurs in a company, , , the CIO or IT manager usually is not aware of it. If he were, he would do something about it, , , assuming he knows what to do.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

-8-

It probably won’t surprise you when I say, “IT people are different!” “Of course they are, , , we all know this.”, you are probably saying to yourself. Well, you might be surprised when I tell you that most IT people do not believe themselves to be different, , , they see it as they just understand technology better. I’m an IT guy and I can tell you with full confidence that IT people really are different. IT employees have a very consistent personality and work behavior, , , there is actually a personality type that’s drawn to technology. Here is why IT people are different. IT managers come from technical backgrounds in 99% of the cases, , , not from business operation backgrounds. As a result, they understand technology, not business. Your “normal” company employees work in the business and not in technology. IT people speak a different language, , , using technical acronyms all the time and they talk about the technology, , , not the business. Quite often, business people do not understand what an IT employee is saying, , , but they don’t want to admit it. Technical managers talk about “what”, , , business managers want to know “why”. IT people tend to discuss an issue by talking about the technology features, not about the business benefit which is what business people need to hear. This language difference creates a significant communication gap. Business managers understand revenue, cost, profitability, productivity, risk, and opportunity. IT people don’t speak in these terms, , , they talk about routers and switches, WAN and LAN, cloud computing, etc. This is great information you might say, , , but who wants to understand all this technical stuff? Have you ever been in a meeting with an IT manager and you can’t understand anything he says? Not only that, he wants to give you so much detail you can’t even begin to digest all the information. I know, , , I know, , , it’s a big problem. I’ve been on the delivery side providing my CEO with a technical explanation and way too much detail. The confusion I saw in his face was not that he needed more information like I thought he did, , , I was already giving him too much information. He wasn’t understanding my message. Is this my CEO’s problem or mine? Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

-9-

You bet, , , it is completely and totally my problem. An IT manager has to be able to adjust his presentation so an executive can understand. Otherwise senior management is never going to understand IT’s recommendations and explanation of things. As a CEO you are not expected to know how to apply technology to achieve company objectives, , , that’s your CIO’s job. But it does make sense to expect a CEO to be able to define the company’s business objectives, even if it’s at 50,000 feet. It’s also appropriate to expect a CEO to be able to find a capable CIO to manage the company’s technology resources. This book will help you in this regard. First, let’s talk about identifying the company’s objectives. This is a key part of defining what it is you need in a CIO. When you know what you want to accomplish, it sets the stage for the skills needed in your senior IT leader. To discuss this part, I’ll focus on three main points: A. Quantify business objectives B. Importance of business planning C. Where is the company today? When we finish this chapter, you should be better prepared to define your company goals and objectives. A. Quantify business objectives As you reflect on what it is you want to accomplish as a company, you need to write it down if you haven’t already done so. Not only will this exercise help you in defining requirements in an ideal candidate, it will become a great tool to assist you in interviews and later on in introducing your objectives to a new CIO. A CEO being able to explain his company’s business objectives and plans to a CIO is huge, , , it is the most important thing for the CIO to be aware of because it sets the stage for all decisions he will make as the head of IT. Every decision, , , every act, , , every expenditure the CIO makes and recommends should be done in a way to support the company’s ultimate mission and the goals and objectives to achieve this mission. Sidebar: I make an assumption that you may already have a CIO or technical manager in place but feel you have a need to assess your current IT situation. This information is valuable for both a senior executive and a CIO to insure he/she starts out on the right path. Even if you already have a CIO in place, a reassessment periodically and a review of “the mission” can help insure your IT organization stays in sync with the business side of the company. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 10 -

One of the big concerns of CEO’s and CIO’s every year is an issue mentioned earlier called the IT–Business Disconnect. It occurs in over 50% of all companies worldwide according to most studies and happens when IT works on things that are different than what the company needs from them. The bottom line is that IT is out of sync with the business managers of the company.

I know it to be an issue because I’ve seen it in dozens of company acquisitions and hear about it all the time in discussions with IT managers around the world. I’ll have a discussion with a manager, and it’s clear in the discussion that IT is probably focused on the wrong things for their company. Usually, what I will hear is IT focusing on technology, , , not the business. You cannot afford for this to happen. When it does, all too often the IT manager doesn’t realize it. Senior management may feel like something is not quite right but they can’t put their finger on it or explain it to their IT manager. For a good consultant, it only takes a few hours to determine if a “disconnect” exists in a company. If it does, your company is losing tremendous amounts of productivity and wasting money when IT works on the wrong things. Let me emphasize a point here. Your IT manager does not work on the wrong things on purpose. Most senior IT managers are very conscientious, smart, and want to do a good job, , , actually, they want to do a GREAT job! The problem is that they understand technology and not the business. One of the most difficult challenges an IT manager has is in transitioning from “technical expert” to “business manager”. Without help, , , many don’t make it only because they aren’t aware of what needs to be done, , , not for lack of trying or desire to do a good job. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 11 -

Maybe your company doesn’t have a formal 5-year strategic plan, , , but it’s no excuse for a CIO to work on the wrong things for your company. It starts by finding out what the company objectives and plans are, , , business plans, not technical plans. We don’t need a formal strategy to learn the key objectives of a company. When I conduct an IT assessment, one of my very first interviews is with the CEO and CFO. Often, they do not have a formal company strategy, , , but when asked, “What are your plans for the company over the next 3-5 years?”, , , they can discuss this quite well. If they say they expect to grow by 15-20% a year and you ask them how they will do this, , , they will be able to tell you. Company executives can talk all day about business and what they envision for their company in the future. Guess what, , , when they do, they are telling you their key objectives by answering some general questions as you try to understand their business and what they plan for their company. Their discussions have technical support implications, , , the CIO just has to pick up on them. When a good CIO understands the company’s objectives, he digs deeper to understand the business needs and issues that exist within the company. Once he has a grasp of these issues and learns about what the existing IT organization can do, he develops an appropriate IT strategy to support the company’s need. Far too many IT managers focus on the technology first, , , only because they think it’s the right thing to do. This can easily cause a disconnect between business and IT when the IT organization ends up working on things that do not really do much for the business. What this says is that the CEO must define the company’s key business objectives and share it with his CIO, , , and all department managers of the company for that matter. This information is vital for every department manager’s planning and focus.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 12 -

When quantifying business objectives, begin global and work your way down to the appropriate level for your situation. Company major objective – Define the major objectives you want the company to achieve. For example: - Increase revenue to $500 million and take the company public in 3 years - Increase earnings from 10% to 15% in 3 years - Become the largest and premier service offering in our industry within 3 years As you can see, this is a very broad target but it defines what you believe the ultimate success of the company should be in a defined timeframe. This vision of where you want to be at a given date should drive the decisions of each of your senior managers, especially your CIO. OK, if this is our major set of goals, , , how do we get there? Company strategic initiatives – Identify the key things that must be accomplished to achieve your major objectives. For example, if you are a $100 million revenue company today and your major objective is to be $500 million in 3 years, you either have to acquire other companies or increase sales aggressively to achieve your goal. Both of these options for growth certainly have technology implications even if it is just the ability to have an infrastructure able to support a company five times its current size. Do you see what I’m getting to? These high level explanations of what you want your company to be and key strategies you think will get you there start defining real work the CIO must plan for. This one piece, , , grow the business from $100 million to $500 million in 3 years gives your CIO lots to think about, such as: - IT staff required to support a business five times our current size - Building space we will have to grow into and set up for systems connectivity - Software license requirements - New business applications - Infrastructure capacity and scalability needs - Acquisitions of other companies – WOW!! , , , lots to consider here Your CIO needs to learn more about how you plan to achieve this major goal. Most CEO’s and CFO’s will be able to tell you how they believe the company can accomplish their major objectives of growing from $100 million to $500 million. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 13 -

Examples of strategies to increase revenue to $500 million within 3 years might be: - Acquire 4 companies totaling $300 million in revenue - Increase sales in current product lines by 20% each over the next 3 years - Add a new product line that generates $20 million in sales by Year-3 By identifying the major steps required to achieve the ultimate goal, you have given an astute CIO vital information he needs to begin developing a strategy that is consistent with your company direction. These specific targets spell out quite a lot of what the CIO must do to support the company’s growth. If you can be a bit more precise, it helps. The more specific you can be in defining challenges and business initiatives that help you achieve your major objective the better. Try to break your strategic initiatives into tactical initiatives.

Company tactical initiatives – The need to do some things sooner than later is often the case in a company. Take the time to truly assess immediate business needs of the company. These issues may be business regulatory issues, cash flow challenges, or other issues of importance that must be dealt with quickly. When a good CIO hears your business issues, he translates them into,

“What must we do in IT to support this issue?” He hears “business issue” but immediately starts thinking “IT support”. Just because you identify immediate focus needed in certain areas is not going to cause a credible CIO to lose sight of the major objective. In fact, knowing where the company wants to be in 3 years has a significant bearing on how the CIO goes about addressing the immediate needs you identify.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 14 -

Personal Note: After joining a small company as their new CIO, my immediate task was to improve the focus and morale of an IT organization of about 30 people and to position IT to support our company’s planned growth. The IT organization was split into two parts located in two cities, , , Atlanta, GA and Richmond, VA, , , about 500 miles apart. The 22 people located in Richmond had the majority of the technology experience and client relationships of our business. Our clients consisted of external companies and internal employees who provided physician billing services using software we developed and supported. Because the CEO explained to me the company was going to grow significantly through acquisitions of other companies I made the decision to merge the two IT organizations into one as I went about improving the client service support culture. I decided to move the Richmond office to Atlanta where our headquarters was located.

The easier path would have been to consolidate to Richmond where most of the people were, but knowing the extent of our planned growth I consolidated to Atlanta, , , a much larger city and sufficient in size to find and hire several hundred IT people as we grew. The Richmond market for IT people could not support the additional staff we would eventually need. I could have fixed the service issues in either city, but knowing the company’s growth plans I chose the path that helped the company the most in the long run.

The easier path is not always the right or best path to take. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 15 -

Tactical initiatives can be anything from something that has been a pervasive problem for some time to simply a key project you believe is important for the business. Our example might include tactical projects like the following: - Improve the support of an existing technology. - Position the IT organization to assimilate a new acquisition planned soon. - Update the infrastructure to be more scalable and position for growth. - Automate a component of our business to improve productivity. - Automate the billing process to eliminate paper and improve cash flow. - Modify software to comply with a government regulatory change. Tactical project initiatives are “hot” items you believe the IT organization needs to focus on. If you aren’t sure whether you should direct your CIO at such a low level, it’s perfectly fine to provide him with insight and suggest he evaluate the situation and develop a plan of action on his own. In my experience, most senior executives are more comfortable discussing the business issues at a high level and letting their CIO develop a plan of attack on what the IT organization needs to do to address these issues. Executives typically do not want to wade into the technical weeds. In a new CIO position with a company, I always conduct a quick IT assessment to understand the business needs and issues and also the capability and capacity of the IT organization. A couple of times, I’ve asked my manager if he wants to participate in the assessment. The answer is always, “No”. Senior executives don’t want to be involved with technology at this level, , , they have hired you to take care of technology. A strong CIO will be comfortable with either a high level of involvement from senior management or a lower level where management is more direct in what they want. Over time a strong CIO will expect to lead and drive direction rather than to just take orders and implement. We will discuss this more in the CIO or Technical Manager section.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 16 -

B. Importance of business planning Yogi Berra was a great baseball player for the New York Yankees in the late 1940’s through the mid-1960’s. He was well known for his bizarre statements to the press we call “Yogiisms”. Have you ever heard this Yogi quote? “You’ve got to be careful if you don’t know where you’re going ‘cause you might not get there!” You have identified your major objective (the target) so you know where you want to go. Great – full speed ahead!!!! “Not so fast”, you say. Yogi had another saying that is important to ponder here, “When you come to a fork in the road, take it.”. It’s all fine to know where you want to go but if you don’t have a road map it’s still a big challenge to get there. Business planning is the road map.

Getting your senior managers on the “same page” is facilitated by having a business plan that all participate in and understand. I’m not suggesting you have to hold a 5-day meeting with the management team to develop a 100-page business plan. What I do suggest is that key objectives and milestones that lead to your company’s major objective need to be defined and shared with the management team. If you were a developer of a new building or a shopping mall, you certainly would not start working on the project without a blueprint to know what the end result needs to look like.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 17 -

Personal Note: In one company I worked for, our underlying theme was to “improve earnings per share”. It started with the CEO and flowed throughout the company. You heard this theme in every part of the company as you met with department managers. It was a positive reinforcement of improving productivity, increasing revenues faster than the expenses, leveraging acquisitions, and cutting out waste. We were very serious about it and our stock price reflected it. The business planning that came out of this theme established the road map by which we would accomplish our major objective of “improving earnings per share”. Many tactical and strategic initiatives were identified and launched as you might expect. For example, each of the internal support departments went about identifying how to reduce their expense as a per cent of revenue while improving department services. Sales focused on how to boost sales of our more profitable product lines. Operations focused on efficiency and ways to improve productivity. The CEO focused on buying companies that helped improve earnings per share. All of us took a hard look at waste in areas where expenses could be reduced without decreasing quality or levels of service. These business plans led to an increase of more than 3% in EBITDA (earnings before interest, tax, depreciation, and amortization) in 12 months, , , tremendous improvement. The key point is that each department manager developed a business plan that supported the company’s major objectives, , , it all comes back to defining where you want to take your company.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 18 -

Let’s take one example of what I mean by business planning. Let’s say it is mid-March and a strategic objective for your company is to eliminate $20 million in expense by the end of the calendar year. One approach would be to pull your senior managers together and give each of them a quota, , , their “fair share” of the targeted expense cut. It’s easy, simple, and takes only 20 minutes of your time to deliver the message if you deem everyone’s share is to cut 10% of budgeted expense between now and the end of the year. Another approach is to empower your managers by facilitating a business planning meeting where you discuss the need to cut $20 million by year-end and why it’s so important. Then you empower the team to identify specific cost saving opportunities and to develop the plans (road map) to achieve this key objective. As CEO you could simply tell them to make it happen. However, empowering them and getting them fully involved increases the odds of achieving success, , , significantly. By the way, if you need $20 million in cost savings, you better target $25 million. Some things just won’t happen as planned. The point to all of this is to focus, refocus, and focus again. When you have all your managers reinforcing your objectives with one another, big things are possible. It is well worth the effort and has a much better outcome than simply “giving an order”. Once you have your business plan “road maps” in place and your teams executing them you’re on your way. Inspect to validate critical elements are on course and to determine alternative actions as necessary. Communicate progress and reward achievements. OK, so much for emphasizing business planning. There is one more key element you need to be aware of as you define your company’s key objectives. Do you know where your company is today? If you haven’t taken some time to consider the “state of your company today”, then do it now. It may change the thoughts you have about what you believe your strategic initiatives need to be. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 19 -

C. Where is the company today? Take time to do a brief “state of the business” evaluation. Be sure to identify what you and other senior managers see as your needs, challenges, critical initiatives, etc. You can approach this step in a couple of ways depending upon the size and makeup of your company. Assess the situation with your senior department managers or wait until you have your CIO on board. Remember, this and the other exercises are intended to help quantify what the issues are and what the current management team believes to be the key priorities of your company. This information will benefit your CIO so he can focus on the most important issues right out of the gate. If your company is in the beginnings of a turnaround situation, the immediate issues are more tactical in nature and need quick attention, , ,there may be a few fires burning. If the company is in a more mature state, the CIO’s focus can be a bit more strategic. When evaluating the “state of the company”, describe your perspective of the status in the following areas and any additional area you think might be helpful: - IT support - IT ability to deliver business value - IT focus on the true priorities of the business - IT reliability in supporting our business - Strengths and weaknesses of the IT support team - Uptime (system availability) - Technology gaps - IT track record in completing projects successfully - User perspective of the IT department - Strength and maturity of the current IT staff - Strength and maturity of other department managers - Keys to IT success Sidebar: This part of assessing the state of your company was intentionally placed after you defined the major objective and strategic objectives of the company. Often, I find that senior management teams focus so much on where they want to be that they lose sight of identifying where they are. By going through the exercises in this sequence, you will quickly determine if that’s the case in your situation. The more you can quantify the goals, objectives, and the status of where you are, the more effective a solid CIO can perform for you.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 20 -

II. How Important Is Technology in Your Company? “Extremely important!”, you say. Well, that’s probably true or you wouldn’t be reading this material. However, we need to break it down a bit and try to be a little more specific. The reason – it has a major bearing on what you need in your CIO. In order to get a great match, you need to know the relevant importance technology plays in your business. Let’s look at some examples. In the air traffic control business or the Amazon.com business, technology stability is critical. They have to have 7 days a week, 24 hours a day uptime (24 X 7) or they have major problems, even life threatening implications in the case of air traffic control. In a small physician clinic that depends on technology primarily for billing and accounts receivable, a certain amount of downtime is acceptable, , , not desirable mind you, , , but acceptable to the point the company does not spend money to create systems and network redundancy to guarantee 24 X 7 uptime. Even a large hospital dependent upon all kinds of technology will often choose to take a risk rather than pay for redundancy to guarantee 24 X 7 uptime of many of their hospital technologies. There are many considerations when you start thinking about, “How important is technology in meeting company objectives?” As we discuss these, it will bring you closer and closer to being able to define your ideal CIO candidate. There are essentially three categories of technical need a company has when understanding the role the IT organization needs to fulfill: A. Strategic B. Operationally critical C. Supportive There are probably many variations to these categories but when we discuss these three I think you will get my point.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 21 -

A. Strategic Strategic technology needs are usually required for companies that have significant growth plans or are expecting to transform (sometimes called reengineer) themselves to adapt to changing market conditions or other dynamics. A company planning significant change or growth needs a CIO who can take company goals and objectives and translate them into a technology vision that supports the needs of the company – both for the present and the future. Strong planning skills and considerable experience in transitioning an IT organization to adapt to significant growth are important attributes of a CIO who joins this type of company. Having a senior manager who understands the evolution and challenges the company will go through as it incurs major change can be very valuable. It will be absolutely critical to have a leader in place who can anticipate the needs and can plan the projects necessary to position the technology resources to support the changes at the right time. Positioning too early is not cost effective; too late could destroy your chances of success in achieving your major objectives. This CIO needs to have a solid track record in being able to manage an IT organization capable of handling many projects concurrently and proven that his organization can deliver them successfully. Excellent communication skills will be needed to communicate the IT vision required to support a dynamic company and in building an IT organization capable of supporting such change. A company with strategic technology needs should look for a strong experienced CIO.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 22 -

B. Operationally critical I place the air traffic control example in this category. The emphasis is on guaranteed uptime of the technology. Manufacturing organizations, banks, and other companies that have a critical reliance for online information fall into this category. A company that has an “operationally critical” reliance on technology also needs a strong, senior IT manager with considerable experience. This is especially true if the organization is expecting to make changes to critical technologies of the company. A manager who knows how to implement reliable support processes and build an organization that can implement change without creating business disruption is essential. There are a lot of good technical managers out there, but those who have skill and experience in handling “operationally critical” businesses are limited. A sound understanding and experience in key management skills should be evaluated, including: - Business understanding - Change management process - Data Center operations - Data center security - Applications security - Systems and network redundancy - Planning - Project management This CIO has to build a team that understands the critical nature of systems uptime. The business depends upon it.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 23 -

C. Supportive An organization that needs supportive help from their technology may not need as strong of a CIO. I go back to the sections that discuss the need to understand your business as it exists and where you’re trying to go. If your company is running pretty smoothly and not making a lot of changes, there is a good chance what’s needed is a solid programming manager or technical infrastructure manager. There is a big difference in a technical support manager and a Chief Information Officer. I view the need for a true CIO to be one that requires more strategic thinking, planning, prioritizing, and building an IT organization capable of handling dynamically changing business needs. If your company expects high growth or needs to make substantial changes in the IT organization, you probably need a CIO. A company in “maintenance” mode can usually operate effectively with a good technical support manager to manage functional components of IT. The key in determining if your need of technology is supportive is to take the time to evaluate your current status and planned objectives. A key idea I want to emphasize is: “Do not simply fill the position!” Your best chance of success with a new CIO or IT Manager is to understand your business support needs as well as you can before filling the position. Hiring the right skill and experience for the position will help you achieve your objectives. It’s just as bad a mistake to over-hire as it is to under-hire. Hiring too high a level for the need will probably end up in the manager leaving early, maybe even before you reach your major objective. If this happens, it makes it more difficult for a lower level, but appropriate level manager to follow in the footsteps of a much stronger leader. Hiring too low jeopardizes success in reaching your goals and can become very costly by having to react to changes as opposed to anticipating and planning for them as you would expect from a much stronger manager. Define what you want to accomplish, determine where you are today, and develop a short profile as to what your ideal candidate looks like in skill and experience.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 24 -

Obviously, the more skill and experience you need the higher the cost. While we are on this subject consider for a moment the old saying, “You get what you pay for.” It is true in this case. If your company has huge challenges for your technology leader, don’t nickel and dime the situation. Pay for a proven CIO who can come in and take charge of your technology challenges and put you and your other managers at ease so you can focus on your business. It will give you significant returns and peace of mind. A CIO literally impacts every person in your company in some way. Find a good one who understands IT’s role is to provide business value for your company and you position yourself to make excellent strides. CAUTION, , , there are many IT managers who have a “CIO” title on their resume, but they haven’t truly managed at a CIO level. They just have the title. There is a big difference in a manager who can come in and deal with any type of situation, deliver real business value for your company, change the support culture of the IT organization, or build a successful IT organization to support a fast growth company. This person operates at a CIO level. A real CIO comes in, sizes up the situation and quickly gets ahead of the power curve. He or she assesses the situation proactively, develops a plan of attack and gains senior management’s agreement, , , and takes care of the IT support business. This is much different than what you will find with most IT managers who operate at a lower level. In the next chapter, CIO or Technical Manager, I provide a Skills/Assessment Matrix to help you develop a profile that will assist you in defining your ideal candidate. One last time: - Determine where you want to take your company and when. - Define where you are today and the issues a technology manager will have. - Quantify your immediate objectives for technology support. By doing these simple steps, you will cut through the hiring maze. If you have these three pieces of information in the beginning, it’s going to help you quantify what you need and find a much more capable manager for your situation. You’re also going to position your new manager to move much faster and more predictably in achieving your objectives.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 25 -

III. CIO or Technical Manager? As we just discussed, there are significant differences in company situations and needs. There are also big differences in management and leadership capabilities. A person capable of piloting a 30-foot sailboat probably isn’t qualified to handle a luxury cruise ship. A sailboat can be handled single-handed while a cruise ship takes considerable more coordination, organization and management skill. Sailboat pilots just need good technical skills. Sound familiar? This section discusses the differences between a technical manager and a Chief Information Officer (CIO) and provides advice on how to look at your situation to select the right fit. In addition you will see that there are varying degrees of skill and experience with each type of individual. The Skills/Experience Matrix included in this section will assist you in identifying the attributes that are most important for your company. In this publication I refer to the CIO as a senior level executive capable of taking full responsibility for all of a company’s technology. This type of senior manager can deal with strategic or tactical issues equally well and will start transitioning the company toward more strategic issues quickly. His focus will be to work on things that benefit the company the most for the long term. A. Every company does not need a CIO Let me get right to the point here. A CIO as discussed in this document is a strong technology resources leader capable of taking charge of the technology support issues of a company. He can manage any situation that might come up in a company.

A CIO can leap tall buildings Sorry about that, , , but seriously, a true CIO will be able to take the toughest situation and through skill and experience be able to systematically manage through the situation. CIO’s know how to get things done and how to transform a dysfunctional IT organization to one that supports a company effectively and creates tangible business value for the company. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 26 -

A true CIO becomes a partner of other executives in the company, , , most IT managers do not achieve such status. A CIO begins managing an IT organization systematically: - Conducts an IT assessment Quantifies business needs and issues Identifies the IT organization’s capability and capacity - Quantifies the IT support work and organization required - Identifies and prioritizes key IT initiatives - Develops a technology strategy driven by business need - Communicates the strategy and gains senior management agreement - Develops a realistic and achievable budget - Develops a capable and appropriate IT organization - Incorporates change management processes to help his team succeed - Coordinates and focuses technology resources - Motivates the IT staff - Gains client credibility by delivering projects successfully - Communicates effectively to all This is quite a lot and not everything by any stretch that a solid CIO will do for you. For an experienced CIO, it won’t matter if your company needs to have its technology “fixed” or if you are planning significant growth. A strong CIO will have all the attributes and skill to support your needs. A technical manager will not be as capable in these areas and will most likely lack skill in some of them. This might be acceptable depending upon your need. If your company is stable and in need of a “supportive technology” organization as discussed earlier, it will probably be more cost effective for you to go after a strong Infrastructure Manager (strength in hardware, networks, and telecommunications) or Business Applications Manager (strength in business applications and programming). Let’s break it down a bit. A centralized company relying on technology mostly for a few company developed business applications and is in maintenance mode should look at some type of Programming Manager. Conversely, a company with several distributed offices requiring heavy telecommunications and networking support and has stable business applications should look for a strong Infrastructure Manager. The key phrase in each of these examples is “maintenance” or “stable”. The needs grow exponentially if your business has a dysfunctional technology organization (needs a turnaround), or if your company is planning major change or growth. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 27 -

This is not to say that a capable IT manager who doesn’t perform at a CIO level can’t have a positive impact on your company if there is a lot going on. The difference will be in how quickly and systematically the challenges are met and how effective the manager will be in organizing and focusing his team on the key issues of the company. Strong CIO’s will be able to quickly assess the situation, identify a 90-day critical issues list and get those things focused on while he begins working on a strategic IT plan. Planning ahead while doing “first things first” is part of what you’re paying for in a CIO. A junior manager will focus more on the immediate issues and be more reactive. In my opinion, when your company needs a CIO, you want a mature, business oriented leader who has more business insight and stronger organizational and operational skill than technical skill. Just as in the example of the Captain who manages a large luxury cruise ship, the skill he needs require more management, coordination, and leadership than technical. A Captain does not have to know the intricacies of running the engine room, but he needs to be able to understand when there is an engine room issue that might impact the operation or safety of the ship and have the resources in place to deal with it. A CIO deals with higher level issues and knows how to prioritize and organize responsibility, , , then delegates the responsibility and holds his people accountable. A small stable company in maintenance mode that is focusing on primarily business applications development needs to have a strong Business Applications Manager (programming background). A stable company focusing on primarily providing computer connectivity to departments or remote offices needs to have a strong Infrastructure Manager (network and telecommunications background). A company with both sets of issues and in the midst of change or significant growth needs a Chief Information Officer. And if you have a situation that needs to be “turned around”, , , better find yourself a real CIO.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 28 -

B. What are the differences? To illustrate the differences between an experienced CIO and Support Manager, I developed a Technology Leadership Skills/Experience Matrix.

A blank copy is provided in the Appendix. You can use it to develop a manager profile or assist you in evaluating a candidate, , , or maybe to evaluate a current IT manager. The tool lists three manager types – a CIO, a Technical Infrastructure Manager, and a Business Applications Manager. Each skill or experience element has a relative scale defined of what I have experienced is needed in each manager type. This is not to say a Technical Infrastructure Manager who I show typically having a low rating of a “1” in a business application skill cannot have strength in this area. Finding an Infrastructure Manager who has business application knowledge is a plus, , , but you don’t find it all that often. Most IT managers tend to focus where they have experience, , , they focus on what they know. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 29 -

Let’s take a closer look at the Technology Leadership Skills Matrix.

Technology Leadership

Skills / Experience Matrix ( Relative Value Scale for Leader Types ) Skill / Experience Business Management Business needs assessment Strategic planning Develop a technology vision to support company needs Budgeting Presentations to senior management & board members Presentations to department heads Technology initiative prioritization Organizational development Define an organization to support business objectives Staffing Staff focus Training program to fill expertise gaps, build depth Staff development and motivation Performance planning and reviews Career planning Motivation Infrastructure Hardware knowledge Network knowledge Telecommunications Network applications (E-mail, Intranet, fax server, etc.) Data Center operations Support Desk Systems security Systems recovery Business Applications Business and/or industry knowledge Programming change management process Backlog management & communication Research and development Software application support / Support Desk Software release process Project management Growth Management Anticipating, planning, and positioning for growth New Company merger and acquisition (if required)

CIO

Technical Infrastructure Manager

Business Applications Manager

3 3 3 3 3 3 3

1 1 1 1 1 2 2

1 1 1 1 2 2 2

3 3 3 3

2 2 2 2

2 2 2 2

3 3 3

1 1 1

2 1 1

1 1 1 1 2 2 1 2

3 3 3 3 3 3 3 3

1 1 1 1 1 1 1 1

3 3 3 3 3 3 3

1 1 1 1 1 1 1

3 3 3 3 3 3 2

3 3

1 1

1 1

Ratings are: 1 = low/weak ; 2 = average; 3 = high/strong Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 30 -

The completed matrix example on the previous page is filled in with relative strengths and weaknesses for comparison purposes to show the skill areas one type of manager needs to have strengths in versus the other two types of managers. Any manager you work with will be different so this scale should not be taken literally for all managers, but it will help you understand the tendencies of each of the functional manager groups. As you go about the process of defining the ideal candidate for your situation, this “relative strength matrix” can be a helpful reference in preparing to interview candidates. One use of the tool is to inventory a candidate’s skills using the matrix. C. All CIO’s are not equal As we just mentioned, every person is different. Even identical twins in the same job will have different strengths and weaknesses, preferences and dislikes, etc. As you work through a process of identifying your ideal candidate you will want to focus on the key skills that are most important to succeed in your specific environment. More on this in the chapter titled, Successful CIO Traits.

A true CIO has a well rounded balance of management, leadership, and communications skills with a solid technology support perspective. With any candidate you should validate their credentials. All too often, you will see CIO level responsibilities in a resume but you have to verify the person’s description of himself. It’s very easy to tell a good story in a resume. Check them out and develop your interviewing skills with questions that help you determine fact from fiction. The chapter titled, The Interview will give you plenty of material to help in this regard. Some CIO’s are more “well rounded” than others. You might have success if your candidate lacks certain management skill or experience as long as it’s not a critical skill required to do well in your business environment. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 31 -

The important issue with this is to be able to evaluate a manager’s skills based upon what you need for your company. A CIO who has managed an IT support organization successfully for a $30 million company has different capabilities than one who has led an organization supporting a $1 billion company. In fact, most who manage such a small IT organization are probably not operating as a true CIO would simply due to experience. But here is a key point you need to consider. You might find an excellent CIO candidate in a $30 company, , , just because this is where he is today does not speak to his total experience and capability. You won’t know until you interview and evaluate the person. A CIO who has managed an IT turnaround situation has skill and experience that will be extremely valuable if you have such a situation. A manager who has not experienced an opportunity to “fix” an IT operation may experience some of these challenges for the first time. Such a learning curve can be quite expensive for your company. A CIO who has conducted an IT due diligence for a new company acquisition understands the sensitivities and risks in acquiring a new company. The CIO who has not gone through this process has the challenge of learning about it. Are you getting the idea? When you find a candidate who has strength in all the important skill areas you need for your company, you had better lock the person down. In my experience they are actually few and far between. It still comes back to the early parts of this document. The key to your success is in understanding your company situation as it exists today, where you want to take the company, and the key business issues you have. When you gain a clear picture of what you need, you’re ready to create an ideal candidate profile and start lining up interviews. One last comment A CIO who has strengths in the areas you believe important in getting the job done is worth a lot. When you think of the gains a strong CIO can make in leveraging productivity, reducing expenses, and improving operations, , , the payback is significant. It’s the same way you look at sales. You want a sales superstar who is so good you have to pay him a lot of money because of the sales results he can achieve. Find a capable CIO who matches up well with your needs and treat him the same way. It will pay dividends for you and your company. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 32 -

IV. Successful CIO Traits As with any senior management position there are many skills and experiences that are beneficial, even necessary, for a CIO to be successful. Now that you have identified where you want to go, where you are, and the immediate business issues you have it is time to focus on the skills and attributes that are important for a CIO to succeed. You have also been able to reflect on your specific situation in order to develop an idea of what you believe is going to be important for your company. At this stage, you should know if you need a strong experienced CIO “capable of leaping tall buildings” or someone a little less capable. The next step is to take a look at specific traits needed in a CIO. Some of these traits may exist in a more junior manager and all traits will not be strengths in every CIO candidate you encounter. The trick is to create a profile of an ideal CIO candidate for your company and then find someone who matches it. There are certain traits, skills, and experience that are important for a CIO to succeed. Every situation is different but a few key skills will serve a manager well when trying to provide your company with CIO-level support. As you read this section, think about the business issues your company has now and expects to have in the future. Print a blank Skills/Experience Matrix form from the Appendix so you can rate each skill as a high, medium, or low need for your situation. This will help you create a CIO candidate profile. Keep in mind, , , your company situation has many dynamics, including: - Business maturity - Technology organization maturity - Technology stability - Company culture - Centralized or distributed - Department and operational needs - Company plans - Many, many other things to consider

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 33 -

There is no guaranteed method to fill a CIO position. It’s a high risk situation because of the amount of impact a CIO has in a company, , , probably why there tends to be such a high turnover rate with CIO’s.

To some extent any new manager hire is a risk. It’s hard to know if a candidate will succeed until he is actually in the job. However, you can minimize your risk by spending time to define what you need. Key CIO traits needed for success are: A. Assessment B. Strategy C. Planning D. Organization E. Implementation F. Leadership G. Communication Let’s start looking at each of these major skill sets. A. Assessment When a CIO assesses the situation he needs to focus primarily on the business. His focus will be at a fairly high level to determine material issues and needs that exist and what his organization can do to support the business. His key objective will be to determine what the IT support organization should work on to best support the company’s goals and objectives. A CIO’s focus on the technology will only be to the extent to understand key issues that exist in the IT department and the capability and capacity of the IT organization. He does not get into the details of the technology.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 34 -

There is a big difference between a business assessment and a technical review. At this point, a new CIO wants to understand material issues that require IT support, , , he does not have time to learn all the intricacies of the technology nor does he need to. I break assessment into four key parts. 1. Documents review 2. Senior management review 3. Department reviews 4. IT support review Personal Note: I’ve led the IT due diligence in over 40 company acquisitions. In each case, it was always important to start the discovery at the top with senior management first. You do not really want to talk to anyone in the IT department until you get your client’s perspective of what they are trying to accomplish and how well the technology organization is supporting these goals. Your client’s perspective is the most important and should influence your IT priorities more than anything. It is important to start with senior management, move to the department managers next, and visit IT last. Interview your client first and you will be much more objective, plus their perspective provides valuable insight that will help you in your IT department review. A CIO must understand the business side first before he can determine if the IT organization is “in sync” with and supportive of the business. Let’s go through each assessment focus area. 1. Documents review There are several documents a CIO will need to review before interviewing people. Some of these documents may have information that creates questions you need to get answered when he interviews key people in the company. We will go through the major documents quickly in this publication. Our purpose here is not to discuss the details of an IT assessment but to touch on the high points. Additional material is provided in the book, IT Assessment: the key to IT success. Company strategy – If the company has a formal company strategy, you want to give your CIO a copy to read. If not, any type of strategic planning documents will be helpful. Department strategies – Any of the departments who have developed strategic plans to support the company’s plan will be worth reading. Their plans may have IT dependencies to achieve them. If so, the CIO will need to know about them. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 35 -

Organization charts - The organization chart clarifies the management hierarchy and scope of responsibility for the executives as well as the department managers. It will also point out the relative size of each organization. This can be meaningful in the department review phase. Company Profit and Loss Statements (P&L’s) – These reports show revenue and expense trends of the company and how well the company is tracking to the business plan set at the beginning of the fiscal year. P&L reports provide information as to how the company looks at revenue and what the primary revenue sources are. They also point out the major expenses of the company and you can see the trends of each. This financial data helps a CIO understand the financial picture of the company and can indicate potential risks and/or opportunities. Bottom line here is that the financial reports help set the stage as to where the company is today and potentially identify challenges or questionable trends that need to be better understood. The IT organization’s P&L reports will provide specifics in IT spending, obviously something your CIO needs to become very familiar with. The more a CIO can understand the company’s current financial situation and the specific challenges it faces in achieving its major objective the better. It helps set the compass to “true north” as he begins to learn more at lower levels. Contracts – Don’t we all love to read vendor contracts? No, we don’t, , , but to determine if the company is software compliant along with many other things, the CIO needs to read the contracts that relate to technology. He can opt to delegate this task to the extent he is comfortable he knows what he has. Capital expenditure plans – Company plans to purchase capital items may identify IT support work. An astute CIO wants to be aware of this. Current and planned projects – Your CIO will need to be aware of any project underway or planned that will need IT support, , , better for him to review everything and make the determination himself as to how much IT is impacted. There are more documents to be reviewed but I think you get the point of this part of an assessment, , , a CIO has to learn what the support need is and what his organization can do. Much of the information is in documents he will review. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 36 -

2. Senior management review It’s difficult, if not impossible, to hit the target if you don’t know what the real target is. Yes, you can bring a solid manager in and turn him loose to fix and improve your technology, but he won’t be as effective unless he understands the business needs and issues of your company. A true CIO is going to identify most of the IT support targets from senior management and department manager interviews even though you may not have formally defined and documented them. A lower level manager may not have the maturity and experience to do this. When looking for your CIO, ask how he/she will go about defining the technology support initiatives for your company. If you don’t get a sense that this person is going to understand the big picture first and then work down to the technology organization, then you may have the wrong candidate. A strong CIO focuses technology resources based upon business need. A couple of thoughts are worth remembering:

“IT organizations exist to support the business.” “Add new technology only if there is business value.” With these thoughts it’s easy to see that the CIO role is to support the business first, last, and always. There is no other agenda. Too often, a company hires the candidate who talks a good game only to find out that his initiatives miss the target and do not provide real value for your company.

“Shame on you!”, if this happens. I believe it’s important for senior management to be intimately involved in the selection process of a CIO, , , and especially to provide early guidance and inspect his initial support strategy recommendations. It’s appropriate to give a CIO plenty of slack but you should make it your business to stay abreast of where he’s headed in supporting your company and inspect to insure that it fits company plans. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 37 -

No one expects a CEO or CFO to conduct an IT assessment and come up with an IT strategy, , , that’s why you want to hire a CIO – right? But, it’s easy enough to review a CIO’s recommendations before you start spending money and impacting people in the company. You need to gauge whether a CIO’s recommendations are client and business driven or technology driven. If your CIO can’t articulate reasons for doing things in a business light, there is a good chance the strategy is technology driven. A good CIO has strong assessment skills and will be able to tie every IT initiative recommendation to a business need or issue. In addition, every recommendation will be cost justified and discussed in business terms that you can understand, , , not in technology acronyms and “techy jargon”. What should be included in a CIO’s business assessment? An IT assessment (remember it’s actually a business assessment) should identify several things. First and foremost it will identify material business needs and issues that require IT support. Most of this comes from client interviews, observing, and conducting research in areas that help the CIO learn about the company. Secondly, it will quantify IT support capability and capacity which tells the CIO what his IT organization is capable of doing. From all of this there will be risks and opportunities. The CIO will need to eliminate or minimize risks, and the company will want him to go after the opportunities he discovers. Once a CIO knows what’s going on and the status of things, he can develop an IT support strategy, , , it would be very difficult to develop a meaningful support strategy without a good assessment. We won’t go into the process details of an IT assessment. Additional information is provided in IT Assessment: the key to IT success if you want to learn more.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 38 -

The executive or senior management review part of the CIO’s assessment is to gain an understanding in how the company sees itself and what it wants to achieve, , , to answer, “What are your goals and objectives for the company?” Starting the assessment at the top with senior management allows the CIO to hear from the people charged with full responsibility of the company’s welfare. Senior management usually has a pretty clear idea about where they want to take the company and what they expect to achieve. They may not have all the parts identified that get them there but most executives at this level can articulate what they believe to be the company goals and objectives. Ask a senior manager about “his business” and he can usually talk all day, even though he may not have a formal company strategy in place. I can’t emphasize enough that a thorough IT assessment begins with a clear understanding of senior management’s perspective of the business, its objectives, current status, challenges, etc. Learning the global perspectives and direction of the company sets the stage for the next levels of interviews with department managers and the IT organization. 3. Department reviews Interviews with senior management have identified the departments and how they fit into the company. They have also named the department managers and should lead you to the departments that need technology support the most. The CIO should begin with departments with the greatest dependency on technology. The CIO will formulate specific questions and observations needed for each department interview based upon research and senior management interviews. The objective of this level of the assessment is to understand the business of each department to an extent and their specific needs, challenges, problems, capabilities and dependencies in technology. This should include both current and future needs. A good CIO learns about the business and translates what he hears about the manager’s business issues and needs into IT support issues.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 39 -

The CIO also needs to “size up” his customer. In order to communicate effectively in the future it will be important to understand as quickly as possible the individual strengths and weaknesses of all departments of the company. Why is a department assessment needed? Several reasons actually. For example, if the company is about to experience considerable growth, part of the CIO’s responsibility will be to help support each department’s challenges during growth transition, , , such as adding people, supporting office relocations, improving productivity, etc. that might take place. I’m not suggesting the CIO has all the answers; , , he will not. But, if you can find a CIO who has been through major growth he will have valuable insight on the planning and preparation needed throughout the company to support it. The same principle holds true in the event major technology changes are needed. In order to implement significant technology change, the receiving departments have to be prepared. The department review helps the CIO begin the evaluation of how well positioned other departments are to absorb new changes. Much will be based upon how competent the department is with the existing technology and how mature the employees and managers are in being able to go through major change. Change can be difficult. If significant growth or change is in the forecast, the CIO has to determine the abilities of departments to receive and adapt to the changes as well as his own team’s ability to implement them. The department reviews are the first opportunity to begin making this assessment. These reviews provide an opportunity of validating much of what the CIO hears in the executive review. It also gives the CIO an opportunity to verify whether or not the department understands its role in the company and is operating in sync with the stated business objectives of the company.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 40 -

A few questions a CIO will want to get answered will be: Is the department happy with IT support? If not, , , why not? Is IT support focused on your priorities? If not, , , why not? Is IT support responsive to your needs? If not, , , why not? Does the department have the technology they need to do their jobs? Are there business needs and issues that require IT support? How strong is the department in its understanding and use of technology? How well positioned is the department to undergo major change? Are there critical issues that need to be addressed? Who are the major client managers and what are their “hot buttons”?

The department interviews along with the executive interviews and research now provide the CIO with significant material for the IT support review.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 41 -

4. IT support review After the CIO understands the missions, issues, concerns, and challenges of the executives and department managers of the company, he has the background needed to review and assess the technology organization. It is not uncommon for the business groups and the IT organization to have different perspectives, sometimes referred to as an “IT–Business Disconnect”. It is the CIO’s job to understand where the differences are and why they exist. In today’s business environment there are huge demands on everyone in the company, especially the managers. If there are significant differences in perspective of how well the IT organization is performing, the CIO must: - Quantify any differences that exist - Determine why they exist - Identify steps that will close the gaps Companies lose millions of dollars in lost productivity when an IT–Business disconnect occurs. If there is a gap, the CIO must find it and do what it takes to eliminate the gap, , , it is not the business side’s responsibility to do this. If your company needs a CIO, you want someone who knows how to identify such a gap and what to do to close the gap if it exists in your company. Sidebar: Typically, I have found the following scenario exists in most companies. The departments express a need for better technology. They describe a technical organization that tends to be unresponsive and unreliable in delivery of technical support and new technology products/services. The technology organization describes itself as an organization that is overworked with users who are incompetent, who have unrealistic expectations, and do not appreciate IT efforts. They believe IT support is doing a good job and focused on appropriate priorities for the company.

This type of disconnect is more the norm than the exception. If this is what you hear, there is a gap. Many studies suggest over 50% of IT organizations are out of sync with their company. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 42 -

A strong CIO will recognize and address this problem. In an IT support review the focus of the CIO is to understand: 1. Is the IT organization in sync with the business? 2. Is IT properly focused on business needs and issues? 3. Is the IT organization responsive to the client? 4. Is the IT department working in a client service mode? 5. Are processes in place to help IT deliver support successfully? 6. Is the technology stable, secure, and appropriately available? 7. Are the business applications addressing the needs of the company? 8. What is the capability and capacity of the current technology resources and is it sufficient to support the needs of the company? Obviously, the level of understanding needed takes more time than this initial assessment. These early findings, however, will highlight the areas that need immediate attention or more research. The overall objective of the reviews is to size up the business needs and issues and size up the capability and capacity of the IT organization to support them. The better the CIO is able to quantify the demand and supply of your company’s technology support business the better your chances are of success. Being able to assess the needs of the company is a critical skill the CIO must have. He must be able to identify what that need is so that the goals and objectives can be met. I’m sure you have heard, “Round pegs fit round holes.” Believe it!! A capable CIO will identify the holes that need filling and incorporate efforts into a strategy that focuses the right type of resources on the appropriate priorities to solve the issues that need solving for your company. Just as a capable CIO can and will focus IT resources to work on the appropriate priorities, your task is to insure you get the right CIO for your particular situation.

Finding the right IT management resource is essential for your success.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 43 -

B. Strategy The second key skill trait a CIO must have is strategy. A CIO must take the information learned in an assessment and develop an appropriate IT strategy to support the business. It is up to the CIO to create a vision and set the direction for your company’s technology focus. Being able to understand the goals, quantify the issues at hand, and anticipate the needs of the future are the first priorities, , , it’s why assessment is the first skill trait we talk about. Transferring these items into a vision and a logical progression that positions the company now and into the future to achieve what it must to succeed is critical. Creating the vision requires someone who thinks “long term” versus a reactor of circumstance. In my experience there are three types of managers. A company may have all three, but I believe the CIO should be more strategic. 1. Reactionary Manager - This type of manager is good at dealing with day to day issues that pop up but lacks strategic thinking. Most technology support managers fall into this category. 2. Troubleshooting Manager - This type of manager is the one you assign the most difficult situation, , , like calling in Red Adair to fight the oil well fire. Most companies need a Red Adair at times but you should work hard to prevent the fires. 3. Planning Manager - A manager who anticipates and plans tends to have much fewer surprises to deal with. Reactionary and troubleshooting managers end up costing the company much more when they are in high level positions. A CIO needs to be a planner, , , not the reactionary or the troubleshooter. It is important for a CIO to develop an IT strategy for your company, , , even if you do not have a formal company strategy. Let me repeat this in a different way, , ,

The absence of a company strategy is no excuse for the CIO to not have an IT strategy.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 44 -

If you conduct an assessment and then develop and propose a strategy to support the business needs and issues you discovered, , , and senior management agrees to your plan, , , there is no way for IT to be out of sync with the business.

This is absolutely critical to prevent an IT-Business disconnect!! As a new CIO in a company, I always preferred to break an IT strategy into 2 or 3 parts: - First 90-120 days immediate strategy - 6 to 12 month tactical strategy - 18 to 24 month long term strategy A 90-120 day strategy is pure tactical and only used in a new company situation with critical issues that are essentially “on fire”. Immediate action is required. I’ve used this in a couple of companies I joined and in many acquired companies where there were significant IT problems. An immediate strategy is like “dialing 911”, , , we have major problems and must focus on them immediately. The 6 to 12 month tactical strategy is intended to focus on important issues. Once a CIO focuses his staff on these, he begins work to develop the long term strategy. These projects start to take on the flavor of the CIO’s leadership and interpretation of the company’s issues and needs. The 18 to 24 month long term strategy includes project initiatives that tend to require more investment in effort, time and money to accomplish. They also tend to have bigger benefits. I personally prefer to keep a long term strategy to 24 months or less because technology changes so fast. If a company requires a 5-year IT strategy, we will develop one but the further out the plan goes the more general it becomes. In most company situations, I developed tactical and long term strategies. An immediate strategy is only used when you have a train wreck that needs to be fixed quickly. Another technique that I use consistently is to develop a visual presentation of the technology plan for senior management, department managers, and the IT staff. This presentation provides a “10,000 foot level perspective” which helps you describe the overall plan and aides your audience in seeing how major projects fit with one another. In other words, part of developing an IT strategy is creating a vision of where you are headed. Developing a clear picture of the targeted initiatives and empowering capable people will achieve significant results. An example of an IT strategy is included in my book titled, IT Strategy: align your IT vision for business value. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 45 -

Part of the reason you break strategy into two or three parts is because it’s impossible to go in as a new CIO and learn all that you need to know in a few weeks. It takes months to get a complete grasp on the needs of the company, its issues, and the strengths/weaknesses of the business departments and IT organization. In the meantime, there are some key issues that need to be addressed right now, which is why a CIO focuses quickly on short term support issues. Once the short term plan is approved and the IT staff is focusing on these short term issues, he begins work to develop a long term strategy. A CIO’s specific plans will change somewhat as he learns more about the company and the dynamics surrounding your business. What should you expect to receive in an IT strategy presentation? Do you remember the lesson for giving a presentation? 1. Tell them what you’re going to tell them. 2. Tell them your message. 3. Tell them what you told them. This principle holds true for communicating a technical vision. It’s important to establish the strategy and reinforce it constantly so all know where technology is headed and have an opportunity to assist in its progress or challenge it as needed. That’s right, , , a CIO’s job is to develop an IT strategy recommendation and present it to senior management. It is the CEO and CFO’s job to review, challenge, and ultimately approve the strategy. A CIO puts a “stake in the ground” about what he thinks the IT organization should do to support the company based upon his assessment. The senior management team has the right and obligation to challenge and question his recommendations. Senior management must understand, agree and approve the IT strategy, , , otherwise there is a high likelihood there will be an IT-Business disconnect. You have no real strategy until senior management approves the strategy and agrees to support and fund it. Up until this point, all you have is a strategy recommendation. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 46 -

An IT strategy should include several high level points for senior management: 1. Major objectives and benefits 2. Key project initiatives 3. Major risks and/or challenges 4. General sense of the cost requirements 5. Rough timeframes Remember, when a CIO presents a strategic IT plan proposal, he is at 10,000 feet, not at a detail project planning level. His cost and timeframe estimates will be estimates, not specifics, , , unless of course the senior management team requires more precise detail. As with anything, a new manager has to address certain things first. In general, any company’s technology has to have some basics in place to effectively develop and implement strategic projects. Sidebar: An example would be in how you go about building a new house. You have to have a solid foundation first, then an infrastructure to support activities of home living such as plumbing and electrical wiring. After these things are in place, the builder can go about finishing the inside to make it look like a home. Technology requires the same type of solid foundations and infrastructure to work effectively for a company and that’s supportable. You can visualize this in a graphic I created called the IT Project Priority Hierarchy. The bottom three foundation layers need to be solidly in place before you go after high profile projects in the top two layers. Without a solid foundation, you will ultimately have breakage with cost and support challenges far greater than if you take care of these “foundation issues” up front. Everyone wants their CIO to focus on the Strategic Projects at the top of the pyramid due to the huge benefits they offer. He better place priority on the lower level foundations. Personal Note: In one company we knew we were going to buy many companies as we consolidated a portion of the healthcare industry. By understanding this, we focused aggressively in doing things in the bottom three foundation levels of the pyramid to position ourselves for the heavy lifting work ahead. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 47 -

C. Planning Strategy is defining a vision of what you are going to do. Planning is developing how you will get it done. Planning is not a natural skill for most people. It’s easier to react than to take the time and put forth the effort to plan, , , and most people take the easier route. They react. An effective CIO must have solid planning skills. You can do a great assessment and develop an eloquent strategy that gets lots of approval and positive comments; but if your organization can’t develop the detail plan, you won’t get much accomplished. There are also managers who become “stuck” and can’t act because they become overwhelmed or they are so detail oriented that they freeze up and can’t move forward. It was Andrew Jackson, 7th President of the United States who said, “Take time to deliberate; but when the time for action arrives, stop thinking and go in.” General Jackson won the Battle of New Orleans against overwhelming odds of a much more powerful British Army because of his strategy and planning skills. When a CIO’s strategy is approved by senior management he has to coordinate his management team to develop and execute the detail plans that will “win the battles”. Planning requires the ability to: • Define tasks required to complete key initiatives • Identify appropriate resources to do the job • Understand resource allocations • Estimate appropriate timelines to complete tasks • Budget Planning skills are a core competency of a capable CIO.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 48 -

D. Organization A CIO needs strong organization skills. He must be able to organize thoughts and resources into logical approaches to address issues and solve problems. There are several areas pertaining to organization, including: - Organizing the issues & determining priority - Organizing and coordinating resources - Building an effective IT organization Often, a company has adequate IT resource capacity to address its business needs but poor organization delivers much less than the IT department is capable of. Personal Note: I joined a company and its IT organization had two distinct client groups. The primary client included internal company departments that used the technologies built and supported by IT. This part represented 96% of the revenue contribution to the company. The second client was a group of 42 external “Turnkey” clients who licensed the software we developed and supported for our internal client business. Turnkey contributed 4% of our company’s revenue.

Our internal clients considered IT support to be free whereas Turnkey clients had a strong appreciation for the cost of IT support. The other dynamic was that Turnkey clients were very happy while our internal clients were unhappy with IT support. Because of the relative ease in working with the Turnkey clients (4% of the revenue), the IT support organization was inappropriately focusing about 70% of its support resource to them. As a new CIO, I had to first recognize that this was occurring. Then, I had to identify the issues that were the most important for the “real client” and refocus our IT resources to the appropriate business issues of our true client, , , the internal departments. Our company had an appropriate capacity of IT resource; it was just misapplied. I ultimately closed the Turnkey business. This was a hard decision but necessary to change our support culture quickly. We simply couldn’t afford to run a Turnkey business while positioning our company for significant growth of our primary business. You should expect your CIO to be capable of quantifying the issues, focusing the resource on the right priorities and developing an organization to support your company. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 49 -

E. Implementation Can your CIO deliver the goods? Implementation is the tough part. At a CIO level, implementation takes form through others and not actually by the CIO himself. The ability to identify, plan, and organize is not enough if the CIO does not know how to get things done through his team. A CIO must understand the principles of project management and have in his personal arsenal the skills to empower others to get the job done using a sound project management methodology. In addition, there are going to be a lot of issues and many things to be accomplished so a CIO has to be able to multi-process. If your CIO candidate can’t provide examples that he can deliver what he says he will do, move on quickly. You will want to verify he has a track record of leading an organization that delivers projects on time and within budget, , , and most importantly, delivers business value. You want your CIO to be able to provide leadership that delivers technology products and services in a predictable, reliable, and cost effective manner. If he does not use project management tools and disciplines in the IT organization’s implementation of technology, you will not receive these results. Project management discipline must start with the CIO. If it does, the entire IT team will follow his lead and incorporate a project management style into their day to day efforts.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 50 -

F. Leadership A CIO must lead. There is too much depending on the IT organization for your company to succeed. Senior management should look for a leader in a CIO. There are several key traits in a leader: Organize with clear definition of roles – A CIO must focus the IT staff by placing each employee in the right position and assigning them responsibilities that will achieve success for the company. Let me explain by using a football play graphic below:

A

C

B

D

In the example, the offensive line is represented by the green circles; the opposing team’s defense is represented by the red triangles. Part of the leadership role of a CIO is to define the position and responsibility of each player. In this example, players A & B are assigned to block one defensive area while player C has to handle one on his own. Each player has to have confidence that every player will take care of his individual assignment. Breaking rank to “fix” an area breaks down the organization and causes problems. I’ve seen several IT organizations fail because there has been no clear distinction of roles and responsibility. Performance Planning & Review – Performance plans define the responsibility and performance reviews tell your employees if they are doing a good job. IT employees need both to succeed. Training – A good leader prepares his team by providing the training and tools needed to do the job.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 51 -

Empowerment – The ability to empower people in the IT organization helps you get more accomplished. People who feel empowered and appreciated for their talents and efforts will go long distances for you and achieve more. I believe this to be the most important trait in leadership. Appreciation – Everyone needs to be appreciated, and you receive back what you give. It doesn’t take a lot to appreciate your staff and IT employees will achieve more when their managers show genuine appreciation for their efforts. Motivation – Leading others requires motivation. The CIO should lead by example and motivate the team in ways that reinforces positive behavior to achieve success in supporting the business. Personal Note: In the Marine Corps, I learned quickly that I could complete a job by ordering my subordinates to do the job. It was harder, but the most valuable lesson I learned was that the job was accomplished with higher quality and much more thoroughly when the men were motivated and empowered to do the job. Without “buyin” or ownership, the results are lower.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 52 -

G. Communication The next trait a successful CIO must have is strong communication skills. He must be able to communicate with business managers in business terms and with IT staff in technical terms. The technology staff and IT clients need to hear from their CIO. A good CIO will set up communication processes to keep everyone updated about: • IT’s mission and strategy • The importance of the IT support role • Project status • Feedback of successes • Areas of improvement needed • Business value IT is delivering A CIO sets the tone by implementing communication processes throughout the company to keep everyone aware of what’s happening in IT support and the benefits that are derived from it. It is very important for IT employees to see their CIO as a strong leader; they see this by how he communicates more than any other trait. The CIO is the bridge between the business managers and the IT staff. He has to be able to translate mission and purpose into an effective technology vision and help the IT organization understand its role of helping the company realize its goals. The CIO has to break the global vision down into components that the IT staff and business managers alike can understand. Effective communication is a key part in an IT organization becoming a partner with the business units of the company. Without these partnerships, an IT organization will have limited success.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 53 -

V. Defining Your “Ideal” CIO So far this publication has been focused on defining what you need for your company and the traits you should look for in a CIO. There are several variables associated with working through a process to define the exact IT management need for your company. In this section we will assist you through a process of defining an ideal CIO candidate. This approach should work for most situations and can be tweaked as needed. In general, CIO’s come from one of two technical backgrounds. Usually the candidate’s background is heavier in either systems infrastructure (hardware and networks) or business applications (programming). As an IT manager’s career evolves and he takes on more responsibility, his technical skills will decline. This is appropriate as he needs to focus more on planning, leadership, and processes required to succeed in an IT support function and let his staff be the technical experts. In my experience most CIO’s come from the business application side simply because of the business acumen you gain in this part of IT support. A CTO (Chief Technical Officer) tends to come from the infrastructure side due to the technical nature of his management responsibility. Depending upon your company’s specific needs and what you want to achieve, you may want someone with one type of background over another. Personal Note: My early technical background was in business applications. I have always felt that I could work at whatever level of detail I needed to within business applications due to my experience in that area. To deal with systems infrastructure issues I always had to depend upon a strong technical resource that I could count on to focus on the systems side of our support business. I was comfortable in understanding the issues and questioning recommendations so that I clearly understood the risk, benefit and cost implications of infrastructure projects. I developed comfort in being able to delegate and empower others in an area where I lacked depth in expertise and experience. A practical CIO will know where he lacks skill and experience and will insure that he has these areas covered by competent staff or external resources he can rely upon.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 54 -

How do you go about defining the ideal CIO candidate? I believe you should go through a couple of exercises: 1. Go through your company’s business needs definition and rate each. 2. Go through Successful CIO Traits in the last chapter and rate each.

To assist, I have included a chart on the next page that will help you develop a composite of the ideal manager for your situation based upon what we have discussed in this publication. Rate each element with a 1 to 5 rating with 5 being the greatest need. As you go through this simple process, highlight the 4’s and 5’s and you will begin to see the traits that are needed for your CIO candidate. Taking 5-10 minutes to do this will help you think about interview questions and have an idea of what you are looking for when you start looking at candidates. This is a highly subjective process to be sure, but it will assist you in your thought process in determining what is important for your company at this given point in time. The better you are able to define your need the better you will be in finding a candidate who matches up well for your company, , , plus you will be able to ask better questions in an interview.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 55 -

My Ideal CIO Company Needs Item Rating Technical Infrastructure Business Applications IT Project Management IT staff improvement IT staff motivation IT assessment IT vision & strategy IT planning IT change management processes Network services IT predictability IT support Strategic projects IT leadership IT communication IT financial understanding

Skills / Experience Needed Item Rating Assessment Strategy Planning Organization Implementation Leadership Communication

State of the Company Stable & mature Stable Stable but expecting major change or growth Needs improvement Turnaround situation

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 56 -

VI. What Should You Pay? If your company needs a Chief Information Officer, you are looking for someone to become part of your senior executive team. A CIO is in a position of the company to improve the productivity of all departments in your company. He can also facilitate the development of new products and services that differentiates the company and makes your company more competitive. The CIO is also the only manager in your company who can potentially reduce the operations cost of every department within your company. A strong CIO gives your company real leverage and when these things happen your company becomes more valuable. To say a CIO is “worth his weight in gold” can quite often be an understatement. A good CIO communicates with business managers in business value terms, not in technology jargon that you won’t understand. He recommends projects that will provide quantifiable business value, his recommendations are business driven, , , and they are always cost justified. His organization is always in sync with the business because he doesn’t work on things unless senior management has agreed to them and is willing to support them. When a good CIO spends money, senior management knows about it and understands why. Sounds pretty basic doesn’t it? Unfortunately, it’s not how most of the world operates. If you are looking for a CIO, you have an opportunity to establish some guidelines that will make it a much more beneficial relationship with your IT organization. Pay the right person well and create as much incentive for this role as you would any other senior management role, especially if your company is dependent on a smooth running technology. Get a good one and it will make everyone’s life much better and your company more profitable and successful.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 57 -

Typical CIO compensation packages take on some or all of the following attributes: - Base salary & benefits (in the $150k to $300k range or more depending upon size of company and levels of responsibility) - Annual bonus tied to company achieving business plan (20% to 50% of annual salary is common) - Stock options or equity ownership - Extra bonus incentives based upon specific initiatives - Signing bonus in cash or company stock - 401k with company match - Executive “top hat” program to supplement 401k contributions up to x% allowed - Club membership Not all of these perks are always in place, but we are seeing more and more attention paid to strong CIO’s every day. In many companies the CIO is one of the highest paid managers on the team due to the contribution opportunity and leverage he has to help the company achieve its goals and objectives. A solid CIO will pay the company back many times over by doing the things that improve productivity, reduce cost, and help differentiate the company. No longer is a CIO considered to be a manager who just needs to manage a network and provide Data Center services. A CIO needs to be a business manager first with strong technical insight to help move the company forward in a predictable manner. Personal Note: In every company I have been part of I have ultimately been able to reduce the cost of IT as a per cent of revenue. As the company grows and you are able to do more with the IT resources because of better focus, this savings goes directly toward increasing EBITDA (Earnings before interest, taxes, depreciation, and amortization). Better IT products and services provided to the employees of the company improve productivity allowing them to accomplish more work in a day. A CIO is a key investment, , , you need to make a good choice and if you do, the benefits to your company can be huge.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 58 -

VII. Where to Look How do you find that ideal CIO candidate? Good question, , , they are not walking around all over the place. You know what you’re looking for if you have done your homework and a couple of exercises in earlier parts of this document. So, with a concise profile, now it’s time to start looking for your candidate. Here is how I would go about it. Change the process to fit your specific needs. 1. Develop a short, 1-page bullet list of attributes you need for your company. 2. Contact your network and let them know what you’re looking for and ask them to let others they know about your need. You probably aren’t surprised by how large your 2-level network is. 3. Contact previous CIO’s that you have worked with or know about and seek their help. 4. Go online and place an executive listing on Executive Search systems, or similar services. Only do this if you are prepared to deal with resume submissions, , , it’s a waste of everyone’s time if you aren’t. 5. Contact an executive search firm. 6. Place an ad in the local papers as a last resort. (Not recommended because you will get lots of inappropriate responses) I place the executive search firm well down the list only because you have an excellent chance of finding a quality fit within your own network of resources first. Give this option a couple of weeks before you require paid assistance. Larger companies often use an executive search firm first and that’s fine if you prefer to go this way. It all depends upon your company’s situation and needs. One other advantage of using an executive search firm is that a good one will do a nice job of filtering out candidates so you only have to spend time with a few. The key in using an executive search firm is to be as specific on what you are looking for as possible. Sound familiar? I listed the newspaper ad option but do not recommend it unless you have someone available to sift through hundreds of resumes. Also, with today’s internet services, fewer people are using the newspaper ad route for executive placements.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 59 -

VIII. The Interview Remember an earlier message, “Do not simply fill the position!!”. Spend time to find your ideal candidate, , , it will pay off with big dividends. We will not spend time on how to interview; I assume you already know how to do that. The interview is the final critical part of getting the right manager for your company so I want to emphasize a few key points. Hopefully, you have developed a picture of what you need for the company and the skills and experiences that are most important in an individual. In the interview it’s up to you and the other managers who interview your candidates to validate that they have these assets and experiences to bring to your company.

An interview is a 2-way process!! A strong CIO candidate will be interviewing you and your company as much as you are interviewing him (or her). He will have very good interviewing skills so it’s important to be prepared. First impressions count for a lot, , , for both parties. Prepare for the interview: To get the most out of an interview you need to be prepared and know exactly what you want to ask a CIO candidate. In addition, you may want to coach others who will interview your candidate on key things you are looking for so they can help you in your final evaluation. Here are some key things to consider when preparing for your interviews: Prepare key questions to evaluate the fit in skills and experience that you need. Include open-ended questions that encourage the candidate to talk about himself and his experiences. Ask for examples that exhibit business understanding and successes. Describe a situation and ask how the candidate would go about handling it. Prepare to describe your company, its mission and objectives, and what it takes to be successful. Review the candidate’s resume and identify areas that need clarification or that you want to discuss more to understand the candidate’s background, experience and qualifications. As you think about your interview one of the things you want to try and uncover is how this person will fit into your management team. You need a partner running IT who will be open, honest and has the same values as you and the rest of your team. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 60 -

The Interview – what you want to learn: As an executive of the company, there are many important things you want to learn in a CIO candidate interview. My list follows; you will undoubtedly have other items: - Is he a self-starter? - How does he work under pressure? - Does he focus IT based upon business need or focus on technology? - Is he organized? - Does he have leadership traits? - Do you understand him or does he speak in technical jargon? - Does he understand what business value is and the importance for IT to deliver tangible and quantifiable business value? - How well does he work with a team and with other managers? - Can he motivate an IT staff? - Can he build an effective and appropriate IT organization? - Can he demonstrate he delivers projects on time and within budget? - Can he develop a vision and strategy that fits the business need? - Is he a planner or reactor? - How well does he conduct his interview of you and the company? - Are his assessment skills strong? - How mature are his budgeting skills? - Has the candidate accomplished feats similar to issues you need to solve in your company? - Has he managed a comparable IT organization in the past?

Verify credentials Always verify the credentials the candidate gives you. It’s easy for a good talker to sell his capabilities and you will waste a lot of time and money if they prove to be exaggerations. A solid candidate will welcome you checking out references and you owe it to the company to do so. Many a candidate has been hired to discover later that the information on the resume is not accurate.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 61 -

IX. The Offer Every offer of employment to a manager, especially an executive manager like a CIO should be a formal letter from his new manager. It should include: Effective date of hire or starting date Title and responsibility Who he/she will report to Starting salary and other compensation (bonus, etc.) Stock options or other equity offer made Indication of healthcare benefits, 401k, etc. Vacation allowed Moving allowance, if applicable Any specific benefit or issue discussed when negotiating the package Any specific issue you want to tie to the offer Your offer letter is probably the first formal thing the CIO candidate will see from his new company. It’s important for it to be organized, to the point, and comprehensive in the content you include. This letter offers you an opportunity to make a very positive impression on your new executive, , , it is important to get started positively. Your letter should also state a deadline by which you expect a response so everyone can close the interview and offer process. What I like to do is call the candidate and discuss the points that are in the offer letter and suggest that the letter will be mailed today. This adds a personal touch and gives the candidate a “heads up” so you can move forward. When you do this, it is important to be enthusiastic so your candidate understands how excited you are for him to join the team. Great things are going to happen for both of you if you have found the right candidate for your company. This call also gives you more opportunity to get to know your new manager and for him to get to know you, , , it will help expedite things once he starts his new job. On the other side, your new CIO may ask for you to provide some things before he arrives so he can hit the ground running. It’s up to you if you want to do this or you can suggest he wait until he starts and can get settled in a bit.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 62 -

X. Ready, Set, Go! If you are a CEO or CFO and you are still reading, I am truly impressed. I debated long and hard while writing this material as to whether it was too much for the audience I’ve targeted it to. This is the final chapter. You have selected a CIO and he is about to start his first day. It is extremely important to start on the right foot. As a CIO, I’m going to give you the list of information that I would want to receive the first week at my new company. The better you can prepare for his start the faster your CIO will be able to proceed and start getting things organized for you. Just as it was worth spending a little time to define specific needs of your company and what you’re trying to accomplish, you should take time to prepare a quick orientation for your new CIO when he arrives, , , it will help him get off to a fast start. The following is a list of the items and information I would want that helps a new CIO get started quickly in a new company: 1. Company • Mission • Business challenges / issues • Industry segment, competition, opportunities 2. Organization • Organization charts and key managers in each department • IT Employee list – name, position, expertise, salary information, insight into strengths and weaknesses • Process for defining and prioritizing major initiatives 3. Hardware/Systems • Vendor platforms / operating systems supported and how many • Life expectancy • Replacement strategy • Copy of a site disaster recovery plan • Networks (Local Area Networks, Wide Area Networks) 4. Business Applications Software • Location • Supported by (internal or outside vendor) • Primary customer/department and an estimated number of users accessing each major business application Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 63 -

5. Existing and Planned Projects • Large-scale projects – re-engineering replacement, new systems, etc. • Mid-range enhancements • Maintenance backlog • New business development needs • Productivity enhancements 6. Operational and Capital Budgets • Investments needed to maintain normal growth • Major investments needed • Evaluate operating budget as a percentage of revenue • Evaluate technical expense required to support each business service • Current year budget – both operational and capital • P&L reports (12-month trends and YTD actual to budget) for the company and the IT department 7. Status of where the company is today. Senior management needs to identify the needs, problems, critical initiatives, and key priorities that need immediate attention. At a minimum, address the status of the following areas. • IT support • Technical services from 3rd party vendors • Network connectivity • Security concerns • E-mail • Uptime (system availability) • Internet/intranet capability & access • Business applications • Reliability • Mission critical feature/function that exists or is needed • Technology gaps • IT track record of delivering new projects on time and in a quality manner • User perspective of the IT department • Strength and maturity of the current IT staff • Strength and maturity of non-IT department managers You will not have all the information I’ve listed and that’s ok, but a diligent CIO will work hard to learn as much as he can as quickly as possible. Reaching into the organization to get the material that helps get everyone off to a fast start is highly recommended. Even if you do not have some of this information, your insight or perspective will be helpful. The point is that you want to bring your new CIO up to speed as quickly as you possibly can. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 64 -

XI. Summary A CIO is a key manager in your company and one of the few executives who can positively impact every manager and department in your company. A strong CIO offers your company real leverage if you understand and take advantage of it. As such, you must find a capable manager to lead your technology resources. In addition, you need to find someone who has the same business values as you and your management team and can become a true business partner. When business units and IT click by being on the same page with another, special things can happen. The key to finding the right IT leadership fit for your company is to conduct a self evaluation of what your company needs and the state of your company situation. Use the Technology Leadership Skills/Experience Matrix to help you define what you need and to evaluate the candidates you end up interviewing. Your selection will have a major bearing on the success of your company so take time to work through your selection process and give thought to the interpersonal skills of a candidate as well as his or her technical knowledge. At the end of the day, a CIO’s ability to focus resources on the business issues is far more important than his technical knowledge and expertise. One last thing. You have heard me talk about “business value” quite a bit. I define business value very specifically to be: - Increase revenue - Decrease cost - Improve productivity - Differentiate the company - Improve client satisfaction An experienced CIO focuses his IT organization to deliver business value. He understands the leverage potential technology offers a company, but that it’s not very useful if it does not produce business value for the company. Find a CIO who focuses on your business and partners with your management team and you have a formula for success.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 65 -

APPENDIX – A Mike Sisco Resume

MICHAEL L. SISCO SUMMARY

Information Systems executive with demonstrated leadership in acquisitions, technology assimilations, and support management. Strong focus on key business issues and profitability with consistent record of exceeding business plan objectives. Expertise in strategic planning and team building skills. Proven record in IT organization turnaround, development and growth.

PROFESSIONAL EXPERIENCE U.S. HEALTHWORKS 1999-2000 Senior Vice President / Chief Information Officer Established a tactical technology operations plan to increase technical services to users, create corporate support credibility, and to position this $100 million revenue company for acquisition growth. Developed a strategic technology vision to support the company’s business model and to differentiate it from competitors. Created an operations plan and staffed the organization to achieve all objectives. In the first year, over $250,000 was saved while improving the technical services to the company. • Restored technology support credibility by focusing resources to the key issues of the company, communicating our direction, and delivering on commitments. • Managed the stabilization of a 70 clinic office location supported by a frame relay wide area network. Migrated the service provider for cost savings and improved service. • Refocused the organization (staffing levels and priorities) and the technical projects to be accomplished to provide appropriate technical resource focus on true business needs and to eliminate waste in projects that did not bring real value to the company. • Developed a 2-year IT strategy to improve systems stability and to enhance communications connectivity within the company and outside the company to position for future business automation projects. • Established e-mail, intranet applications, and connectivity to the Internet for the company. • Successfully managed the technical acquisition assimilation project of 9 new clinics. HEALTHFIELD, INC. Chief Information Officer

1996-1999

Responsible for the technology of a comprehensive home healthcare company providing nursing services, pharmacy, and durable medical equipment (DME) sales and services. The technical infrastructure was stabilized, the business applications were enhanced, and a selection of an enterprise home healthcare product was implemented to eliminate 7 legacy systems.

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 66 -

MEDAPHIS CORPORATION 1990-1996 Senior Vice President of Technology (1992 - 1996) Vice President of Technology (1990 - 1992) Directed the technology support, development and assimilation activities of all Medaphis Physician Services Corporation technologies. Managed all staffing, planning, financial management, due diligence and assimilation of new company technologies. IT budget grew from $2.5 to $13.5 million as company revenues grew from $30 million to $550 million. •

• • • • • •

Managed an IT staff of more than 150, providing programming support, application research and development, support desk, hardware & network support, and technical assimilations for up to 25 different technologies utilized by more than 6,000 end users. Restored technology credibility to the organization within six months of joining the company by identifying key issues and organizing to address the appropriate business problems. Developed and managed all technical support for significant growth of the business revenue from $30 to $500 million in five years. Conducted the technical due diligence on 35 companies with 43 separate technologies, successfully eliminating over 20 acquired technologies. Successfully focused on cost effective assimilations while maintaining staff stability that protected the business during transitional change. Successfully migrated the company's national print center and 80 percent of the programming support from Richmond to Atlanta without disruption to the business. Effectively reduced the programming and technical support costs from 7.7 percent of revenue to 2.8 percent over 3 years while improving the delivery of services.

HBO & COMPANY, Atlanta, GA 1983-1990 Vice President of Systems (1989 - 1990) Director or Support (1988) Manager of IFAS Technical Support - Southeast (1986 - 1987) Manager (1983 - 1986) Directed the support and installation of all HBO product lines for the Eastern United States. Also managed national application and technical support of HBO & Company's MEDPRO, IFAS, and GALAXY legacy systems consisting of more than 200 systems. • Developed and implemented a successful employee and client migration plan from multiple legacy systems to the company’s newly announced STAR systems. • Improved client and employee satisfaction in an environment that had a national challenge of a $2 million loss against $6 million in revenues contributing to increased revenue and profit over and above company projections. • Reduced client accounts receivables over 60 days from $250,000 to under $10,000. • Managed the development and delivery of the first PC application for HBO & Company. • Improved the financial performance of all national products managed: IFAS - Improved profitability by $4 million on $6 million in revenue over 2 years. GALAXY - Attained profitability for first time in its five year history. MEDPRO - Improved profitability by 20% on $2.5 million in revenue. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 67 -

BDS, INC 1981 - 1982 Chief Information Officer IBM 1976 - 1981 Marketing Representative (1980 - 1981) IBM Systems Engineer (1976 - 1979) EDUCATION BS Accounting, 1976, University of Tennessee at Martin Associate of Arts, 1974, Columbia State Community College MILITARY U.S. Marine Corps (1969 – 1973)

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 68 -

Appendix B Sample CIO Job Description

Chief Information Officer Job Description

The Chief Information Officer (CIO) will provide technology vision and leadership for developing and implementing information technology (IT) initiatives that improve cost effectiveness and business development in a constantly changing, competitive marketplace. The CIO will lead the company in planning and implementing enterprise information systems to support both distributed and centralized business operations and achieve more cost beneficial enterprise-wide IT operations. Major Duties and Responsibilities This position provides strategic and tactical planning, development, evaluation, and coordination of the information and technology systems for the company. This position is designed to ensure the continuous delivery and operation of integrated operations and administrative information systems. The CIO is responsible for the management of multiple information and communications systems and projects, including voice, data, imaging, and office automation. The CIO reports to the CEO, CFO or Executive Board of the company and supervises the organization’s information systems staff. The CIO is responsible for coordination, facilitation, and consultation with all company management staff on information systems, communications, and business operation systems initiatives. The CIO will ensure that the company is current with the information systems standards set by company. The CIO serves and participates proactively with other members of the company’s senior management team in developing and executing strategic plans to optimize the use of information technology in support of company objectives. The CIO also participates in policy and decision making at executive management level regarding resource allocation and future direction and control of proposed information systems. PRINCIPAL ACCOUNTABILITIES Enterprise-wide Planning •

Participates as an integral and active member in the strategic planning process of the company.

•

Develops, coordinates, guides and maintains IT systems strategic and operational plans in support of the overall company mission and business strategy. These plans define a vision for meeting current and future information and technology needs for the company, while ensuring alignment and integration of IT with the overall vision, mission, and values of the enterprise. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 69 -

•

Develops and maintains enterprise systems architecture, defining standards and protocols for data exchange, communications, software, and interconnection of network information systems.

Leadership •

Provides advice on evaluation, selection, implementation and maintenance of information systems, ensuring appropriate investment in strategic and operational systems. Negotiates all IT acquisition contracts, soliciting involvement and participation of other management team members as appropriate.

•

Provides responsive advice, counsel, education and service to the company concerning IT issues and trends in the IT industry.

•

Communicates IT plans, policies and technology trends throughout the organization, including management groups and professional staff.

•

Determines pertinent information required by management in making effective decisions. Ensures that the gathering, processing, distribution and use of this information occurs in a timely, accurate and cost effective manner through ongoing review and education programs at executive, management and user levels.

•

Promotes and oversees relationships between the company’s IT resources and external entities (e.g., government, vendors, researchers, auditors, and other organizations).

Management and Oversight •

Approves, coordinates, and controls all projects related to selection, acquisition, development, and installation of major information systems for the company.

•

Develops and maintains an appropriate organizational structure capable of supporting the information needs of operating entities through appropriate and cost-effective information technology.

•

Develops and maintains corporate IT policies and standards relating to the acquisition, implementation, and operation of information technology and communication systems.

•

Develops and maintains an enterprise-wide data model and data dictionary.

•

Negotiates IT service level agreements with user organizations and monitors IT systems performance to assure service levels are being met. Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 70 -

•

Researches and evaluates alternatives for the enhancement or re-engineering of IT. Develops, coordinates and manages the incorporation of enhancements to and re-engineering of company systems, in keeping with the needs and objectives of the enterprise.

•

Provides quality service to end users in needs analysis, solution recommendation, vendor selection, implementation, training, and post-installation support.

•

Ensures that enterprise information systems operate according to internal standards, external regulatory standards, and legal requirements.

•

Develops and enforces policy and procedures to ensure the protection of enterprise IT assets and the integrity, security and privacy of information entrusted to or maintained by the enterprise.

•

Develops and maintains an enterprise-wide business recovery plan to ensure timely and effective restoration of IT services in the event of a disaster.

Human Resources Management •

Responsible for the recruitment, development, motivation and retention of assigned management and staff conforming to budgetary objectives and personnel policies. This shall be accomplished through the consistent practice of sound human resources concepts, thereby achieving teamwork, employee security, mutual respect, maintenance of the highest level of professionalism and a stake in the company’s success.

•

Ensures appropriate training programs for the organization are in place to attract, retain and develop the key personnel required to support information services.

Financial Management •

Develops and maintains the annual operating and capital budgets for company information and technology systems operations consistent with programmatic plans and established financial guidelines. Responsible for monitoring IT activities and costs as related to the overall utilization of resources required to meet programmatic operational requirements.

•

Develops and maintains corporate policies and standards aimed at minimizing costs related to the acquisition, implementation and operation of IT systems.

•

Maintains contact with IT suppliers and maintains knowledge of current technology, equipment, prices and terms of agreements to minimize the investment required to meet established service levels. Evaluates alternatives, Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 71 -

performs appropriate cost benefit analysis, and recommends solutions that minimize costs commensurate with acceptable risks. •

Reviews company hardware and software acquisition and maintenance contracts, soliciting involvement and participation of other management team members as appropriate. Develops, when possible, company master purchase or lease agreements for hardware, software, maintenance and telecommunication services.

QUALIFICATIONS Education Requires a bachelor's degree in Computer Science, Business Administration or a related field. Experience At least 10 years of progressive experience in managing functions and departments dealing with information handling, work flow and systems. Three or more years of direct management of a major IT operation is preferred. Two or more years of experience in ________ industry is essential, preferably in IT planning to support strategic business goals. Experience should also include substantial exposure to both in-house and shared or outsourced systems, multiple hardware platforms, and integrated information and communications systems. Knowledge, Skills and Abilities Comprehensive knowledge of: •

Business principles and techniques of administration, organization, and management to include an in-depth understanding of the key business issues that exist in the _____ industry. These include, but are not limited to, knowledge of strategic and operational planning, personnel administration, federal, state and local laws, marketing, financial and cost analysis.

•

Data processing methods and procedures, and computer software systems

•

Equipment and software characteristics of various computer systems and a general understanding of system features and their integration capabilities

•

Systems design and development process, including requirements analysis, feasibility studies, software design, programming, pilot testing, installation, evaluation and operational management

•

Business process analysis and redesign

•

Applicable external regulatory requirements and their application to the IT area Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 72 -

Proven skills in: • Written and verbal communication • Negotiating with vendors, contractors, and others • Budget preparation and monitoring • Planning and organizing • Management and leadership • Interpersonal relationship building Demonstrated ability to: • Relate to all levels of the user community • Be a team player that motivates and educates other team members • Plan, implement and support systems in a complex IT environment • Set and manage priorities • Comprehend complex, technical subjects • Translate technical language to lay audiences • Link and apply complex technologies to business strategies • Create and motivate behavior change

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 73 -

Appendix C Technology Leader Skills/Experience Matrix

Technology Leadership

Skills / Experience Matrix ( Relative Value Scale for Leader Types ) Skill / Experience

CIO

Business Management Business needs assessment Strategic planning Develop a technology vision to support company needs Budgeting Presentations to senior management & board members Presentations to department heads Technology initiative prioritization Organizational development Define an organization to support business objectives Staffing Staff focus Training program to fill expertise gaps, build depth Staff development and motivation Performance planning and reviews Career planning Motivation Infrastructure Hardware knowledge Network knowledge Telecommunications Network applications (E-mail, Intranet, fax server, etc.) Data Center operations Support Desk Systems security Systems recovery Business Applications Business and/or industry knowledge Programming change management process Backlog management & communication Research and development Software application support / Support Desk Software release process Project management Growth Management Anticipating, planning, and positioning for growth New Company merger and acquisition (if required) Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 74 -

Technical Infrastructure Manager

Business Applications Manager

Notes

Copyright © MDE Enterprises, Inc. www.itmanagerinstitute.com

- 75 -

The Practical IT Manager GOLD Series of books and tools will help you manage your IT organization better. The processes and tools discussed in these publications are used by thousands of IT managers around the world to achieve more success. The series includes the following titles and more: - IT Management-101: fundamentals to achieve more™ - IT Assessment: the key to IT success - IT Strategy: align your IT vision for business value - IT Project Management: a practical approach - IT Asset Management: tracking technology assets - IT Organization: right-size your organization for success - IT Staff Motivation and Development: build a world class team - IT Budgeting: operational and capital budgeting made easy - IT Due Diligence: merger & acquisition discovery process - IT Assimilation: consolidating redundant technologies - What To Look For in a CIO: get more value from your IT investment “Every aspiring IT manager will, without question, benefit from your work.” Bryn Thomas - Philadelphia, PA “I am so thrilled to find a resource that addresses my needs as an IT executive. I’ve been looking for something like this for years.” Charise Simpson - San Diego, CA “Your publications get to the heart of IT management and provide practical examples not found in other books.” Dan Tankersley - Paducah, KY “The value of the materials is excellent and can be used by any manager in any field, even outside of IT.” Kenneth Wakati - Dar es Salaam, Tanzania “Mike’s experiences offer valuable insights on how to build an effective IT organization that can truly make a difference.” Judy Campbell - Austin, TX

MDE Enterprises, Inc.

“helping IT managers of the world achieve more success” www.itmanagerinstitute.com