Repairing the CEO/CIO disconnect - chief executive officer and chief information officer - Information Technology

Chief Executive, The, Nov-Dec, 1994 by Charles B. Wang

Are you on the bleeding edge, or just bleeding? Costly technology investments stand a better chance of success when coordinated by the CEO and CIO--two executives who often find themselves speaking separate languages. Here's how to translate.

Computing may be the key factor in corporate success, but as often as not it is the key factor in corporate failure. Using official figures and assessments by hundreds of chief executives, I calculate that as much as $1 trillion spent in the U.S. over the decade on information technology has been wasted. That approaches a third of the total amount spent, meaning $1 of every $3 the average business invested in IT has been lost.

Why the waste? The answer may be an ineffective relationship between yourself and your chief information officer. Do you recognize yourself in the following scenarios?

* When your chief information officer--regardless of title, CIO describes the job--comes to see you, you wish it were your CFO, your COO, or your human-resources vice president.

* Your CIO doesn't ask you what you want technology to do--it's simply a given that your company is going to get the latest and greatest, so there's nothing to discuss.

* Or perhaps your CIO doesn't speak to you at all, but--as is more than likely--reports to your CFO.

If any of these scenarios looks familiar, you should be seriously concerned. You may have sidestepped all that unintelligible talk of UNIX (which does not refer to neutered slaves in old gladiator movies), but at a price you should be unwilling to pay. If information technology is not a major part of your responsibility as the corporate leader, why is your company paying so much for it?

Computing is now a major cost of doing business. At a growing number of companies, it is the largest cost after personnel. The ostensible rationale: Information technology is not only as central to business as the wheel was to early transport, but it is also the engine driving that wheel. The computer is a decision-making tool, but it also creates the data upon which decisions are made.

Almost everyone subscribes to this holy writ today. However, many chief executives don't really believe it. They regularly turn their backs on the subject while spouting the common objections to a hands-on approach to IT, including:

Information technology is complicated. Yes, and so are finance, marketing, and long-range planning. Yet all of us can sit through highly detailed meetings rife with numbers. Why? Because we are convinced that understanding the numbers is key to understanding our businesses. Understanding information technology isn't?

Information technology demands expertise. So do finance and marketing, but only to a point. Most chief executives are hardly as expert in federal taxation as their CFOs are, nor should they be. We designate experts in diverse areas precisely to free us to lead our companies. Emulating their expertise would waste valuable time. We simply must be able to communicate with them.

CIOs speak technobabble, making communication virtually impossible. Maybe (and as the head of a major software company, I may be guilty of contributing to this problem), but chief executives who are promoted to run a subsidiary in Paris somehow immediately try to learn at least rudimentary French. And when a CEO moves from running a hotel chain to an airline, he or she always starts by learning airline nomenclature. Why is learning the language of information technology so different?

It isn't, but like it or not, we've been taught otherwise. Peter Drucker believes the problem will be solved when a new generation of business leaders takes charge--people who have grown up with computers. Whether or not this problem will resolve itself in the future, our dilemma is not 20 years from now. It is now, and it is serious.

The chief executive's disconnect from technology and hence from his or her own top technologist has critical ramifications. Technology-shy leaders tend to depend totally on their CIOs. "Here's money," they say. "Get us the best."

Few CIOs are technology-shy--that's why we hire them--and by nature, they love technology, especially that which some people call leading-edge. Often, this is what I term "bleeding-edge" technology, innovations so new and unproven they have not been widely used. This technology frequently doesn't connect to what's already installed, what your people already are trained to use, and what already has cost your company more than you might know from looking at the invoices, which leave out a lot.

Bleeding-edge technology is super-expensive. Not only have you lost the investment in training on the previous technology (multiply the hardware and software invoice costs by four), but you are looking at lots of what technology people call "downtime." This is like calling death a long nap.

Downtime can be fatal to any corporation. Think of your reaction when you finally get through to an airline phone rep, who tells you, "Our computer is down." A couple of doses of this, and you're bound to choose another carrier--and to wonder if the computer is ever down when it comes to scheduled maintenance of the air-safety systems. Downtime costs your company money or clients or both.