The first order of business for new CIOs is to restructure IT so that it better aligns with the business. Key to this restructuring are the “business relationship executives” — persons well-versed in a business domain or market segment but also capable of building a business case for a new IT investment.
Business relationship executives can hold their own with business leaders but they are also knowledgeable about IT (and the processes of delivering IT). They can work across the architecture, infrastructure, application development and project management offices, ensuring those units deliver on their promises. Finally, they are are highly strategic and help shape IT demand with business leaders in their companies.
This plan to align IT and the business sounds simple enough. Restructure the IT team by having a centralized group to run operations (help desk and data centers, which are most likely outsourced to third parties). Likewise, have a centralized application development and project management group that reports directly to the CIO. The business relationship executive’s role will be to face off with each major line of business or business function. But there are challenges, including:
1. Defining authority.
How much authority over delivery should business relationship executives have? Give them too little, and they wind up as toothless account representatives making promises to their business peers that they cannot fulfill. Give them too much, and they wind up in the weeds putting out operational fires rather than staying at the strategic level.
For example, when Joseph Santamaria became CIO of the $12-billion electric and gas company PSEG, he inherited an IT organization that already had business relationship executives in place, but the structure wasn’t working.
“The [business relationship executives] were the one throat to choke for everything from demand shaping to project execution to operations,” Santamaria told me. “But these people struggled in their roles because they had too many priorities and rather then set strategy, they wound up fighting fires.”
To avoid this, be sure your CIO defines accountability over delivery carefully. The business relationship executives and centralized IT leaders need to be crystal clear on who is responsible for what.
2. Breaking legacy relationships.
Just because you put a new name on an organizational chart and tell your business peers that this IT person is their new business relationship executive does not mean that the new relationship will automatically work. Old traditions die hard, and if your head of marketing has always called Bill when she needs IT resources, she will continue to call Bill, despite the fact that her new point person in IT is Sally. For the business-relationship-executive model to work, the new relationship requires some care and feeding.
3. Identifying and communicating new metrics.
Most IT managers pride themselves on metrics: system availability, number of releases, lines of written code. When you move IT managers into a business-relationship-executive role, you are asking them to measure their work on something entirely different, including the quality of their relationships, their knowledge of the business as well as their development of a strategy. Those are amorphous, vague criteria, to which the business relationship executive will need to adjust. Be sure your CIO reviews performance measurement criteria with the new business-relationship-executive team so that they knew how they’re doing.
4. Growing your own.
Mike Jackson, CIO of chemicals manufacturer Celanese, describes the responsibilities of the business relationship executive:
• They build and maintain relationships with their key business counterpart;
• foster innovation both in the business they support and in the IT organization;
• keep their business executives informed about day-to-day operational matters;
• identify and deal with problems and conflict;
• organize and govern business projects that have a large IT component;
• collaborate with business counterparts on building a business case for new IT investments; and
• manage outsourcing partners.
Because finding blended executives can be challenging, it may suit your company to grow them on your own. To begin, create a company-wide program that rotates business people through IT and vice versa. In addition, launch a leadership-development program that has business leaders working together with IT people on real projects, ensuring that learning the business is a formal part of onboarding new people.
Most CIOs are in the market to hire a blended executive, and these rare birds are not plentiful in the market. Your IT team is facing a dizzying array of new requests from every corner of your business. The business relationship executive is critically important for a company to grow. If you haven’t developed people with these skills already, it is time to get started.
Martha Heller is one of the most widely followed voices on the role of the CIO. She has been a CIO magazine columnist since 1999, and is the author of The CIO Paradox: Battling the Contradictions of IT Leadership, published in October 2012. Martha is president of Heller Search Associates, an executive search firm that specializes in IT leadership positions.