Six steps to turnaround (and one prequisite)
To effect a turnaround, a CIO must make quick decisions that can have a significant impact on the business. This requires support from the top. "This is very much like a baseball game," says CKE's Chasney. "You're not managing game by game or inning by inning; you do it play by play. It is a paradigm shift that has to be supported by the CEO."
Moon says two of the primary reasons he took the CIO job at LeapFrog were that he reported directly to the CEO, and that his boss was very open to new ways of thinking and to taking managed risks. Moon meets once a week with the CEO for 30 minutes, during which Moon reports on what he is doing, how IT programs are progressing and on future projects. "He's 150 percent behind what I am doing," Moon says. "The CFO is tremendously supportive too."
But with the support from the CEO and other top executives comes higher expectations for using IT to rescue the company. "That means you have to set reality; you have to differentiate between fact and fiction," Deasy says. Otherwise, the CIO will continually fight battles over what can be done and what cannot, what needs to be upgraded or thrown out and built anew, and what should be done immediately or later. "Before you know it, you will have lost your chance to help the company," Deasy says.
Read on for six steps to help you meet the high expectations and accomplish a turnaround, distilled from CIOs who have done it.
- DELIVER QUICK WINS. Every CIO has to show the value of IT to the business, but a company suffering from bad PR, poor earnings and low morale is desperate for some fast returns. Typically, the turnaround CIO has only six months, maybe even less, to show that he has had an impact. After that, the honeymoon is over.
Long before Chasney joined CKE in 2000, he was director of systems development at Best Products from 1981 to 1985. There, he gained his first experience at turnarounds and learned a lesson he would apply in each IT executive job thereafter: All projects need to have a meaningful deliverable every three months. Best Products was suffering from an ineffective IT shop. Chasney determined that the IT staff was "wallowing in methodology", he says. "They were so bogged down in forms, structure and process that they couldn't see where they were at."
Chasney told the staff they were done with the development process and needed to go into production. Within three months, they delivered the online system of terminals throughout 1000-plus restaurants, which was the foundation for a business intelligence system that would deliver daily data to corporate headquarters on 25 performance indicators. The system also provided marketing data that measured sales of specific menu items after changes from advertising, promotions and the introduction of new items. Best Products' business partners and employees no longer viewed the IT shop as a nemesis or department that wasted money, Chasney says. "You have to deliver actionable items, such as business intelligence, right off the bat."
- FILTER THE NOISE. Often, it's hard to know what to do first in turnaround situations. Top executives, board members and IT managers all have their versions of what needs to be done to save the company. At Tyco, the suggestions came in spades, Deasy says. He calls the difficult job of prioritization "filtering out the noise". Yes, a common financial system was important to better track the $US40 billion company's finances, which were suffering. And, the 400 separate ERP environments probably needed to be consolidated into one.
However, most Tyco employees also weren't able to e-mail each other easily. "You don't wash the windows when the building is on fire," Deasy says. "We were a company in crisis and fighting for our survival, and we had to see what is important and what can wait. Does it make sense to want a common system? Yes, but probably not a thing to focus on when you can't communicate."
The challenge has been in determining how to allow the 115,000 Tyco employees who have access to e-mail to connect across 140 disparate directories. Deasy recognized early on that a single common directory was not pragmatic. His team settled on an identity information server technology that would synchronize the systems.
Another priority has been to consolidate the 140 separate networks, which connect 2140 sites worldwide, into what Deasy calls a "One Tyco" network. He plans to consolidate 80 percent of the networks by the year's end, leaving out businesses that already consolidated their networks internally. "Don't assume you have to slay the dragon for the whole company," Deasy says. "Why tie up those who are already doing a good job into the initiative?"
- ALIGN IT. Successful turnarounds require that everyone pull together. In his fifth week on the job at OfficeMax, Burdick called a three-day conference for the top 50 OfficeMax IT managers to map out where the company's IT operations should be in three years. Rather than leading the process himself, Burdick asked the managers to develop the three-year plan.
At the conference, Burdick also reported the results of a survey he had distributed to all 500 IT employees two weeks prior, asking how they felt about the direction of the company, the integrity of the management team and the openness of communications, among other things. Several employees provided up to three pages of typed comments, and one employee even listed managers whom he said did not believe in Burdick's team approach. Burdick says he mentioned the survey to the managers (minus specific names) and told them: "If you happen to believe that the team approach is a joke, I invite you to leave now."
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