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| Sometimes, words fail. Consider the communications breakdown between the worlds of MBA and MIS. Ever since re-engineering refocused technology on processes that create and deliver goods and services to customersand no longer just on automating business functionsthese camps have struggled for a mutual understanding, a common language. The search has been painful. In listening to CEOs talk with CIOs, one is reminded of George Bernard Shaw's famous dictum: "The British and the Americans are two people separated by a common language." Or perhaps Humpty Dumpty telling Alice, "When I use a word it means just what I choose it to meanneither more nor less." The disconnect between the CEO and the CIO is potentially lethal. The business environment is being transformed from a national, industrial-based economy to a global, information-based modela sea change sometimes referred to as "atoms to bits." And it will require almost a mind meld between CEO and CIO to achieve. Based on my research and extensive conversations with people in both worlds, I have a proposal for how to get the two camps working together. But, first, it's important to run through some history, to explain the dimensions of the problem. The gap in thinking between CEOs and CIOs grew to Grand Canyonesque proportions for three solid reasons. First is history. The CEO almost assuredly rose through the non-I/T ranks. His certain knowledge of I/T concerns only its costs. Second is syntax. The CEO wants to talk about business outcomes and how they support the business strategy. The CIO wants to talk about technical aspects of the I/T function, using "architorture" terms like "client/server" and "TCP/IP." Third is orientation. The CEO wants to talk about "why" a business system is being proposed. The CIO wants to talk about "how" the system will be built. In other words, CEOs are focused on strategy, while CIOs are grounded in operating issues. The gap was very clear when I was recently involved in several CIO searches for Fortune 100-size organizations. Appropriately, all said that they most wanted candidates who possessed business strategy skills. Technology skills were way down the list. Nevertheless, when I asked members of the management teams to pick a statement that reflected their view of a new CIO, most selected: "Great, now I can go back to work, and the new CIO will worry about information technology." Management may say that technology issues play a role in setting strategy, but it's too deeply ingrained that the CIO should stick to technology. So, how to overcome such deep divisions? At Nokia, Finland's telecommunications giant, they found a common language for business and technology issues by literally agreeing on a new languagethe chief executive, Jorma Ollila, ordered all employees to speak English all the time. In doing so, he helped forge a simple statement of strategy that binds the company together. That statement is: In perhaps just three years, all digital information will be available on wireless Nokia devices not much bigger than a cigarette pack. By finding a common language, Mr. Ollila has turned an old-line forest-products conglomerate into a telecommunications leader with $9.8 billion in annual revenue and a 30% growth rate. Non-Finnish companies don't need to have employees learn Finnishwhich has 27 declensions for each verb, which has no prepositions, and which is one of the oddest languages in the world. But they need to do something close. They must find a wholly new way for CEOs and CIOs to think and express themselves. As a start on finding a common language, companies should create a team of I/T and line managers. The team's basic goal would be to figure out how to link the processes for developing the strategy for the whole business, for information technology, and for the organizational structure. In doing so, the team must gauge how computer systems can provide a platform for changing the organization. Most importantly, the team needs to ensure that business goals drive the information-technology strategy. The team should do its work by focusing on three questions. The three things to ask about your existing or proposed business systems are:
Focusing on those three issues can let information technology bring enormous benefits to a business, as American Airlines has shown. American built its Sabre system to save money on scheduling and on the handling of reservations. Then it used the system to offer new services, such as the EasySabre system, which lets customers make their own reservations on-line. It also used the basic system to link up with partners, such as Citibank, which provides American frequent-flyer miles to people who use its credit cards. While cost-cutting has been the focus of many computer systems, reaching all the way back to early mainframes in the 1960s, the ability to create new products and strong relationships is where the payoff is these days. American, for instance, gets most of its benefits by being able to manage pricing so carefully and create loyalty among customers. Similarly, an insurance company with robust enough information systems could add financial-planning services. The company could use client-profiling technology to acquire detailed information about potential clients and then recommend the optimal portfolio of the company's products for each. The company would thus employ technology to transform itself. While the three main questions explain why a system should be built, the team also needs to look at the eight dimensions for how the systems will create benefits. Those are:
Typically, there is a progression at work here. During the initial phase of an attempt at cutting costs, computer systems usually displace labor. When an organization gets to the point where it is using computers to differentiate or create new products or services, the systems begin to enhance analyses, then reduce cycle time, and so on. Notice anything missing? In the Communications Matrix, there are no technology terms. No RAM, no gigabyte, no relational database terminology. Using these three questions and eight dimensions forces the CEO and CIO camps to evaluate technologies based on how they will affect the businesswhich, really, is the only measure. To repeat, in plain English: Language overlays often-unexamined attitudes, beliefs, and expectations. In their "Who's on First?" routine, comedians Bud Abbott and Lou Costello ironically "communicated" that very point. Two people can talk at complete cross-purposes, speaking loudly, accurately, and sincerelyand that's pretty much what CEOs and CIOs have been doing for years now. Mr. Paoni is a clinical professor of information technology at Northwestern's Kellogg Graduate School of Management. He can be reached at ajpaoni@nwu.edu. |