The Habits of Highly Effective Technology Leaders What do CEOs expect from technology?

What do they expect from their technology

L
By Stephen J. Andriole
Illustration by Jason Schneider

leaders? How should technology leaders brand themselves? Todays technology leaders would do best to learn the specific leadership skills required to meet ITs ever-changing challenges.

ong before Nicholas Carr published his now-famous article IT Doesnt Matter in the Harvard Business Review, technology leadership was changing [3]. The technology heroes of the 1970s and 1980s were different from the heroes of the 1990s, and the heroes of the early 21st century would not even recognize their 20th century counterparts. This article looks at seven habits that early 21st century technology leaders practice day-in and day-out. These habits are derived from survey data weve collected and analyzed at the Cutter Consortium since 2001, when we posted our first online survey about business, technology, and management [1]. The list is clearly about businessnot technologyprocesses and outcomes. The article describes the changes that define new IT leadership challenges as well as the specific leadership

COMMUNICATIONS OF THE ACM March 2007/Vol. 50, No. 3

67

skills that highly effective technology professionals must have. So what should business technology leaders do? Among other things, they should build business scenarios; track technology that matters to business; identify business pain and pleasure; organize adaptively; manage infrastructure cost-effectively; communicate well and often; and market.

should be developed independently of technologyenabled opportunities? No, but they should lead the process. There will be times when new business models are difficult if not impossible to imagine without technology knowledge. Since business technology leaders understand technology, they are in a good position to exploit the business technology intersection. Several analysts have documented this trend [2, 46].

BUILDING BUSINESS SCENARIOS In the 1990s, when I was CTO of CIGNA, we TRACKING TECHNOLOGY THAT MATTERS engaged IBM to develop a set of business scenarios Technology leaders acknowledge the distinction that described where the insurance and financial ser- between operational technology and strategic techvices industries would be nology as suggested in in the early 21st century. Figure 1, which identiMy group at CIGNA was fies five levels of busiStrategic Technology The Technology Group, ness technology. These Business Strategy which was responsible for levels help us undersetting technology stanstand how senior manStrategic Business Applications dards, defining the overall agement sees Business Technology Architecture computing and commutechnology and where Infrastructure nications architecture, the leadership opportumaintaining security, and nities and challenges Support managing the R&D budlie. Everything below Operational Technology get. In order to develop the line in Figure 1 is a credibility with the commodity. But comCIGNA lines of business, petitive advantage is we suspended all talk still quite possible about technology and through the right above-the-line investments in Figure 1. Operational and strategic technology layers. instead focused on curstrategic technology. Andriole fig 1 (3/07) technology investments are those that rent and emerging busiStrategic ness models and speak directly to customers, market share, the compeprocesses. Needless to say, in the mid-1990s this dis- tition, and collaboration. Operational technology armed the business executives, since their image of investments speak directly to the computing and systems was that we were always late, always communications infrastructure. CRMwhen well expensive, not fully competent, and too often even a done, of courseis strategic, as are investments in little arrogant. Realizing this, we used business sce- business intelligence and business analytics, supply narios as a Trojan horse. It worked well. Why? chain optimization, dynamic forecasting, distribution Because all of the effort was about business, not and pricing, and product/service personalization, and technology. customization. Desktop, laptop, and personal digital assistant (PDA) acquisition, deployment, and support Habit #1: Business technology leaders focus on are operational, as are routers, hubs, storage area netbusiness models and processes before they focus on works, and database management platforms. Leaders exploit the operational/strategic distinctechnology infrastructure or applications. tion; they also track technology trends, especially What good scenarios really do is profile market- trends that really matter to the business, that is, all places and profitable transactions. They also identify technologies that can impact business, not technology constraints. They are compasses that influence the concepts or even prototypes. Examples? The direction that strategic decisions take. Highly effective Semantic Webthe intelligent Internetis a business technology leaders develop, package, and sell tremendously interesting concept, but is a long way business scenarios. They work with the business to from implementation. Real-time synchronization and profile as is andespeciallyto be business mod- real-time computing generally are also fascinating concepts but, again, we are some years away from els and processes. Is this to say that business models and processes widespread implementation.
68
March 2007/Vol. 50, No. 3 COMMUNICATIONS OF THE ACM

Leaders should track the more interesting concepts but resist temptations to hype technologies that are still in the early stages of development: THE LAST THING A BUSINESS EXECUTIVE WANTS TO HEAR ABOUT IS HOW COOL A TECHNOLOGY IS, or how great its going to be (in, say, five years).
On the other hand, utility computingthe technology acquisition and support model that uses the electricity model to describe its pay-by-the-drink approach to technology acquisitionis emerging as a prototype with some real potential, though it is far too early to commit to a major investment in whole technology subscription models. Similarly, grid computbetween operational and strategic technology and the chasm between technology concepts, prototypes, and bona fide technology clusters.
IDENTIFYING BUSINESS PAIN AND PLEASURE Business technology leaders should speak the language of business. They should focus on the pain that business managers and executives feel. The really good ones keep a running list of the most difficult problemsthe sharpest pain points.

Clusters
ERP CRM B2B Commerce Business Intelligence Wireless Grid Computing Communications Utility Computing Application Nanotechnology Servers Web Services Security Personalization Services Customization Technology Voice Recognition Real-Time Outsourcing Thin Clients Synchronization The Segway Semantic Web Dynamic BPM

Prototypes

Habit #3: Business technology leaders identify and prioritize business painand approaches to pain reliefas they move toward the creation of business pleasure. Business pain comes in many forms. Some comes in the form of cost control, such as headcount and overhead cost. Pain relief comes in the form of improved business response and control, such as improved management effectiveness, employee productivity, and supplier relations. Business pleasure includes revenue generation, up-selling, cross-selling, organic growth, acquisitive growth, and, of course, increased profit. The whole pleasure/pain exercise focuses on business success. It also focuses on what individual business professionals will personally find excitingand rewarding. Leaders understand what makes people heroes, what the organization values. Figure 3 identifies three paths in the alignment-topartnership journey. Effective technology leaders appreciate business pain and pleasure, become more than just credible, and define business value around strategy. Influential technologists shape both operations and strategy. If they get operations correct, they can spend most of their time with their new partners thinking about competitive advantages, revenue generation, and profitability.
ORGANIZE ADAPTIVELY Lots of companies are decentralized these days, though the number recentralizing is increasing. The essence of the centralization/decentralization dance spins around the value of shared services. But it is
COMMUNICATIONS OF THE ACM March 2007/Vol. 50, No. 3

Concepts

Fake or Real?

Critical Success Factors

ing is showing solid promise in Figure 2. Technology distinctions and the some industries as is Web Serchasm that leaders vices technology, thin clients, track. and the newest voice recognition Andriole fig 2 (3/07) technologies. These all bear watching so long as they map onto the business scenarios that the same business technology leaders develop. Technology clusters are real and powerful and ripe for exploitation. Clusters are proven technologies with large supporting casts of developers and support vendors; they are also supported by well-funded R&D infrastructures. Leaders should track the more interesting concepts but resist temptations to hype technologies that are still in the early stages of development: the last thing a business executive wants to hear about is how cool a technology is, or how great its going to be (in, say, five years). Habit #2: Business technology leaders track technology that matters by focusing on the distinction

69

also about discipline and governance. Habit #4: Business technology leaders optimize the value of shared services in centralized and decentralized companies, and they organize around the distinction between operational and strategic technology. Technology leaders also champion governance above and below the operational and strategic line.

business processes. CIOs and CTOs should report to the CEO or the COO, not the CFO, whose incentive is usually to hold costs down. CIOs and CTOs should organize their organizations around the five layers, but should also make sure that they organize around hardware, software and processes.1

MANAGE INFRASTRUCTURE Leaders make certain the computing and communications infrastructure is secure, reliable, Pain Pleasure scalable, and cost-effecThe above-the-line/belowAlignment Credibility Influence Partnership tive. Leaders understand the-line distinction in Figthere are alternative ways ure 1 is important to optiOperations Strategy to acquire, deploy, and mal organization. But the support computing and wild card is governance. If communications infraan organization is without structures. They optiunambiguous governance mize the alternatives its chances for effective with reference to their organizations core competenorganization are pretty Figure 3. Paths to business much non-existent. technology partnership. cies, culture, and evolving business strategy. Given the amount of infrastructure outsourcing, The key to going forward is to define the business technology organization as leaders can write diagnostic requests for proposals though there is onenot twoorganizations. (RFPs) for infrastructure technologies and processes, Andriole fig 3 (3/07) Below-the-line infrastructure should be managed as well as the effective service-level agreements transparently. While this is not to say that it is unim- (SLAs). portant (the opposite argument to be discussed later), it is to affirm its relative unimportance compared to Habit #5: Business technology leaders manage above-the-line projects, programs, and impact. (This computing and communications infrastructure is the concession to the IT-is-a-commodity arguments professionally and cost-effectively through negotiated service-level agreements (SLAs) and measurethat are accurate only to a point.) Organizational leadership focuses first on the gov- ment best practices. ernance of business technology resources, investAnother skill is measurement. How well is the ments, responsibilities, principles, and priorities. The business value of technology should be the primary infrastructure performing? What does industry governance philosophy. Below-the-line infrastructure benchmarking data tell you? Leaders are aware of and support should be shared across the organization what is happening in their industry and in their enviregardless if the business structure is centralized or ronment, especially with acquisition trends. When decentralized. Above-the-line applications should be outsourcing makes sense, leaders manage the SWOT identified by the business regardless of whether the (strengths/weaknesses/opportunities/threats) analysis: structure is centralized or decentralized. Enterprise Leaders direct all of the technology acquisition architecture should be jointly owned by the lines of processes (once joint decisions are made about what business and the infrastructure support provider. to acquire). Reporting relationships are always complicated, especially in decentralized organizations. The key is to COMMUNICATE organize around the five business technology layers Leaders understand that the essence of communica(see Figure 1) that share decision-making authority tion (and its cousin, influence) is hard and soft facts, through explicit governance (and Business Technology Councils for handling exceptions). Flexibility is 1 General example, responsiessential, since the business technology relationship is ble for keyMotors, forlike supply has recently identified five process officersSince GM processes chain efficiency and program management. fluid and continuous and not defined around a num- is a decentralized organization, there are lines of business CIOswho report to the heads of the lines of business (with a dotted line to the enterprise CIO). The addition ber of discrete rules. of the process officers is the enterprises way of creating synergy across enterprise and Reporting relationships should speak directly to line of business objectives [7].
70
March 2007/Vol. 50, No. 3 COMMUNICATIONS OF THE ACM

I cannot emphasize enough the value of internal and external technology marketing. The technology story at your company assuming it is mostly goodmust be packaged and sold on a continuous basis. A SMALL INVESTMENT WILL YIELD SUBSTANTIAL RETURNS. Business technology leaders understand all this.
and hard and soft communications skills. Are your technology leaders good communicators? Do people understand what they say and what they mean? Communication is a continuous process. When things are relatively quiet, leaders still need to communicate what they are doing, the status of their projects, and their strategies. When things are bad, they can call upon a deep continuous relationship with their partners and stakeholders to jointly solve problems; and when things are good, leaders can exploit their communications investments to make sure everyone understands the significance of the victory at hand. Habit #6: Business technology leaders communicate often and predictably; leaders communicate good news and bad news in business terms and provide transparent insight into technology initiatives through tools like dashboards. Most communication is routine, that is, how well the infrastructure is performing, technology costs, technology total cost of ownership (TCO) models, and the return on investment (ROI) of business technology projects and programs. Regardless of how mundane it might be, insight into the availability, vulnerability, and effectiveness of the technology infrastructure and key strategic applications is necessaryjust as necessary as monthly sales reports. Project/program/portfolio dashboards are preferred by managers: everyone likes easy-to-read status reports on key projects and whole programs. It is also a good idea to develop some form of scorecard that communicates the overall impact that business technology is having at the company.
MARKET Leaders think about who creates, distributes, and maintains the technology message inside and outside of the company. Business technology leaders are sensitive to the need to internally and externally market their business technology accomplishments and strategies. So what are the pieces of a good technology mar-

keting strategy? First, consider what is being sold. Obviously there is hardware, software, and services, but there is also image, perceptions, and strategies. When everything goes well everyone thinks the technology people are really pretty good, that things work reasonably well and for a fair price. If the hardware and software works well, but the image is poor, technology is perceived to be a failure, just as bad hardware and softwarebut good perceptionswill buy some time. Like other business leaders, technology leaders sell hard and soft information and insights, tangible and intangible assets, and processes. Habit #7: Business technology leaders actively market their roles in the company as well as technologys ongoing contribution to the business through a variety of tools and techniques. Public companies have a unique challenge. Increasingly, technology is included as a variable in company valuation models. The analysts that cover public company stocks look at technology infrastructures, applications, and best practices in order to determine the maturity of a companys technology acquisition, deployment, and support strategies. CIOs and CTOs who are bona fide business technology leaders talk to these analysts, fielding their questions and otherwise molding their understanding of the role that technology plays in the current and anticipated business. What is the brand of your technology organization? If you were a professional sports team, what would be a good name for your technology organization? Would you be the Innovators? The Terminators? Put another way, if you asked the analysts who cover your stock to word-associate technology and your company, what would they say? Disciplined? Strategic? Weak? What about collateral materials? Does the technology organization have its own Web site? Its own brochures? Case studies? White papers? Reference-able accounts (internal customers who are happy with technologys services)? Are there newsletters and technology primers? Is there information about the competition? Is there a technology road show? A consistent
COMMUNICATIONS OF THE ACM March 2007/Vol. 50, No. 3

71

message about the role technology plays in the company, how technology is organized, what matters most, the major projects, and technologys contribution to profitable growth, among other key messages is essential to running technology like a business. Most importantly, are there dedicated resources for technology marketing? I cannot emphasize enough the value of internal and external technology marketing. The technology story at your companyassuming it is mostly goodmust be packaged and sold on a continuous basis. A small investment will yield substantial returns. Business technology leaders understand all this.
WHAT NEXT? Are leaders born or are they developed? The seven habits described here should provide enough clues to the answer. Many leadership qualities are, of course, inherent to specific personalities, but just as many can be developed over time with the right insight and coaching Without question, the nature of business technology leadership is changing. This article tries to profile the trends and the leadership requirements that will be rewarded in the early 21st century. Is this a wakeup call? To some extent it is, but it is also a framework for thinking about 21st century leadership as we put more and more distance between us and the business technology alignment debates of the 1990s. c

References
1. Andriole, S.J. Todays Best Practices in Business Technology Management. Cutter Consortium 6, 5 (2004). 2. Bassellier, G. and Benbassat, I. Business competence of information technology professionals: Conceptual development and influence on ITbusiness partnerships. MIS Q. 28, 4 (2004), 673694. 3. Carr, N. IT doesnt matter. Harvard Business Review (May 2003), 4149. 4. Chan, S., Huff, D., Barclay, W., and Copland, D.G. Business strategic orientation, information systems strategic orientation, and strategic alignment. Information Systems Research 8, 2 (1997), 125150. 5. Sabherwal, R. and Chan, Y. Alignment between business and IS strategies: A study of prospectors, analyzers, and defenders. Information Systems Research 12, 1 (2001), 1133. 6. Sabherwal, R., Hirscheim, R., and Goles, T. The dynamics of alignment: Insights from a punctuated equilibrium model. Organization Science 12, 2 (2001), 179197. 7. Wolf, C. General Motors Process Information Officers. Technical brief. Business Process Trends (Oct. 2003), 12.

Stephen J. Andriole (stephen.andriole@villanova.edu) is the Thomas G. Labrecque Professor of Business at Villanova University, Villanova, PA, where he conducts applied research in business technology convergence. He is also the founder and CTO of TechVestCo, a economy consortium that focuses on optimizing investments in information technology.
Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. To copy otherwise, to republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee.

2007 ACM 0001-0782/07/0300 $5.00

Coming Next Month in COMMUNICATIONS APRIL

IS ABSTRACTION THE KEY TO COMPUTING? HOW TO AVOID DISAPPOINTMENT BY DESIGN CONSUMER SUPPORT SYSTEMS DESIGNING DATA-INTENSIVE WEB APPS USING WEB MARTS ANALYZING INTRUSION PREVENTION DATA FOR PREDICTING HOSTILE ACTIVITIES IN NETWORKS WHAT ARE PEOPLE LOOKING FOR ON GOVERNMENT WEB SITES? INVESTIGATING VALUE-BASED DECISION BIAS AND MEDIATION INCONSISTENCIES AND DISCONNECTS MANAGING RISKS IN OFFSHORE SYSTEMS DEVELOPMENT

72

March 2007/Vol. 50, No. 3 COMMUNICATIONS OF THE ACM