Executive Briefs: March 2004

By CIOinsight  |  Posted 03-01-2004
Due Diligence: The China Syndrome
by Eric Nee

As its economic clout grows, China has begun to use that might to affect the course of a variety of critical technology standards. Case in point: The country's current attempt to establish its own 3G wireless standard. While that effort has little chance of success outside some parts of China, in the years to come, says columnist and veteran Silicon Valley watcher Eric Nee, China may be able to use its heft to dictate standards in any number of newly emerging markets, and to use them to its own advantage.

Leading Edge: Share the Power
By Warren Bennis

The turmoil at the Walt Disney Co. is the latest example of the failure of command-and-control leadership. Why does this management style remain so widely practiced? Why have so few leaders truly embraced collaboration in an era when organizations are driven by information? The dirty little secret, according to leadership expert Warren Bennis, is that many executives are uncomfortable with a collaborative approach; an imperial style provides the biggest ego boost. In this column, Bennis provides evidence of the advantages of collaboration and discusses leaders who have set an example of sharing power.

Analysis: Groom or Recruit?
By Elizabeth Wasserman

There's no one-size-fits-all model for hiring a new CIO, says technology journalist Elizabeth Wasserman. If breadth of external experience is important, looking outside for a CIO makes sense. If internal continuity is part of a company's cultural imperative, then promoting from within is the way to go. In either case, companies will find the better successor—and reduce the risk of high turnover—by putting in place a clear succession plan that takes into account the overall business strategy as well as its technology needs.

Case Study: Merrill Lynch & Co.
By Jeffrey Rothfeder

Sept. 11 and the bursting of the Internet bubble left Merrill Lynch & Co. reeling, with employee morale falling as fast as the firm's revenues and earnings. With demands for deep budget cuts getting louder, in early 2002, Merrill's human resources executives made the radical decision to slash HR costs, not by taking the outsourcing route—a predictable strategy that could have cut HR expenses by perhaps 20 percent—but by wrenching reorganization and the construction of an HR call center of its own. Says Contributing Editor Jeffrey Rothfeder, Merrill's contrarian approach not only resulted in savings of 50 percent but gave the department a new, more strategic role to play in managing Merrill's human capital.

Whiteboard: Mastering Negotiations: A CIO's Guide
By David Weidenfeld and Ross MacDonald

There are two reasons bargaining with IT vendors is tough: The vendors know how to haggle, and buyers usually don't. On one side, there are sharp salespeople, dull RFP responses and dreary contracts. On the other, there are a gaggle of IT and business managers who don't prepare adequately or put up a united front. Guess who gets the better deal? In this whiteboard, David Weidenfeld, a veteran attorney at McDonald's Corp. who specializes in negotiating contracts with IT vendors, shares the techniques he uses to gain an advantage when he bargains. The key, as Weidenfeld says with the help of illustrator Ross MacDonald, is to maintain negotiating leverage by controlling the pace of negotiations and the contract document, bargaining with several vendors simultaneously, never indicating a preference for one vendor over another, and disqualifying any vendor who seeks to go over the heads of the negotiating team.

Research: The Role of the CIO
By the editors of CIO Insight

The past couple of years have been a period of retrenchment in the CIO ranks, with turnover declining and compensation moving up slowly. But according to the almost 500 top IT executives who responded to this year's survey on the CIO role, two other trends are gathering speed. First, CIOs are becoming more business-oriented: Our respondents agreed that they need to spend more time on business issues than they have in the past. Second, the leadership gap appears to be growing: More and more CIOs point to leadership as the most important personal attribute required for their jobs, yet fewer cite the ability to lead as one of their strongest attributes.

Strategic Technology: Business Process Modeling
By Debra D'Agostino

Most companies realize that they need to make their processes more adaptable to ever-changing business events, such as a merger or the decision to outsource a certain function. Business process modeling tools help company executives create more malleable workflows by simulating future processes before they're implemented. When done right, says CIO Insight Reporter Debra D'Agostino, modeling can help a company speed processes through automation, cut costs by creating more efficient processes and comply with mandatory federal regulations such as Sarbanes-Oxley. But beware: Modeling takes up a lot of manpower, and it's easy to lose sight of company-wide goals.