The Courage of the Transparent CIOBy Charles Araujo | Posted 04-21-2014
The Courage of the Transparent CIO
By Charles Araujo
It had been one of the most frustrating weeks of my life.
We had been working with a very large manufacturing firm for quite some time. We had become their "trusted advisors." Or so we thought.
Then we learned the CIO was bringing in a big management consulting firm to present a business case to his board. At the end of the week, we were having dinner with the CIO and members of his senior leadership team, so I figured I'd have my chance to get to the bottom of this decision.
"Sam, why are you bringing in this big consulting firm to prepare the business case for your board?" I said, half asking and half complaining. "You know that we’ve been doing this work and that we’ll be the ones left to do the work after they’ve come and gone."
"Charlie, I know that. But you guys are way too small. I can't put you in front of my board. I need this consulting firm to help me sell the board on what must be done."
And with that, our conversation was over. I understood Sam's reasoning. It would take me years, however, to figure out that his reasoning was completely wrong.
The Problem With Pitches
In truth, I probably can't blame Sam. (His real name, like other details in this article, has been changed to protect the privacy of those involved.) This is the way the game has been played from the very beginning of the IT function. I discovered this unfortunate truth when I conducted research for my book, The Quantum Age of IT: Why Everything You Know About IT is About to Change. IT has always believed that "the business" is not capable of understanding technical challenges and trade-offs, so we have decided what was best and proceeded to "sell" the organization on the right course of action.
The problem is that this process of pitching a project has created a dysfunctional relationship in which IT's customers no longer believe that they can trust us—and for good reason.
I remember working with Sam several months later. He asked us to review the business case that had been prepared by the management consulting firm. It called for a $50 million investment over the next two years. We looked at the business case and told him it was crazy. (Okay, we were a bit more tactful than that, but you get the message.) By our estimate, it was a $150 million project that would take at least four years to complete—and probably closer to five. "I'll never be able to sell that to the board," Sam told us. "This business case is what they'll buy."
So, Sam pitched the business case. And the board bought it. The project was funded and got underway. Two years later, Sam was back in front of the board. The $50 million had been spent. And he was asking for a three-year extension and another $100 million. Of course, at this point, the board felt that they had no choice, so they funded the deal. But the trust between Sam and the board had been eroded. And before that three-year extension transpired, Sam was looking a new job.
Sadly, it's a common tale in IT. You probably have your own version of the story in your own company's history. It is also illustrative of why the third organizational trait in The Quantum Age of IT—the need to become a transparent organization—is perhaps the most important. And why you must have the courage to be a transparent leader.
The Courage of Transparency
The problem with being transparent is that it is not the path that leads you to getting what you want or even what you know is best for the organization. Being truly transparent requires a degree of trust and vulnerability. You must possess enough confidence in what you're presenting and in your organization's ability to recognize the right course of action. Most important, when the organization doesn't choose what you think is the best option, you must have the courage to accept that decision.
The Courage of the Transparent CIO
Instead, most IT leaders have defaulted to a posture of "pitch and play" that looks a lot like what Sam did. I have sat in more meetings than I can count where IT management teams are going through the "financials" of a project with the express purpose of figuring out how the numbers can be massaged to garner the desired approval. Rarely is there any desire to provide a true set of options with their corresponding pros, cons and costs. Instead, a recommended action is presented and the entire process revolves around ensuring that the proposed recommendation is accepted.
The great irony, of course, is that when an IT management team has an external sales team perform this same process, they hate it and feel like they’re "being sold." When a vendor consistently takes this approach, trust is eroded and the vendor is eventually transitioned out. Yet, IT leaders follow the same process again and again with their own customers. This is because whether you are a sales executive or an IT executive, being transparent with your customers requires a vast amount of courage.
Why Transparency Equals Choice
Courage is required, because true transparency is all about one thing: choice.
As a leader, the moment that you are being truly transparent is the moment in which you are openly and unabashedly sharing with your customers everything that they need to know about your current financial and operational performance, the potential positive and negative impacts of any decision that must be made, and then waiting for them to make the best choice.
When there isn't an honest choice, a trusting relationship cannot be built. When, as a leader, you are focused on persuasion, then you cannot be focused on helping the customer make the right choice for them. Even when you think that you know what the right choice is, the only party that can truly make that decision is your customers. And they will never ask for your help unless trust exists between you and them.
I don't know what would have happened if Sam had presented the truth to his board. He might have been right that they wouldn’t fund a five-year, $150 million project. And if that was the case, it would have been an explicit statement that whatever value this project provided wasn't worth$150 million and five years. Or the board might have agreed with Sam's assessment and he could have done the project correctly from the start—with his trusted relationship intact. Or perhaps the board would have asked for additional options with varying value propositions, costs, risks and time frames.
We will never know. However, I do know that if the board had been given options and choices, whatever decisions they made would have been authentic and would have enabled the relationship between Sam and the board to grow and deepen. Because they were not given that option, that trust was destroyed.
Being a transparent leader and leading a transparent organization is not easy. It requires faith. It demands trust. But it is also the key to creating a next-generation IT organization that will stand the test of time.
About the Author
Charles Araujo is a recovering consultant and accidental author of the book, The Quantum Age of IT: Why Everything You Know About IT is About to Change. He is an internationally recognized authority on IT Leadership and liberally shares his message of hope about the future of IT and what it means for all of us. He is the founder and CEO of the IT Transformation Institute and serves on the boards of itSMF USA and the Executive Next Practices Institute. You can follow him at @charlesaraujo.
Editor's note: This is the sixth installment of an eight-part article series titled "Seven Steps to a Next-Generation IT Organization." To read the fifth installment, "The Three Attitudes of a Disciplined IT Department," click here.