In 1977, David Barnes took a part-time position as a package loader with United Parcel Service Inc. in St. Louis. On January 4, 2005, twenty-eight years later, Barnes was named chief information officer and senior vice president at the venerable delivery company, replacing longtime CIO Ken Lacy. And though it took a while, every rung of the corporate ladder on the way up to the CIO’s office taught Barnes something he can use today.
Barnes has had a hand in virtually every facet of UPS over the years, from hand-loading packages onto trucks to developing award-winning shipment processing software. He also has proved himself to be a deft manager. CIO Insight Reporter Debra D’Agostino interviewed Barnes as part of her larger analysis piece on the disconnect between CIOs and their IT lieutenants. Here is the extended transcript of their conversation.
CIO INSIGHT: How does UPS align IT with the business side?
Alignment is much easier at UPS because it’s a corporate principle. Business drives IT. We do not do IT for IT’s sake. We look at it far differently than other companies. IT is an equal player at the strategy table. IT and the business are partners in a collaboration-driven strategy.
In what ways is IT included in strategy issues?
First, I participate on the UPS management committee, which consists of the twelve senior managers for the company. Also, all the major initiatives come through the Program Project Oversight Committee. Eight members serve on that committee and I am its chairman. All projects come through there for prioritization. These are enterprise-level, strategic and significant projects, technology or otherwise. It’s a cross-functional, collaborative environment.
Another key senior role chaired by CIO is the IT governance committee. All major IT issues are presented there. That’s a senior leadership role. That committee is made up of IT professionals and business leaders. Between those two you get a good balance.
Go one level down in IT and we have portfolio managers. They each correspond with a business partner. Those teams are aligned by process. For each process group such as CRM, etc., we have a corresponding IT manager. They work side-by-side on strategy and decide what presentations are made to the PPOC and governance committees.
So the portfolio managers propose projects that may ultimately become part of corporate strategy?
Yes. Strategy comes both ways. Since the teams are the ones making the presentation, they champion the project and ensure the vision is disseminated. At UPS there is an abundance of ideas. We take an aggressive stance on portfolio management to make sure our efforts are channeled to the truly strategic projects.
How old is the PPOC? Was strategy always decided this way?
The PPOC is in its third year, but has existed in some form for about a decade. Before we had the formal PPOC, there was a traditional functional alignment. What has been a bit of a change is that the PPOC now is looking at business initiatives as well as technology projects. That has a lot of strength because it means a bigger partnership for IT at the strategy table. It has changed the nature of the technologist. Now you need broad business acumen as well.
How else do you foster alignment?
We concentrate on developing our people. We focus on promotion as part of our culture. We move people in and out of IT. You will see people from IT work with M&A as we do acquisitions, for example. Ultimately, that makes you a more successful manager.
To be successful, you have to have those two sets of skills [technology and business] come together. You can’t just be a technologist saying you want a seat at the table when all you can talk about is application development. You have to know your core business. That changes how you talk to your staff.
How do you find balance between managing up and down?
I wear two hats. One is that of a corporate vice president, which carries significant responsibilities. The other is to be the CIO, managing 4,700 technology professionals. You have to do both, and you can’t do one at the expense of the other. So I have a series of portfolio managers. They are handpicked veterans of UPS. I have one responsible for computer operations, for example, and though we talk daily, I expect that person to run that part of the business. These are senior-level IT people and they have serious responsibilities and million-dollar budgets. Of course, the CIO does have to be involved and that level of involvement has to be significant. I have to have the time and that gets back to being well organized.
Do your direct reports speak up when they disagree with the strategy?
I think there’s always a bit of tension, a natural tension that pulls you in many directions.
It’s a team effort. At UPS we do expect our employees to be involved. There isn’t that hands-off, manage-from-a-distance environment. There’s also not a lot of hierarchy. Partnership is a big word here at UPS. There are always going to be differences of opinion, and you can have your viewpoint listened to. We call it constructive dissatisfaction. You can’t be the safe player and just be a “yes” person. There isn’t much success here for the “yes” person. You have to have an opinion and be able to speak up. We practice very good listening skills. The status quo does not cut it. You cannot be quiet at the table; you have to be active.
