The Power of IT Peer Groups
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
IT peer groups provide CIOs at medium-size firms with advice and support, help them achieve goals, and can lead to new personal relationships.
By Karen A. Frenkel
Last year, Israel Lang, CIO of Pinnacle, an IT consulting practice in Indianapolis, faced a dilemma. A difficult customer was mistreating his engineers and four of them had quit in frustration. But the customer paid Pinnacle five figures a month for its services, “so it was hard to walk away from that cash flow,” says Lang.
Rather than lose the customer, Lang turned to his peers, a group of about 25 people from six medium-size IT companies who had been meeting since 2011. The group, one of 25 run by HTG Peer Groups, Harlan, Iowa, and which convenes for two days each quarter, brainstormed and suggested three options: 1) Fire the customer; 2) Hire a new team of engineers who knew from the start they would be working for the onerous customer; 3) Circumvent the customer contact, talk to the board and offer to take over the customer’s entire IT environment.
Lang is one of hundreds of CIOs at medium-sized firms who find that face-to-face peer groups provide advice and support; demand accountability, as would a large company’s board; and lead to enriching, personal business relationships. In terms of accountability, the peer groups help members establish and attain their goals. Typical goals are to hire several engineers, train a new salesperson by the next quarter, or find the best way to bill a client for an engineer’s time. Outcomes must be measureable.
Ultimately, Lang chose a hybrid strategy. After introducing new engineers, whom the client vetoed, he met separately with a higher-level manager. The manager admitted that other vendors had also voiced concerns and asked Lang to document incidents. Then the manager brought the issue to the board, and interactions improved. Everyone “is better for it,” says Lang, “and my engineers responded well because they felt I went to bat for them in a difficult situation.”
The peer group’s suggestions provided not only a starting point for a solution, but “validated what we were thinking and feeling,” says Lang. The peers acted like a virtual board, providing “feedback and offering ways to avoid stumbling blocks,” he says.
Steve Knutson, CIO of Marco, Inc., a 620-employee IT consultancy in St. Cloud, Minn., and who belongs to the same peer group as Lang, says accountability initially brought the best value, but that belonging to the group also eases a sense of isolation. “There’s no manual on how to run and grow an IT business,” he says. “I can’t turn to page 40 on how to pay billable engineers, or on how to grow my managed service provider practice.”
A gathering with colleagues in the same business is “like drinking through a fire hose,” Knutsen says. Every quarter, each member picks three goals and must report back the following quarter. Depending on whether or not the goals are achieved, the member places a green or red dot next to each goal on their PowerPoint presentation.
Such accountability provides “an extra kick,” Knutson says. “You don’t want to be the guy with three red dots standing in front of other companies. It’s embarrassing.” Meetings can get “pretty tense,” he says. “They go, ‘Why didn’t you do it?’ ‘Cause I was busy with other stuff.’ ‘Well, why’d you make it a goal?’ So you learn real quick you better make a goal you can stick to and do.”
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