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IBM's Hennessy embraces new CIO leadership model

Mark Hennessy
Mark Hennessy will never forget the CIO conference he attended as the newly minted vice president and chief information officer of IBM Corp. His boss, CEO Sam Palmisano, was speaking on the emerging take-charge role of CIOs around the world. Hennessy furiously took notes as Palmisano, who plucked Hennessy out of his leading role in sales and channel management, was essentially spelling out his new job description.

At first, the things Palmisano put on the screen surprised him: integrating the enterprise by aligning business and information technology, driving long-term revenue growth, leading innovation, and developing future leaders. In truth, IBM already had set a lot of this in motion, and Hennessy has embraced Palmisano's vision of the CIO's emerging role in a number of the corporation's key strategic initiatives.

To Hennessy, technology leadership is not just about understanding the strategy of the business - the current prerequisite - but actually setting the strategy and executing it. As CIO of global company in changing economic times, Hennessy knows the role of the CIO is fundamentally changing from that of a utility manager to somebody who shows leadership in the strategic decision-making team.

“I think once you make that leap, and you are very much aligned with the execution of the company's strategy, it is a lot easier to justify the investments because they are in line with the strategy," he said, "and they do return real value whether it be revenue growth, or productivity improvement, or increased customer satisfaction."

Global integration
Hennessy is taking on these new leadership responsibilities for a global technology company with nearly $100 billion in annual revenue and approximately 387,000 employees. With that many workers spread across the planet, the Armonk, N.Y.-based firm has been focused on integration.

Linked to IBM's global integration are initiatives that address how it provisions employees in its growth markets, how it brings tools and capabilities to bear in those markets, and how it integrates the enterprise across business units and across geographies with a common set of processes and tools.

“Once we do that, we generate an awful lot of value to IBM in terms of efficiency and effectiveness,” Hennessy explained. “Even more importantly, we now do a much better job of serving our clients around the world because they are dealing with one common set of processes and one common set of tools."

It's not just that IBM does business in more than 150 countries. More than half of its employees have been with the company less than five years, creating demand for IT to help manage human capital better.

The firm's workforce management initiative is designed to create common processes, common tools, and a dictionary of skills and capabilities that can be deployed depending on client need.

"A big part of this is how well we are capturing the requirements and planning to either bring on board the skills we need or develop the people we already have on board to meet ongoing requirements of our clients," Hennessy said. "We do feel as though our services business is benefiting from those improved processes and tools."

For example, there are several options for training and several online catalogs for the various programs. An IBM project team looked at the end-to-end need for prescriptive learning programs and built the Learning@IBM portal, which offers learning plans based on job role, skill set, and market demand. The project team also built an easy way to register for classes, whether they are online or in the classroom.

Mixing and matching skilled people with services opportunities has been a challenge for IBM, but the first step in unlocking the value was process simplification work, then came the common data architecture topped with a suite of tools. This process simplification is one area where Hennessy followed Palmisano's CIO leadership template because IBM's chief executive has stressed the importance of not automating chaos.

According to Hennessy, the lesson is “one step at a time, one process at a time,” and that's how the company is approaching global integration.

Measuring integration

Another aspect of Hennessy's leadership on governance has focused on identifying appropriate business metrics, not just deployment metrics, and assigning accountability for achieving those metrics. In terms of ROI, the company has established a set of measurements around the length of time it takes onboard an employee, the utilization rate, and the size of the pipeline of skills, or backlog of skills, the company has.

In Hennessy's view, business metrics are an area where global process owners can help the integration effort because IT doesn't normally come up with business-value metrics. He views this as another important "proof point" necessary to ensure that IT is linked into senior management and ensuring that it is part of setting the business strategy moving forward.

“If we are using the metrics that apply to them in their business, we can demonstrate our ability to improve those business metrics, and we're going to have a lot more success in terms of getting the investment that we need and in demonstrating the value we're creating,” he said.

IBM 2.0

Hennessy has some advice for CIOs who want to adopt collaboration tools associated with Web 2.0, but face skeptical executives: start slow and demonstrate business value with a couple of small projects.

IBM has used wikis, blogs and online idea-generation forums for several years, and the first step was to build a portfolio of examples where collaboration created real value. Hennessy said IBM's senior executives are willing to experiment, and the company's first breakthrough was a “Values Jam,” an online get-together where the company used its collaborative Jam technology to invite employees to talk about the values were important to the corporation.

For example, employees said that if they were able to take on short-term assignments in different areas of the business, they would better understand the bigger picture and also build skills that would help them in their current roles. So IBM developed "Blue Opportunities," which is a clearinghouse for short-term assignments: everything from a short project of a few hours to a longer, part-time "stretch" assignment that could last a few months.

IBM also has used jams to help external clients drive online idea generation, including a three-day jam for automotive suppliers in March, 2007, that generated more than 1,500 comments from people that would not have been able to meet face-to-face.

While some people were concerned about an approach where everybody has a voice, the Values Jam helped IBM executives see the upside of collaboration tools. They found that participation crossed business units, geographies, and generations. The company used that input to craft collaborative values, and everybody feels as though they were part of the process, Hennessy said.

What's more, upper management took note of the bottoms-up approach. “They got very valuable input and feedback, and now they are much more willing to use these kinds of tools and capabilities," Hennessy said.

Collaboration metrics

In the long run, Hennessy believes the company should measure the return on investment of social networking tools. There are a lot of tools to choose from, and the company would like to evaluate which ones are more effective at different types of objectives. In addition, Hennessy would like to calibrate how much IBM should be investing in them, and compare those investments to other options.

As a result, the corporation is thinking about a set of tools specifically designed for idea generation and another set of tools and processes designed for validation and prototyping ideas. IBM measures the idea-generation tools based on the number of people that use them, the number of ideas created, the percentage of ideas that were sponsored, and how long it takes to move an idea into the company's idea prototyping facility.

Once the company has a set of ideas in its technology adoption program or another prototyping and validation tool, IBM measures the length of time it takes to germinate and become something to either market or use internally. The company also wants to measure how long it takes to process an idea because it wants to avoid ideas becoming stagnant.

The ultimate measurements are revenue generation, improved client satisfaction, and cost avoidance. “We try to track all of those things, and we're not all the way there yet in terms of the discipline we'd like to have, but we've got some good data now that we can start to make trade-off decisions on,” Hennessy explained.

As a global company with collaboration tools, it has approached security with a set of social computing guidelines that are reviewed annually and cover such things as conduct, proprietary information, rumors, and a preference for employees to use real names and disclose their IBM affiliation in online discussions related to their work.

“It's really very interesting because the community developed through interaction with many users of many different types of social networking tools,” Hennessy noted. “It's kind of the playbook that we use as we drive interactions with each other. Internally, we really focus on that, and it's worked very effectively as the community polices itself, ensures that instructions are constructive, and that we're living up to our values.”

IT-driven innovation

Innovations that drive integration and collaboration are part of an ongoing process, and one that CIOs can take the lead on. As someone who does not view innovation as a one-time event, Hennessy believes IT can drive the innovative process even if upper management doesn't give it a license to innovate.

He said CIOs are well positioned to drive innovation for two basic reasons: they have the unique vantage point of viewing the business from end to end and knowing the location of customer service connection points, and they know the tools and the processes that drive collaboration. Part of the CIO leadership role, he said, is to give staff the tools they need to drive innovation, whether it's collaboration tools, whether it's e-mail based, voice-based, wikis, blogs, or video.

“Innovation, to me, says, `I'm taking a set of skills or a set of inventions or capabilities and applying them to a business need or a business opportunity or an academic or governmental need,'" Hennessy said. "That, I think, is a very important role for a CIO - to facilitate that collaboration and innovation within an enterprise.”

A forgotten part of CIO leadership, he said, is to make sure every person in the IT organization understands how his or her work supports the business strategy, especially when the company is trying to integrate on a global basis.

“I think that's very important, and I think that's motivational,” Hennessy said. “I think it helps us keep our skills on track, and I think it makes us very relevant and very valuable for the enterprise.”

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