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CIO Leadership Series: Tim Schaefer, Northwestern Mutual

It's all about relationships for Tim Schaefer. As CIO for Northwestern Mutual in Milwaukee, he leads 1,300 employees and 1,000 contractors and is advancing the strategy of a firm for which relationships among customers, representatives and executives drive the business forward.

Schaefer
His IT priorities are varied, including helping the organization remain customer-centric; integrating product lines that have emerged as the firm has built a full set of offerings in financial security, including investment; looking at newer technologies such as social networking; and making better use of analytics.

Executive relationships

"We are a relationship-based company," Schaefer said. That applies to how it works with customers, how it works with agents, and how the executive team works to set direction.

One way Northwestern is building internal collaboration is through business relationship advocates, which in the last year have taken on more formal roles based on informal practices that have been taking place for a long time.
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These advocates are director-level people who maintain strong relationships with business units they work with, or develop information systems for. Northwestern has now created more formal processes for them, including a calendar for standard meetings, common sets of information to share on IS performance, and ways to listen for needs and communicate back.

A meeting might include discussion of IT's performance based on its service level agreements (SLAs), performance on projects, and hot topics that have come up recently. The target is to talk with the heads of business units and their key liaisons. "This is higher-level information," Schaefer said.

It's all part of bridging the gap in an organization where IT and business roles, as in many organizations, need to work together closely. Schaefer recalls a recent project related to paperless underwriting of life and disability insurance: There was initial discomfort because of reporting arrangements that were intermixed between business and IT roles. By the end, though, "you couldn't find a boundary any longer," he said. "There was no longer this divide between, well, this is the business side and this is the IT side. It was one single team focused on an outcome."

Meanwhile, CEO Ed Zore is on board with using IT to advance Northwestern's capabilities. "He's been very supportive of driving forward our investment in technology, and under his leadership we have seen a real increase in the investment in technology in our organization," Schaefer said.

Schaefer, Chief Architect Karl Gouverneur and Chief Information Security Officer Martha Valerio are all executive officers of the company, meaning more interaction with the other officers of the company who lead various business units. They are at the table during the major decisions guiding the company and can give an information-systems perspective.

"Our interactions are with groups of leaders most often rather than specifically just one on one interactions between the CIO and CEO," Schaefer said. "We want a broader set of perspectives coming to the table."

Workforce strategy

Northwestern's IT workforce development is proceeding along several different lines at once. The company has experienced some of the IT workforce shortage, but Schaefer said the decision years ago to pursue a global supply of IT talent, including contracting firms such as Infosys and Wipro, has eased the pain. But far from being outsourcing-centric, he described a company that is aggressively recruiting at home.

"We have been an organization over the years that has really brought people in and developed them internally," Schaefer said. "The majority of senior roles filled in the organization are filled from within the organization."

As part of an ongoing recruiting strategy, Northwestern has stepped up college recuriting, taking "an approach that gets us onto campuses earlier and more often," often participating in campus events well in advance of career-fair time.

It has also increased the number of interns it employs in IT by several times, to 42 this summer, by moving from nine-month full-time internships to summer internships as its core program. Meanwhile, preparation for interns has increased, with their job roles being more completely defined before they arrive.

For example, out of this this summer's crop of interns, the company had already designated eight to 10 slots to help with further adoption and rollout of Microsoft Sharepoint as a collaboration suite within the IS department.

Then there's the work at home project. Company-wide, Northwestern Mutual has been exploring telecommuting possibilities since 2006, through pilot projects that included 225 employees in a formal pilot in 2007 and more than 1,000 in a large-scale technology test early this year.

There is now a corporate steering committee tasked with expanding the work-at-home opportunities. This is a company-wide program, but IS is in a good position to benefit from it, and the help desk was an early participant in pilot projects. "They got to spend two to three days a week working in their home," Schaefer said.

Another aspect of the company's workforce strategy is mobility between different roles, including Schaefer himself, who spent four years outside of IT in policyholder services, including overseeing life insurance claims.

"When I started with the company I couldn't have imagined that someone starting as a programmer in the IT department could one day be responsible for the claims process for life insurance," he said. "I've always been proud that this company has allowed individuals to move beyond what might be seen as their initial technical specialty."

Social networking

The Internet doesn't necessarily change a relationship-based company; it just gives it a new channel. Facebook and LinkedIn are becoming an increasing part of Northwestern Mutual's business. Representatives are leading the way, with some guidance and standard language from the company that helps them comply with regulations and company policies when they post information online.

"It's less of what I would call an enforcement mentality, and it's more of a partnership," Schaefer said.

By way of example, Schaefer mentioned a customer relationship saved through the Internet.

"We had a financial representative in the Chicago area who put his profile out on LinkedIn and was contacted from that listing by an individual who was a policyowner with Northwestern Mutual, but his financial representative, I believe, had retired," Schaefer said. "He was out looking for somebody he felt that he could really work with to continue the relationship, saw the listing on LinkedIn, read the profile, and contacted the financial rep through e-mail. ... That's resulted in additional business for the company."

Laying the tracks for innovation

There are a number of technology initiatives at Northwestern aimed at newer technologies such as online social networking. But it's not just about picking the most leading edge technologies available. "That's not what we see as innovation," Schaefer said. "What we see as innovation is making our organization more relevant to our financial representatives, policyowners, and clients."

Formal ways the company approaches innovation include an "advance" category as part of the standard process for project funding, and an enterprise venture fund created this year centered around information technology activity.

As Schaefer describes it, this fund, governed jointly between IT and business leaders, is for technology implementations that "lay the track" for innovative projects. Otherwise, the first project that wanted to use a technology would bear a large cost for implementing it from scratch.

In other words, sometimes the business project comes first and sometimes the technology does, but the technology always needs to be tightly integrated with and supportive of business needs. The same philosophy underlies Schaefer's final advice to IT executives.

"We can never forget that the I in CIO stands for information," Schaefer said. "So as much as the technology is the foundation we stand on top of, our jobs are to really provide the information the organization needs to operate."

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