CIOs learn boardroom-speak

CIOs learn boardroom-speak

Madison, Wis. — Information technology professionals might know technology, but business executives speak a different language. That’s what an expert panel at the Fusion 2005 CEO-CIO Symposium said as they gave some tips on simplifying tech-speak for executives and examined ways a chief information officer can hold sway in the boardroom.
“Good IT converts data into dollars and knowledge into decision making,” said John Byrnes, managing director of the Mason Wells investment firm.
But it needs a chance. According to Michael Hayford, chief financial officer of the Metavante Corporation, the main obstacle that IT professionals face in getting to the boardroom is simple: They are not invited. An August survey by Bain and Company said that 70 percent of senior executives want IT to grow, but only 5 percent of Fortune 500 companies have a CIO on the board of directors.
Typically IT professionals are invited to the executive boardroom to deal with system problems like identity theft, or when a company needs to work around a new challenge such as Sarbanes-Oxley. While most company officers believe IT is important, they don’t fully understand much of it, making IT experts outsiders in a business setting.
“If I’m a CIO able to sit on an executive team, the fact of the matter is I’m sitting with people who are not technologists,” said Rick Roy, chief technology officer at CUNA Mutual Group.
If IT professionals have a hard time justifying technology benefits to the board, it may be because of a language difference. CIOs consider problems like vendor compliance and technology integration, while the board is worried about economic value.
“The fact that you have seven years of calculus, imaginary numbers – they don’t care,” Hayford said. “If you fail in that first attempt, you’re not coming back.”
Byrnes said the one thing boards of directors have learned is that IT requires constant upgrades and investment, which translates into a negative when they don’t fully understand the proposition. “The boards of directors today know there’s a three-year cycle – they expect to come back every 36 months and they are never disappointed,” Byrnes said.

Building an executive bridge

Although executive knowledge of IT may be limited in several cases, Byrnes said that CIOs can use this to their advantage. By keeping technology speeches simple, bringing up two or three main points and opening up space for questions, they can guide the board to the right decisions.
“I like to see people who can define for me as a director what I should be doing,” Byrnes said. “Tell them how you want them to evaluate you, and in that way you take advantage of what they don’t know.”
Hayford suggested that CIOs prepare for speeches by talking to the executives about everyday things they are interested in, since it has the double effect of calming the speaker and making the board see them as a friend. In many cases, he said, a personal edge is more important than experience.
Roy said that since the 1990s CIOs have been able to build more of an executive bridge by diversifying their skills. A PricewaterhouseCoopers poll showed that in the 21st century technology has gone from 76 percent to 20 percent of a CIO’s skill focus, with the extra focus going to fiscal management, business organization and leadership.
“It’s against this backdrop that they’re listening to you,” Roy said.

IT in practice

Several information officers agreed with the techniques offered, although they came from different situations. Frank Giannantonio, CIO of Land’s End, said that his company holds quarterly reviews to study earnings and line up new product initiatives. Giannantonio said he works on the meetings that revolve around financial and product management IT strategies, focusing on larger investments geared to technology.
“Our company recognizes that an IT budget is not just a cost and expense budget; it’s more of an investment,” he said.
Wisconsin government also has more IT professionals taking on leadership roles, according to Department of Revenue CIO Oskar Anderson. Anderson said that IT is growing in several divisions, although it varies throughout with some organizations relying mainly on financial officers.
Anderson said that the Department of Revenue handles $23 million per year in IT funding, and his team has a responsibility to plan how the money is spent, get the proposal approved by leadership teams, and monitor if the money is being spent correctly.
“It’s our job to determine how much to spend on IT – and if we’re spending it wisely,” Anderson said.

Les Chappell is a staff features writer for WTN and can be contacted at