Cracking the Lineup

Theres an evolution around whats the most effective way to design and deliver technology, Ball says. The business side would say, Thats technology. I dont know anything about that. Its your job. Today, there is a bigger understanding of the business/IT alignment. How do you come together to use IT effectively? he asks. The business side no longer can take the stance it is ITs problem and they dont need to know anything about it. What you need are business-savvy IT people and IT-savvy business people. Sounds simple enough. But are there people who actually fall under that description in the insurance industry? No, he responds.

Lowenthal agrees mistakes were made in the past, but he believes enough time has passed so that top executives need to get over it. I dont know if that is the reason CIOs wouldnt be at the top level, he says. I think it would be more about the effectiveness of the person, how he or she has been doing the job, and how that person runs the shop.

The amount of money being spent today in technology is evidence of the value of a good CIO, he believes. IT expenditures and investments are significant, even if you are just doing maintenance on systems, Lowenthal says. There are large dollars being spent. You would think the management team wants to be aware of where those dollars are being spent, how they are being spent, and make sure the spending is aligned with the goals and strategies of the company.

Lowenthal doesnt believe todays CIOs should be painted with the same brush used on CIOs of the dot-com era. Throughout history, there are a lot of projects that failed, but those [failures] need to be measured by the performance of that CIO or technology team, he says.

Insiders or Outsiders
In his work with insurance carriers, Watson says between 60 and 70 percent of his clients treat the CIO as a respected peer, similar to a VP of sales or the top operations people. Not quite on the same status of the CFO but moving up, he says. The other 30 to 40 percent of the companies Doculabs deals with are struggling with the CIO position. They might have a signpost that says the CIO is a part of the executive committee, but he or she is really not, says Watson. They are outsiders, either because that position has turned over three times in the last 10 years or because theres just so much frustration in the insurance firms that the individual has a real credibility challenge.

Such non-tech carriers, by necessity, feel they are sufficiently covered if they have tech-savvy CFOs and CEOs in placebut wanting to be tech savvy and actually being it can be two different things. The top positions in a company carry a lot of responsibility, and it is difficult to keep up with the technology side along with the other demands of their posts. It also doesnt help that many CEOs and CFOs dont have technology in their blood, as many CIOs do. CFOs and CEOs tend to be in their early 60s or late 50s, and they say, Yeah, I want to be tech savvy, but they think of that as using their PC, their laptop, or doing work on e-mail, says Watson. The reality of the situation is they are too far into their careers with so little time [remaining] that they cant really learn all this [technology] stuff. What they basically need to know is whom they can trust.

Many of todays CIOs might wish their bosses were a little more knowledgeable about technology, but the day will come soon enough when the CEO will likely know plenty about the workings of the IT department. As time goes by, the CEOs continue to get more tech savvy, says Lowenthal. I think we all do. Technology has become ubiquitous in everything we do. Some people fight it, but as you see the next generations come into the business world, technology just keeps getting more ingrained.

Lowenthal knows there are companies that have failed to embrace technology, even in the 21st century. Those companies that dont embrace it, I imagine, are companies where you would find the CIOs who are not reporting to the CEO or the president of the company, he says. They are much lower down the management line.

To the Top
So, does the path to the big office run through the CIO? Watson doesnt bel-ieve so. A lot of people are saying yes, but Im going to say no, he says. There always will be exceptions, but Watson feels to reach the top level of corporate management that person needs to possess a significant amount of charisma. Some CIOs may have that quality, but there also is the matter of strong management skills and the ability to communicate with customers. Whoever is going to become the CEO needs to enchant the companys employees and customers, and that takes real charisma, he says. That is where you see executives who have rotated through a lot of different posts to acquire their skills.

CIOs need to broaden their horizon if they expect to rise to the top level, Lowenthal agrees, asserting it is possible for a CIO to move up to the top spot but believes it is more a matter of who the individual is rather than the title. I certainly cant say that if you are a CIO the odds are one day you are going to make it to CEO, he says. I doubt that very much. But you do have some [technology] folks who have served in business capacitieswhether it be marketing, sales, underwriting, financewho take on a CIO role and grow into a CEO. So it is possible, but I dont think it has anything to do with the position itself but more with the person who is in that position.

Watson also says CIOs who have gone through business rotations stand a much better chance of advancement, but most of the CIOs his firm has dealt with have not undergone such training. They dont have the prerequisite skills on the human side, in my opinion, to go out there and keep the customers thinking this is a leader-ship organization, he asserts. Thats a sales job. These guys are managers, but theyre also tacticians and engineers who have grown to become managers.

There is a different mindset between the business side and the technology side, Ball believes. In general, technology people have sort of an engineering mindset, he says. Whereas on the business side its more of an artistic mindset. As someone who has come through the technology side, Ball explains he needs to understand a project fully before I pick up the hammer. He finds the attitude from the business side is more on the line of, Lets start building. Well know when we get there. Not surprisingly, those two mindsets rarely truly see the other side. In reality, you need to be somewhere in the middle, he says.

Lowenthal doesnt feel he is well rounded enough in the insurance industry to move into a CEO office just yet, even though his rsum shows hes a CPA and has done auditing work. He is a believer in IT broadening its scope and endorses the practice of having IT personnel move into the business unit. He feels it is beneficial to the worker as well as being good IT practice.

Business analysts and programmers at Hartford Financial Products have shadowed company underwriters to observe how the systems are used and how the business people make their contacts and process business. Thats been an eye-opener, Lowenthal says. It allows us to create a lot of efficiencies in the way the business people do their job and their work flow. Thats just from an IT perspective. Now, if you actually can have someone do a rotation and become an underwriter trainee, that will not only prepare that person for other opportunities, it will create a much stronger alignment between the business and IT.

Strike the Balance
John Hancock is hoping Ball can strike a balance between the technology side and the business side with its latest effort. He believes the problems that existed in the past came from an inability to clearly define the problem the company was trying to solve. Too many companies race after a solution like its a slippery frog, never fully realizing what it is they are trying to improve. I talk a lot about drawing boxes, says Ball. We draw a box around a problem and say, This is what were trying to do. Regardless of how we are going to implement it, or what system or process is used, this is the objective. When everyone agrees what the objective is, then you go out and figure what the solution is. The problems definition and agreement are the important things because you can go through reams of studies around projects that failed, and 90 to 95 percent of the root cause is a lack of definition and misunderstanding around what the objective is.

One of the reasons for some failures has been the perception of what is success and what is failure. Theres a tendency to oversimplify implementation issues, says Ball. He points to the emphasis on dollars spent. You have to find a means to avoid a dollar amount early in the process because that dollar amount, regardless of what you say in terms of accuracy of the estimate, thats the number people remember.

The mistake some executive teams make is in equating the success of a project with managing that number. Being under budget doesnt do much good if the problem is not solved. If [whatever] you do for that number doesnt solve the business problem, nobodys happy, Ball says.

As with any team, trust is a given. With the high cost of technology, the CEO has to know he or she is being given the best information possible. That is one reason consultants are in business, according to Watson. We are in existence because so much has been oversold and so few senior executives can take the time and energy to get down and dirty with a project, he says. They depend on organizations like ours to do that, or they establish internal organizations that do the due diligence with the technology before spending millions of dollars.

Those price tags have forced the CEO and CFO to become savvier, but Watson believes there is a limit to how much they can learn about technology. Most of them are savvy to the extent they can ask the tough questions, he says. They are depending on people they can trust. Most of them dont trust one single person. They triangulate by talking to [consulting] firms. They arent likely to find any help in the boardroom, either. Todays boards dont have that kind of experience, he says.

Lowenthal says it is important for CIOs to know what they are getting from the CEO. You want a CEO who understands the value of technology, he says. Thats an obvious one. He advises to be careful of the CEO who is focused strictly on underwriting and how much premium dollar is coming in. You want the CEO to rally everyoneyou are all part of this, you all play a role, he says. I dont think technology should be thought of any higher than any other piece of the business because every piece is vital. I dont get into personalitieshopefully you all can get alongbut to me the most important thing on my list is how the CEO views all the parts of the organization.

For todays CIO, management skills and business acumen are just as important as an understanding of the technology being used. Dealing with suppliers and members of the technology team is important, but the job doesnt end there. Every other function of the business has to go out and talk to customers, Watson says. They need to go out to partners and sit down with customers, listen to their needs, and say, We can deliver that solution. A lot of people arent comfortable with that role, though.

Those interpersonal skills are in-creasing in value, but Lowenthal believes the real challenges for a CIO today comes in the wake of a difficult economy and the edict of doing more with less. Its amazing what you can do in an environment like this by being creative, he says. Its certainly opened my eyes. Its always an exciting time to be a CIO, and today its definitely a challenging time.

Attitude Adjustment

Since the dawn of technology, IT people have complained about a lack of understanding for technology on the business side. Not surprisingly, business people have expressed similar feelings about the technology staff. Bill Balls job is to change those attitudes at John Hancock, where the senior vice president runs the retail implementation office.

What were trying to do is move our technology development process from technology pulling the requirements out of the business side to the business side providing technology with the requirements, says Ball. This way, the business side has assurances that the technology side understands what the business side wants and needs from a particular project. Weve seen this work in pockets, he says. My role is to operationalize it throughout the organization. We started six months ago, so were clearly not there yet.

Too often in the past IT people went into a discussion with the attitude, We can get better only if you [business] get different, says Ball. People dont buy that. There has to be an understanding that both sides must change the way they go about their jobs.

That has led some CEOs to the point where they wear striped shirts to referee the battles between business and technology. The question is, has everybody gotten organizational agreement around what the rules and responsibilities are for the various areas in technology development, Ball says. The bulk of conflict happens when roles and responsibilities havent been defined upfront, and others think it is your responsibility and you think it is their responsibility.