One of my colleagues, Karen Rubenstrunk, is a principal advisor for our CIO Executive Program. I’ve known Karen for close to 20 years; she is a superior CIO coach. Recently, we found ourselves discussing the challenges CIOs have communicating business value. Here is Karen’s point of view:
If you’ve been around tech management as long as I have, at some point you’ve had the conversation that keeps on giving (like heartburn): how to better communicate the value of technology to the business.
Like me, I’m sure you’ve continued to wonder why we keep having this conversation over and over and over.
At a recent CIO Group Member Meeting, I found myself drawn into this conversation yet again — and being the lone dissenter in the room about what to do about it. While we kept talking about which new technologies or recent economic trends were making the task of communicating value so difficult, I’ve learned that the real problem isn’t technical, it’s personal: CIOs need to focus on perceptions and invest in the power of personal relationships with business peers.
Perceptions Drive Value
Technology’s perceived value to the institution is directly related to the maturity of the relationship between technology management and other functional managers and their teams, and that relationship is built on two fundamental perceptions: 1) the business’ perception of its dependence on technology, and 2) the business’ perception of technology management competence (see figure below).
CIOs who suffer from a supposed inability to make the value case with their business partners are usually looking for the set of unassailable metrics or the great business case or the perfect communications plan, while those who have mastered the value issue have set their efforts squarely on maturing the relationships with their partners and the underlying perceptions that support those relationships.
The first perception is business dependence. Perceptions of dependence on technology products and services can range from recognizing that technology is necessary for running fundamental business processes (emphasis on the “T” of the IT agenda), to technology being an information conduit enabling analysis and operating process improvements (emphasis on the “I” of the IT agenda), to technology management being an equal player in business strategy and execution (emphasis on the BT agenda).
The second perception is technology management’s competence. If technology management is perceived as incapable or dedicated to the wrong things (like playing with technology or protecting past decisions), perception of its value suffers. Capability is defined as being able to do what you said you would do, when and how you said you would do it. This includes managing the network and email, but increasingly it’s focused on delivering on a portfolio of business outcomes.
Taken together, these perceptions have a major impact on value. If a business executive truly believes technology has transformational value, but he perceives that technology management cannot deliver, he seeks to fulfill his value dream by contracting with outside providers. The internal technology management function loses. If technology management is perceived to be great at what it does, but the business only perceives value as day-to-day operational support, then potential value is lost until perceptions change. Unfortunately, as a whole, a majority of technology management organizations are perceived to be in support of the business, wherein their value is equated to the size of their budget — and it’s invariably too big from most partners’ perspectives.
CIOs who have mastered the value question focus on changing both sets of perceptions simultaneously, yet with unique approaches. They do focus on technology management competencies, but they leave much of the assessing and improving of technology delivery processes to their direct reports. And, since each stakeholder has her own set of perceptions, CIOs who have mastered the value communication equation will say that the majority of their time is spent developing and cultivating relationships with business partners. Through these relationships, they teach business partners about technology and its application to the business — yes, they really teach, taking on the roles of professor and marketer. These CIOs recognize that most business partners may never fully understand the ins and outs of technology management, but if they create a credible and trustworthy personal relationship with them, then they have the opportunity to grow their perceptions about technology management value.
But these CIOs do something else as well. They create a clear and compelling value statement and make sure each and every person in their organization lives and breathes it. If you doubt the need for this, I challenge you to ask each member of your staff to take out a piece of paper at your next staff meeting. Ask them to write down the value of technology. Wait to see how long it takes before they all start writing. Better yet, collect all the answers and see how (in)consistent they are.
Identifying metrics and creating communication plans are necessary. But, here’s my request:
Before you spend too much time “perfecting” your metrics or communications plan, take a look at your organization and see if you are fully managing the perceptions of value by creating deep relationships with your most important stakeholders and then making sure that your value message to them is the same compelling one anyone in your organization would send.
And let me know how it goes.