Business & Finance
09:41 PM

Five Ideas That Can Help IT Pros Be Better Businesspeople

Ram Charan, consultant and author, tells IT leaders what they need to focus on to move up in business

CIOs looking to get a seat in their company's executive boardrooms need to do a better job speaking the same language as their CEO and understanding his or her business priorities, according to a top consultant and best-selling business author. "Learn about what the CEO wants to know," said Ram Charan, former Harvard professor, speaking Sunday at the InformationWeek Spring Conference in Amelia Island, Fla.

Charan said too many CIOs are relinquishing their rightful chance at the corner office to CFOs, marketing executives, and even general counsels because many are overly focused on technology. "They will tell you everything about technology but nothing about business," Charan said, speaking to a room of about 300 IT executives.

Ram Charan at the 2005 InformationWeek Spring Conference, Amelia Island, Florida

Ram Charan at the 2005 InformationWeek Spring Conference, Amelia Island, Florida

Photo by Sacha Lecca
Charan, who has consulted for numerous multinationals, including Gateway, Ford, and EDS, said IT leaders need to focus on five areas to ensure they ascend the company ladder:

1. Know the "structural shifts" affecting their company's industry. That includes the affect of factors such as globalization, commoditization, and excess capacity. "Find some time in your routine to talk to your business peers" to gain a better understanding of those factors, Charan said.

2. Know the "nucleus of the how of making money" at their companies. "Go behind the numbers and understand the processes that determine those numbers," said Charan.

Charan laid out five financial measurements-revenue growth, gross margin, operating expenses, operating margins, and revenue-to-capital-that IT people should focus on, since they're how CEOs think about a business. IT people can make what they do more relevant by relating their work to one of those measurements, and in turn to their CEO's priorities. "Don't talk about strategy; talk about how you're going to improve gross margins," Charan said.

3. Get budget commitment. Charan said to look at IT spending as one of three types: Maintenance, Business Efficiency improvements, and Transformational. The only way to influence the CEO is to have budget committed-in partnership with business units-toward business efficiency (tied to one of the five financial measurements) and transforming the business.

4. Ensure a strong "leadership gene pool" within IT organizations. The goal is to build business leaders, to identify people who can define IT infrastructure in business terms and with business value. "Make sure [IT staffers] are capable of business thinking and collaboration," he said. That may mean sending talented IT people to work in other parts of the company. Even if they never return to an IT role, that can help IT's role in the company. "They go up in the organization, and know how to use IT in a business environment," he said.

5. Develop three key personal habits. One, he urged a habit of "follow-through," of taking bright ideas and getting results. "The brightest people hate follow-through," he said. Two, IT people need to learn how to do "horizontal collaboration," meaning to partner with business colleagues in other parts of the business to improve processes. And three, IT people must forge contacts outside their own industries and outside IT to develop a broader perspective on business. "You have to get the same language as the CEO," he said.

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