Business & Finance
Commentary
10/22/2004
07:01 PM
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Secret CIO: Winning Projects Must Flow To Bottom Line

In getting support, remember that bonuses depend on profits.

I've had my issues over the years with Stephanie Stone, our VP of human resources. She's done a lot of things I don't like, but she sincerely wants to help the company and its employees. While we have our disagreements, there's enough mutual respect that we can work together without trying to rip out each other's throats, which generally is a sufficient level of corporate staff bonding to encourage productive collaboration.

So when Stephanie wanted to discuss the funding presentation for a new corporate HR system, I was eager to help. When a company has gone through a recession, employees get hurt. The survivors need attention. Stephanie felt it was a top priority to identify talented people and demonstrate to them that they would be considered for emerging opportunities. It's a win-win situation and she was certain the Executive Committee would see it her way.

I shifted uncomfortably in my chair as she went through her pitch. The PowerPoint slides were beautiful, and the numbers our IT analysts developed for the systems implementation were rock-solid. What bothered me, though, was her emphasis on morale and talent identification as the justification for spending what was a non-trivial amount of money.

"Stephanie," I said, "I agree morale is important and that the company needs to identify which employees can help us in a given situation. The problem is that the Executive Committee needs to approve your project, and there are only three votes that really count around that table. Phil, Sid, and Kratmeyer come at business in different ways, but they have one common trait. They won't spend any money without what they deem a very good rationale."

There was a noticeable grimace on her face as I mentioned the names of our CEO, CFO, and executive VP of international operations. That triumvirate has a well-earned reputation for driving people to distraction with their endless questioning about benefits and costs. We had lost more than one good project because of their reluctance to take a risk.

"There are three reasons," I went on, "why they'll approve a project: 1) It reduces costs, 2) it increases our revenue, or 3) it improves our decision-making; i.e., allows us to beat up a competitor and, thus, ultimately reduce costs and increase revenue.

"I can probably identify some operational savings that will accrue with the new system, but you're going to need to focus on one of those three reasons without degrading the other two. The project has to translate quickly, clearly, and unassailably to money on the bottom line for those guys to spend a dime. Better customer experience, improved decision-making, or a more contented workforce--whatever. If it doesn't boost profits--and potentially their bonuses--they won't be interested. Show why it's good for the stockholders, and it will get approved. Otherwise, you lose--and so will our employees."

Stephanie sighed, knowing there was a lot of hard work ahead. She'll present the business benefits while I handle the technology and operational aspects. I don't know if we'll be successful--I'd be a lot more confident if we were requesting something to help the sales force--but if we can explain the value in terms they understand, we'll get the money.

Herbert W. Lovelace shares his experiences as CIO of a multibillion-dollar international company (changing most names, including his own, to protect the guilty). Send him E-mail at lovelace@comcast.net.


To discuss this column with other readers, please visit Herbert Lovelace's forum on the Listening Post.

To find out more about Herbert Lovelace, please visit his page on the Listening Post.

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