The world's most powerful CIOs—Linda Dillman, Randy Mott, Rob Carter, Robert DeRodes, Gary Reiner, Carl Wilson—talk about power and influence in the industry.
Recently, we caught up with Wal-Mart's CIO to discuss her views about power and influence in the industry.
Q: How would you define influence in the role of the CIO?
A: CIOs are becoming more influential and stepping up to take on bigger roles in business. The expectation today is that the CIO is involved in business more than ever before. Some companies grow CIOs into that role and some take people from the business and make them CIOs because technology is intertwined with every single business process. [IT] supports every business unit Wal-mart has around the world. It's the only place that has a view of all of it, except [president and CEO] Lee Scott. I have a lot of dealings with my peers and with major technology companies. A lot of the exposure I get helps me bring a different view to the business in terms of new ideas, challenges, and collaboration. I view that as a responsibility as much as an influence.
Linda Dillman says that exposure to all aspects of the business, as well as other technology companies, helped her move ahead at Wal-Mart.
Photo by Bob Stefko
Q: What key skills do you think CIOs need to develop better to maintain their roles as drivers of business growth?
A: There's a skilla marketing component, if you willthat most other pieces of the business are taught. IT has always been important because it is a necessary evil. To take the next step, you have to learn how to influence and understand what marketers do. You have to deliver a message that will connect with those people. This is important for internal and external customers and it isn't something that comes naturally. The things that make you successful [in technology] are not necessarily the same traits [that make you a successful marketer].
Q: What advice do you have for CIOs of smaller companies who don't wield the kind of power that you do at a large company?
A: They can be as influential as they want. In a lot of the deals we do, we aren't that company's largest account, but one of the things we say is that we want to innovate with them. We want to help create a product that's better for both of us. Hopefully, we all gain from the experience. [CIOs of smaller companies] shouldn't assume they're not an important customer or expect that they should be treated differently.
Q: What outside influences have had the most impact on your ability to do your best job as a CIO?
A: I have a group of people that I depend on to give me honest feedback. That becomes increasingly more difficult the more successful you get. Lee Scott is one of those people and he tells me what I need to do, but it's important to have peers and direct reports do the same thing. You can't just rely on feedback from one direction.
Robert Carter is piloting IT transformation at FedEx, and help-ing his firm excel in the highly competitive logistics industry.
Logistics has become a highly diverse, competitive, and technology-driven industryall of which suit FedEx Corp. CIO Robert Carter very well. As he has been explaining in his monthly column for Optimize magazine, FedEx has undergone a major IT transformation in the past few years and is now reaping the rewards of that strategy (see Every Framework Has Its Place).
Carter's tactics are closely tracked and followed by peers.
Some might be tempted to say that Randy Mott is on the dream track for a CIO: He spent six years as Wal-Mart's CIO, then moved on to industry-leader Dell, and most recently became CIO of Hewlett-Packard. How could he not be considered one of the most influential CIOs in business, right? Well, consider this: When Mott became the CIO of Wal-Mart in 1994, the company's revenue was about $3 billion a year. But today, in part because of Mott's tenure, the retailer is making nearly $3 billion every four days. So the retailer clearly wasn't always a high flier. Similarly, when Mott arrived in 2000, Dell's revenue was $25.2 billion. Now it's on a run rate of more than $53 billion. Mott will tell you that company size or reputation has little to do with potential success as a CIO.
Randy Mott's formula for success should work--regardless of your company's size or industry.
His recipe is very basic. "There are three things that make up a successful CIO," regardless of the company or industry, says Mott. They include leadership, business acumen, and technology skills. Mott has perfected this deceptively simple formula. "I'm always learning," he says. "I make a lot of phone calls [to peers]. I'm very much in a learning mode at all times, and I guess my peers appreciate that. I try to focus and learn about the businessnot just mine, but their business models and their lessons learned, too. I'm very open."
Learning the business side is the most important thing a CIO can do to achieve influence and power in an organization, says Mott. He recalls the early days at Wal-Mart, when "the concept of being an influencer meant having the conversations about the business with the business leaders." In the retail sector, it meant having discussions about inventory management and store operations, rather than about Oracle or Computer Associates.
So while it might be tempting to look at the progressionfrom Wal-Mart to Dell to HPand think that anyone could be successful in those companies, consider this: Not only did the first two companies grow exponentially under Mott's leadership, they're not jobs handed to just anyone. You have to earn them. And Mott's peers recognize that he's the kind of IT leader who has the power and influence to make things happen, no matter which company he represents.
Much is said about aligning enterprise technologies to reflect all of the mission-critical activities contributing to an organization's strategic objectives. Unfortunately, these statements are often abstractions that are difficult to understand and appreciate from an operational perspective. That's why the recent experience Home Depot offers is such a useful and illustrative case in point to underscore the real-world value of effective IT in action.
Robert DeRodes once joked that when he joined Home Depot, the most advanced technology in some stores was a No. 2 pencil. Not anymore.
In the last three years the company has spent $1 billion to overhaul both its front- and back-end IT infrastructure. Driving this transformation is executive VP and CIO Robert DeRodes, who joined the company four years ago when CEO Bob Nardelli hired him away from Delta Air Lines to spearhead the huge undertaking.
Speaking at SAP's Sapphire conference in Boston earlier this year, DeRodes joked that when he was hired, the most advanced technology in some Home Depot stores was the No. 2 pencil. Today it's a very different story.
The company's sales have increased from $45.7 billion in 2000 to $73.1 billion in 2004. In the second quarter of 2005, the company added 44 new stores, bringing its store count up to 1,940, with 1,711 in the United States, 123 in Canada, and 47 stores in Mexico. The company is expanding to China.
Strategic IT deployments are credited with enabling much of this growth. Inside the stores, DeRodes brought in new point-of-sales systems, cordless scan guns, and self-checkout technology. He rewired both power and network systems. In all, he installed 90,000 devices and put 5,000 miles of cables in stores at a cost of a quarter-billion dollars (see Q&A, www.optimizemag.com/issue/033/leadership.htm).
He's now focusing his attention on the back office.
DeRodes is implementing new retail-merchandising and supply-chain management applications from SAP to take the next step in Home Depot's transformation.
General Electric's senior VP and CIO, Gary Reiner, continues to be ranked as an influential leader by his peers.
Gary Reiner, a 15-year General Electric veteran, now is focusing his attention on global sourcing, primarily in China and India.
That may not be a surprise, given GE's reputation for developing strong managers and results-driven leaders, and the company's strong financial position in most of its far-reaching business units. GE expects to achieve double-digit earnings growth this year despite the impact of Hurricane Katrina on its insurance business. For 2004, sales were $151 billion, a 13.9% increase from the previous year.
Reiner, a 15-year GE veteran, is probably best known for his effortsalong with most of GE's executive management teamto imbue the GE culture with Six Sigma quality initiatives. He's also been an advocate for GE's electronic-commerce efforts and real-time data reporting at the multi-industry corporation.
This year, Reiner is firmly establishing himself as a global sourcing expert. As part of the corporate effort to source, staff, and manufacture overseas, Reiner has been out front on initiatives in India and China.
In a presentation last fall, Reiner described GE's IT operations in India as a $600 million business with GE managers and local application development. He also described a more risky, but aggressive, push into the Chinese market with 11,000 employees selling, manufacturing, and sourcing its products, as well as a service emphasis. China represents fertile ground for GE's diverse businesses, including consumer markets, health care, aircraft, and financial services. The company has already built a technology sourcing and learning center in China, with more efforts under way.
Reiner is clearly fulfilling the mission he began in 1991 as VP of corporate business development: evaluate new business ideas and acquisitions; foster strategic planning; advance companywide sourcing; and drive best practices throughout the business.
Carl Wilson says that an ideal customer experience is one critical factor
in the way that technology can support Marriotts business initiatives.
Convergence is more than just a technology buzzword for Carl Wilson and Marriott International Inc. Since becoming CIO in 1997, Wilson has shared a corporate vision to align IT and business strategy. "Convergence is how we operate, invest[ing] in tools and technologies that provide long-term value," says Wilson.
With 1,350 IT employees, Wilson and his team provide support and services to 2,600 properties spread across 66 countries. And in a highly competitive industry where brand loyalty and customer experience are key business differentiators, Wilson must provide seamless service while keeping an eye on what's next.
To that end, this summer Marriott began rolling out networked TVs to 50,000 rooms, an effort expected to take four years to complete. By providing an attached panel, guests will be able to connect any personal device into the hotel's networkjust another example of what convergence means to Marriott and Wilson.
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.