CW & FT video debates – IT leadership and the CEODate: Nov 15, 2011
In a series of monthly video debates, Computer Weekly and the Financial Times invite a panel of experts to discuss business and IT issues.
In this video, Tesco CIO Mike McNamara and Robin Young, commercial director of pub and restaurant group Mitchells & Butlers, join Computer Weekly editor in chief Bryan Glick and FT technology correspondent Maija Palmer to discuss the relationship between IT and its business counterparts, and in particular the CIO/CEO relationship.
The debate covers the changing attitudes towards IT, the reputation of the IT department, and how IT leaders can educate the CEO about the benefits of technology.
Read the full transcript from this video below:
CW & FT video debates IT leadership and the CEO
Maija Palmer: Welcome to the Business and Technology
where this time we are turning our attention to the question of
IT and leadership. What happens if most senior executives see
technology as a backroom function that takes place out of sight,
carried out by people who speak an alien language, and who is
responsible at board-level for IT strategy? How does this fit in with
business strategy, and who is responsible if it all goes wrong?
With me to discuss these issues are Robin Young,
the Commercial Director of Mitchells and Butlers and
ex- CIO of Banks Egg and Citigroup, Mike McNamara,
Chief Information Officer of Tesco, and Bryan Glick,
editor-in-chief of Computer Weekly. Welcome.
Bryan Glick, to you first. What issues with IT confront
CEOs and CIOs, and is the image of a chief executive
who can barely turn on his PC somewhat outdated now?
Bryan Glick: I think certainly most chief execs are a
lot more tech-savvy now than they were a number of
years ago. Mostly in a good way, but perhaps, I think, that
guy who never used to switch on his PC perhaps now
thinks he knows enough about IT, but probably does not,
which can be just as damaging, in some respects. As long as
there has been an IT industry, there has been a debate about
business and IT alignment, and matching business strategy
to IT strategy. I think there is still a challenge there, I think
that is something that a lot of organizations still struggle to
get right in that conversation between the CEO and the CIO.
I think what a lot of organizations find, especially when you
have got a new CEO coming in who wants to change things
and put his own footprint onto the organization, quite often
they are hampered from doing that just by the complexity
of the IT systems that have built up over many years.
Maija Palmer: Robin, how do you get a CEO who perhaps
does not understand quite as much about all these things
as he would like to think, how do you get a CEO to make
this a core part of the business strategy?
Robin Young: I am quite lucky; my CEO is actually about
five times as bright as me. If we get into the IT world,
he was also honest enough and brave enough to say to me,
quite early on, 'Robin, I get what IT can do, but I do not
get when you start talking IT.' think our biggest community
responsibility there is to go away from what I call 'tech English.'
A good example, the other day I asked one of my top IT
guys to explain to a team, 'Explain how this is going to work,'
and the best we could get to was, plug and play. Again, in the chief exec's
world, and around a table of my peers, that is not good enough.
We have to learn to be able to explain things in probably a more
basic form of English that links into business.
Maija Palmer: Do you think that the role of a CIO is a
little bit of a translator, if you will?
Robin Young: Yes, in a way. I think, as a translator that
some business acumen, as well, that can show a chief
exec that the investments they are making, number one,
are worthwhile, and number two, are actually giving
business results. How is it you describe something deep
and technical? You do it simple terms in a way, perhaps
an analogy that they really understand.
Maija Palmer: What are some of the things, Mike, that
chief executives back when it comes down to really
spending money on technology and implementing a strategy?
Mike McNamara: If I look at my own industry, when I was in
broadly speaking, where we spend our capital is either on shops or on IT,
and that is really it; some money on trucks and things, as well.
That is a choice; it is between floor space and an investment in IT.
We are comfortable about floor space, we have been
doing it for 100 years, it is a fairly low-risk investment to
put capital into opening up new shops. IT is a bit riskier,
and it has proven to be riskier. The returns are generally
higher, but that higher return comes with a higher risk level.
Understanding how you build a shop, where it is going to go,
who the customers are, again, is fairly straightforward for
most people. Understanding how an IT system is strung
together is a little bit more complicated. They have to put,
the chief executive and the rest of the board have to put a
lot more faith in the judgment of their CIO.
Maija Palmer: Tesco has done some quite interesting IT
investments, like you are looking at putting Wi-Fi into stores,
for example, quite a brave move. So when there is a
specific decision like that, is it that you have built up a bit
of a track record, some of the IT proposals you have put
forward have worked, so therefore, you have a little bit
of credit and so people will trust you on it? How do you
make the case for something like that?
Mike McNamara: I think that is exactly right.
I think it is about that, I think you have to have
empathy with everybody else, and the way people
speak about it. Robin talked about not talking in alien
language. I think there has to be empathy with the business,
and the business has to have empathy with IT. I think
it is about trust, and it is about track record. If I say,’
Actually, we need to do this act,' generally my colleagues
will not question it as much. Like everything, it is an
investment; it has got to make a return.
Maija Palmer: Bryan, we mentioned legacy and old IT
systems being in place. How much of a problem is this?
Bryan Glick: The complexity that has built up in
IT systems over long periods of time is one
of the biggest challenges that CIOs face. It is
one of the biggest challenges in many areas that
prevent businesses from really taking advantage
of new technologies. I am sure there are plenty of
CIOs who would love to come in and say 'Yes, rip and replace.
Let us get rid of all that old legacy kit.' The reality is
that most of those legacy systems are running the
business on a day-to- day basis. You have got big
firms in the city, I am sure probably in retail as well,
who are still using software that was written probably
20 or 30 years ago. Mike talked about the balance
between risk and reward on it, and that is really
what is comes down to. What is the risk of redeveloping
them and what is the reward you get from doing it?
Mike McNamara: I would not bemoan legacy, I have a lot of
We do a bit of acquisition, especially in our overseas businesses,
and you just have to get on with it. You cannot wish you
had something different than you have, so you have got to
work with what you got. It is down to; it is straightforward
investment decisions as to whether it is worthwhile ripping
something out and putting something different in.
Maija Palmer: How easy is to knit things together if you
acquire a business and it works on a completely different system,
and perhaps you do not want to just rip and replace?
Robin Young: I think if you look some of the historical
I have done in integration, some of the banking technology
between Egg and Citigroup. Citi acquired Egg to become
innovative and quicker, and then found very quickly that
they had some very big, worldwide, global systems that
actually were not that quick. Trying to knit the systems
together was not the problem, it was actually trying to
knit the people and the culture together in the
background. It is actually getting the humans to
interact in a different way.
Maija Palmer: What about when it all goes wrong?
Whose fault is it? As CIO, do you carry the can?
Mike McNamara: Yes, you do, and you ought to.
Again, I think my colleagues around the board,
in Tesco, rely on me to make judgments about
IT and about IT risk. If it goes wrong, it is my fault.
Robin: I would agree, totally. I think one of my favorite
I will not mention the company, sat around the table,
and whose fault is that? Actually it is mine. When
we make those decisions and we decide to go live
with a project, and if it is not working, that was my call.
The CIO's role is not just about the IT space, it is
about the reaching-out into your other peer groups
and making sure that you do not vastly overspend
and you do get projects done on time, because those
things can be achieved. I would argue again, quite
strongly, that is usually nothing to do with the technology
or the software, it is more to do with the human elements
within a business, and keeping everybody onside.
Mike McNamara: I think he is right. I think you are right
you say that the buck stops with the top IT guy.
I think the shame is that quite often IT gets the blame
for things that are not his fault. I think what you said,
Robin, I think is right, that outreach to people in the
business, is something that in a lot of organizations,
historically, IT has not been very good at. That has
led to a culture where people will blame IT when things
go wrong, whether it is IT's fault, or more likely, their fault.
Robin Young: I think it is that ability, again. CIO's are
just technologists, and that equal seat around a board
or an exec table is because you bring other business
acumen and skills with you.
Maija Palmer: It feels like the IT role is about that
it is about being an ambassador, and all these soft skills.
Actually, someone who is just very good at IT is not going
to make a great CIO, necessarily.
Mike McNamara: Yes, we have to make good judgments.
You have to be able to ingest as much data as you can
from hither and thither, but you really got to make a
gut decision on most of these things at the
end of the day. That is an important skill for any CIO,
Maija Palmer: Thank you very much, gentlemen.
If you want to read more on this subject,
simply go to FD.com/ConnectedBusiness.