Confessions of a Successful CIO

How the Best CIOs Tackle Their Toughest Business Challenges

Dan Roberts, Brian Watson

• Editorial: Wiley
• Año: 2014
• ISBN:
  9781118849286
• Edición: 1
• Categoría: Business
• Categoría: Information Management

Be the most effective CIO you can be—by learning from the best in the business

Today's Chief Information Officers must be an entirely new breed of technology leader. With ever-changing demands from the business, and in an increasingly technology-centric business environment, CIOs must find game-changing innovations and process improvements that make a real impact on the bottom line. Business executives need their CIOs to be real partners—speaking the language of the business and donning their strategist caps—not just commodity managers. Those IT leaders who fail to break out of the order-taker, utility manager mold will, simply put, be looking for a new job.

In Confessions of a Successful CIO: How the Best CIOs Tackle Their Toughest Business Challenges, current and future CIOs will gain invaluable perspectives from the stories of today's best IT leaders. These acclaimed leaders—each profiled in their own chapter—explain the toughest business decision they had to make, and how the outcome influenced and impacted their leadership style. These in-depth anecdotes take the reader inside some of the most challenging business climates imaginable and chronicle how these elite CIOs made the decisions that mattered.

• Read detailed case studies of how some of the best CIOs have handled their most challenging business problems
• Learn how the best CIOs anticipate changes to their business and respond—before the business comes knocking
• Explore how these top-flight CIOs make critical decisions around strategy and IT to not only benefit their companies, but in some cases, to save them from becoming obsolete.
• Analyze their perspectives on managing people, crises and balancing the risks and rewards of their "bet the farm" strategies

Confessions of a Successful CIO is the new playbook for learning how to take risks, respond to crises, and create more value from IT. Each chapter presents a different challenge, giving present-day and future IT leaders the chance to examine, analyze and learn so that they can be just as successful as the CIOs they're reading about.

Chapter 1
The Anticipator: Filippo Passerini

The weather in Athens, Greece, is pretty nice late in the year. At the very least, it’s a whole lot nicer there than in Cincinnati, Ohio.

It was a Friday evening in September 2002. Filippo Passerini—then serving as the Athens-based vice president of marketing operations and corporate marketing team leader for Western Europe for Procter & Gamble (P&G)—got a call from corporate headquarters in Cincinnati. It was the morning, Eastern Standard Time.

P&G’s second in command asked him about his wife and family, and how he was enjoying his assignment in Greece. Passerini thanked him and exchanged pleasantries, but after 20 minutes of idle chitchat, he knew something was up.

“What do you really want?” Passerini asked the executive.

The answer to this question was more complex. At the time, P&G was in the midst of an extremely complicated situation regarding their shared services organization. The company had decided to investigate opportunities to monetize the unit. But the deal was becoming too complex, and employees were frightened about their futures.

Would Passerini have any problem curtailing his assignment in Greece sooner than expected to help fix the problem? How soon? “Monday.”

Passerini was in a line-management role, another step in a deep rotation through P&G’s business—the kind of opportunity that, given two seconds to think about it, any aspiring C-level executive would drool over. He had a made a clear decision to see his assignment through—and to stay away from his background in IT for a few years to get a broader view of business leadership.

The shared services project needed leadership, and Passerini knew it. He was far across the Atlantic, but word spread. Many of the 7,500 people in the organization were voicing heavyhearted concerns about their future.

And Passerini and his family were reveling in their life in Athens. Yet there he was, on a plane back to Cincinnati that weekend, about to embark on a journey that would lead him to perhaps the most prestigious role of any information technology leader in the world.

• • •

Passerini, a native of Rome, Italy, began his corporate career with Procter & Gamble in November 1981. The 24-year-old systems analyst climbed the corporate ladder quickly, rising through the IT organization until being named vice president in 1997.

He served in leadership capacities—in IT and various line-management functions—on four continents before taking the helm of P&G’s Global Business Services (GBS) division in 2003 and being appointed chief information officer the following year. Today he sits as group president, Global Business Services, and CIO of the $83 billion maker of some of the world’s most recognizable consumer brands.

His long-term performance—particularly, his prowess for innovating and creating real business value—have garnered him more awards than he can probably count, including InformationWeek’s 2010 “Chief of the Year” and the inaugural Fisher-Hopper Prize for Lifetime Achievement in CIO Leadership from the University of California–Berkeley’s Haas School of Business.

But his ascendancy to that role began with that fateful phone call from Cincinnati in 2002.

A few years earlier, Passerini was watching the IT industry turn on its head. The dot-com boom suddenly went bust. Start-ups, promising new technologies and capabilities to power the era of e-commerce, gobbled up millions upon millions in venture capital money, only to disappear seemingly a month later. Jobs disappeared just as quickly, setting the United States off toward its most turbulent economic decade in more than 50 years.

But there was a silver lining for some: Spending on IT infrastructure and services was projected to rise at a steady clip.

A. G. Lafley, P&G’s acclaimed two-time chairman and CEO, and Roger Martin, Dean of the Rotman School of Management at the University of Toronto (and longtime adviser to Lafley), document this period succinctly in their recent book, Playing to Win: How Strategy Really Works (Harvard Business Press, 2013). As those demands grew, in came a new crop of providers—both domestic and foreign—called business process outsourcers (BPOs). “As the post-crash dust cleared, rapidly digitizing companies were faced with decisions on how much to use BPOs, which BPO partner to select, and how best to do so,” Lafley and Martin explained. “It wasn’t easy; the implications of a poor choice could be millions of dollars in extra costs and untold headaches down the line.”

In 1999, P&G created its GBS organization, essentially pulling together under one umbrella the units it thought could be outsourced. These included IT, facilities management, and employee services. Three years later, the company evaluated three options for the department’s future: keep it in-house, spin it off into a separate BPO, or outsource most of it to one of the active players in the BPO arena.

There was no clear or easy decision. Many at P&G saw an arduous path ahead. Passerini saw an opportunity.

• • •

One of the most important motivators for Passerini in this project was the notion of turning a problem into an opportunity. It was something he experienced—the hard way—10 years into what is now his 31-year tenure at P&G.

From his start in Italy, Passerini went to Turkey as a manager of management systems. He moved from there, in 1991, to the United Kingdom, where P&G had its second-largest IT operation, as well as its second-largest profit center. In the United Kingdom, Passerini had to step up what he called his broken English to the Queen’s English. At the same time, most of the team members he was overseeing there were older than he was.

Then P&G decided it would roll out a new order-to-cash system across Europe. The system was the backbone—the veritable nerve center—of everything P&G does, from orders to pricing to payment to the biggest of all: shipping. If P&G can’t ship its products, P&G products don’t land on store shelves. If P&G products aren’t on the store shelves, P&G isn’t selling.

Passerini volunteered to handle the first rollout. “I thought I could easily conquer the world,” he said. But this was no conquest. The rollout went very badly, Passerini said, mainly due to his inability to adequately manage both the change and the expectations. He thought he was finished at P&G. He even went home and told his wife they’d probably need to head back to Italy to find another job.

Clearly, it wasn’t so. Passerini turned it around, and two years later, he was promoted to director and sent to Latin America. He turned a bad situation into a positive one, and now he drills that ethic into the heads of everyone in his GBS organization. “It’s more than fixing the issue. It’s not about playing an even game. If you are 1–0, to use soccer language, it’s not only about how to get to 1–1, but how can you win the game?” Passerini said. “When we have an issue, we always think not just how to fix it, but how to turn a negative perception of a system problem or change management into a success story. This is another element, from a cultural standpoint, that is so critical.”

Fast-forward to Cincinnati, where Passerini was beginning to assess what to do with GBS. The three options were on the table: stay the course, spin it out, or outsource it. According to Lafley and Martin, “Any of these choices might have seemed sensible given the circumstances. But none effectively answered the question of how P&G could win with its global services.”

The leadership team overseeing the outsourcing idea decided, after a long selection process and negotiations, to sell the unit to Electronic Data Systems, then a leader in the BPO space. But that created negative reactions among GBS employees, whose futures became uncertain and confused. In turn, that started a lot of internal swirl.

GBS employees were in disarray. Would they have jobs? If they stayed with P&G, what roles would they be given? Company leaders were getting hundreds of messages a day from these frightened employees.

Things were spinning out of control. Passerini knew he needed to find a different solution, an alternative to the three options put on the table. And the GBS employees would need a little tough love.

• • •

Ask anyone who knows Filippo Passerini, and they’ll tell you he’s one of the nicest guys you’ll meet in the business. But he’s also a firm believer in tough love.

That term means a lot of things to a lot of people, and most of the time it’s just some jargon from business school that seems to fit the occasion. But for Passerini, it’s a mind-set, a modus operandi for dealing with 6,000-odd people he oversees globally today at P&G.

As he continued to review the options, he saw pluses and minuses, as Lafley and Martin described.

Since the entire issue created so much dissension, they could always keep GBS internally. This was the “if it ain’t broke, don’t fix it” option. Selling the unit to a BPO would make a big splash, but it could have the negative effect on morale that Passerini was hearing. Outsourcing to EDS or another major BPO offered economies of scale, but would P&G see the cost-effectiveness and service levels it required? Would outsourcing really create an environment that fostered innovation and value creation?

When there’s no easy answer, leaders have to get creative. Passerini came up with a better option: “selective” outsourcing. Instead of going with one BPO, he decided to selectively partner each area with best-in-class providers.

“The logic of this best-of-breed option was that P&G’s needs are highly varied and that a variety of more specialized partners would be most capable of meeting the needs,” Lafley and Martin wrote. “Passerini saw that specialization could increase the quality and lower the cost of BPO solutions, and believed that P&G could manage the complexity of multiple relationships to create more value than it could through one relationship.” The selective option also limited risk across partners and gave P&G a clearer baseline for their performance.

GBS outsourced IT support and applications to Hewlett-Packard (HP), then only fourth in the market. Employee services went to IBM Global Services, and facilities management to Jones Lang LaSalle. The benefits to the company were beyond considerable: To date, P&G claims Passerini’s GBS organization has saved the company more than $1 billion since this critical decision.

But as he knew, any decision at that point would yield some emotional responses from employees, given the deep concerns that many people had developed. When some asked why—after so many years of success—was P&G outsourcing at all, Passerini stood firm. He’s not in the outsourcing-just-to-outsource camp; cost savings are important, but there were added benefits—benefits that would drive even more value for the company.

“It allowed us to completely reframe the way we think about our role within the business,” Passerini said, 10 years after executing the selective outsourcing deal. “We have farmed out what we consider more of the mundane, commodity cost, and kept in-house the more upstream, strategic value-creation part of technology. And we did it because it would give us more flexibility, it is more strategic for P&G, and it allows us to focus on bigger ideas.”

But the people issues remained. Passerini again stood firm.

Early into the process, he committed to working as quickly as possible to find the right solution and model to solve the GBS crisis. In the meantime, he knew that many P&G employees would be forced to move to other companies, so he worked to negotiate the best terms with the new service provider.

When HP won the IT business, 2,000 P&G employees made the transition—but with equal salary and benefits to those they had at P&G. So despite the turmoil and uncertainty, Passerini said, those employees landed parallel jobs at a top technology provider, and one that could probably offer very strong career opportunities.

“Tough love is important. I learned it’...